Kraft Gets Slapped by British Lawmakers

British lawmakers are strongly rebuking Kraft for acting irresponsibly in reneging on its promise to leave Cadbury's Somerdale plant running, when it was still working out a deal to acquire the British confectioner.
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NEW YORK (TheStreet) -- British lawmakers are strongly rebuking Kraft (KFT) for acting irresponsibly in reneging on its promise to leave Cadbury's Somerdale plant running, when it was still working out a deal to acquire the British confectioner.

The Business, Innovation and Skills Committee of UK lawmakers on Tuesday issued a strong statement against Kraft, saying that "its handling of the Somerdale factory ... has damaged its UK reputation and soured its relationship with Cadbury employees."

The lawmakers are calling on the government to monitor Kraft's compliance with undertakings, including no further compulsory "redundancies" (what the British like to call layoffs) among manufacturing employees and no additional plant closures in the UK for the next two years; a continuation of managing Cadbury from within the UK; a continuation of Dairy Milk production in the UK; and its obligation to support Cadbury's existing pension arrangements.

"Kraft gave us a number of undertakings on the future of Cadbury, which we have put in the public domain. Kraft will have to deliver, in full, on these undertakings if it is to repair the damage caused to its reputation by the woeful handling of the closure of the Somerdale factory," Peter Luff, the committee's chairman, said.

Kraft says that keeping Cadbury's Somerdale plant in western England open would be very costly, even though

Kraft promised to keep it open last September.

The plant is expected to close in 2011, resulting in the loss of about 400 jobs.

-- Reported by Andrea Tse in New York

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