Will Cadbury and Kraft — which finally have cut an £11.9 billion deal to sell Britain’s best-loved chocolate maker to an American conglomerate whose products range from Toblerone and Oreo cookies to such innovative foodstuffs as Cheez Whiz, a cheese paste that spreads straight from the jar — still be whooping in a year’s time?
The prospects are heartening enough. Kraft already runs the world’s fifthbiggest confectionery business. That will be sweetened by the addition of Dairy Milk and Creme Eggs, enabling the merged business maybe to elbow Mars-Wrigley off its perch as world leader.
But whether or not Kraft’s optimism about the sweetness of the deal proves misplaced, that is a matter for its shareholders, not for governments. It has been lamentable to see Peter Mandelson abandon new Labour’s ideals to prop up a prime minister in whom he does not believe. It is more lamentable that it happened to be in the midst of the Kraft-Cadbury takeover battle that he chose to make a jingoistic stand against hostile foreign bidders for British companies, warning them: “If you think that you can come here and make a fast buck you will find that you face huge opposition . . . from the British Government.”
On what criteria did Lord Mandelson fear the consequences of foreign ownership of Cadbury? How did new Labour give its blessing to the takeover by foreigners of, among many others, Abbey National, ICI, BAA, the glassmaker Pilkington, Corus, British Energy and Jaguar? French and German companies control much of the UK’s energy. Heineken and Carlsberg bought the UK’s largest brewer, Scottish & Newcastle.
So on what grounds does the Government think it acceptable for foreign interests to have a say in how Britain’s airports are run, or our electricity is supplied, and to own our football clubs, but not to get their hands on a Cadbury’s Flake? Especially since, in 2007, an EU trade commissioner rebuked the Japanese Government for spurning a proposal from the activist hedge fund, TCI, to boost its stake in the Japanese electrical wholesaler, J-Power, on the ground that “the single greatest threat to the economic openness that underwrites our prosperity in Europe, the US and Japan is ... the economic nationalism and protectionism that makes us see foreign participation in our economies as a sign of vulnerability.” That commissioner’s name? Peter Mandelson.
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What should more greatly concern Lord Mandelson, as Business Secretary, is whether Britain is a nation still encouraging the growth of new companies that can take their place alongside Cadbury in the pantheon of British entrepreneurial successes. There is good reason to be worried.
Britain’s likely future targets of foreign bidders are already well-established concerns, such as Vodafone, Rolls-Royce, GlaxoSmithKline and Astrazeneca. Yes, Autonomy is a world leader in cyber-security. And investment is dribbling into renewable energy. But where are Britain’s Googles? Its Intels and Wal-Marts? Where are this century’s giants in science and technology, pharmaceuticals, consumer goods, banking and finance? How is Britain going to make its living in the future? The Government should be safeguarding the conditions under which such businesses can flourish. If these concerns are then courted by foreign companies, that should be trumpeted as a triumph, not a spur to protectionism.