Careless Wispa

Just how dubious are chocolate peddlers Cadbury these days?

Dairy Mik owners Cadbury have been accused of tax dodging
Milk of human kindness Cadbury’s legal tax loophole makes a mockery of their Fairtrade investment. Allegedly. Image Picture Matt Cardy/Getty Images

Following the likes of Amazon, Facebook, Starbucks and Google, the latest megacorps to be accused of tax chicanery is Mondelez. 

They aren’t the most familiar name on the high street, but Mondelez own Kraft Foods, the American food giant who in turn took over our own dear old Cadbury in 2011.

Kraft’s £11billion takeover was controversial enough at the time, as it had to borrow £7billion to swallow up so much chocolate. The tie-up means that Dairy Milk, Crunchie and Wispa rub up alongside Ritz crackers, Dentyne and Philadelphia cheese in Kraft’s portfolio. It’s like a particularly odd case of the munchies.

Now Mondelez has been wiping Cadbury’s bills out with interest payments on an unsecured debt – which is listed as a bond on the Channel Islands stock exchange. Complicated? Yes, a bit, but in essence it meant Mondelez paid no UK Corporation Tax. Even though Cadbury UK made a profit of £83.6m in 2013 and £96.5m in 2014.

It’s enough to make you choke on your Flake. And it’s all depressingly legal.

Mondelez’s fast and loose approach to morals have besmirched the original Cadbury ideals. Quaker founder John Cadbury began the family-run company in Birmingham in 1824 and even built the town of Bourneville for its workers.

So ingrained was Cadbury in the British way of life that Bourneville’s factories were used to create parts for aircraft during the war, and chocolate was deemed an essential food.

This isn’t to say Cadbury weren’t always above some tax avoidance. According to a report in the FT after the merger took place, the Fruit & Nut shiller already had a variety of loans going on, which allowed them to pay just £6.4m a year on a profit of £100m.

Tax iffiness aside, Kraft have already besmirched the Cadbury name, what with replacing raisins with sultanas in Fruit & Nut, Creme Eggs ‘not being what they were’ and a general decrease in the sizes of multipacks.

Creme Egg makers Cadbury have been accused of tax dodging
Creme sinks to the bottom Creme Eggs: the taste has changed and there’s tax whoppery. Whoopee. Image Picture Oli Scarff/Getty Images

Naturally, a Mondelez drone claimed: “In common with all global businesses, we pay corporation tax based on the laws of the countries in which we operate. We comply with all applicable tax legislation in the UK, and on a global basis we pay hundreds of millions of dollars in corporate income tax annually. Since 2010 we are proud to have invested over £200m into both UK-based manufacturing and R&D supporting our 4,500 employees in the UK. Importantly, independent academic research has also shown that as a business we are worth over £1bn to the wider UK economy, illustrating our impact reaches far beyond the factory gates.”

Which is all very plausible, but really doesn’t alter a nastier taste in the mouth than a Whole Nut multipack, especially combined with rumours that Kraft are considering moving their UK tax base to that entirely ethical tax base of Switzerland.

So that’s Cadbury then: ethically on a very slippery slope. You could probably adjust your moral compass to remove Curly Wurly and Fudge from your essential diet, but if you start boycotting them, then you’ll also have to avoid this lot:

Apple

Estimated UK sales – £6.7billion

Disclosed UK sales – £1billion

Profit – £59.5million

Tax- £12.9million

Google

UK sales – £3.3billion

Disclosed UK sales- £642million

Profit – £70million

Tax- £20.4million

Amazon

Estimated UK sales – £4.2billion

Disclosed UK sales – £449million

Profit – £17.1million

Tax – £4.2million

 

So there you have it. All these massive companies have deliberately made sure they’re rinsing as much money as possible. They’re by no means the only culprits. Vodafone shops faced a wave of protests when it was revealed that they’d steered clear of paying what they actually owe. British America Tobacco made £4.9bn on their catalogue of gaspers but pay absolutely nothing. Sugar pushers Tate & Lyle make £379m, but again pay zero.

Hopefully, this is all about to change, following calls for a global crackdown in tax shiftiness. Over 60 countries are now making moves to improve transparency, close loopholes and restrict the use of tax havens, following an announcement in October by Angel Gurría, secretary-general of the Organisation for Economic Co-operation and Development.

However this will take time, and there will be a lot more of your favourite companies and organisations coming under the tax spotlight. If you live by ethics and morals alone, your entire life will become problematic. Pass us a Kit-Kat. Nestle would never do anything dodgy…

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Loaded freelance reporter Ian Wade writes about music and TV for newspapers and websites. He is also a music publicist. Follow him on Twitter at @WadeyWade

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