Call for prosecution over Cadbury salmonella scare

Date: Thu 03/08/2006
Published in: Western Mail
Spokesperson: William Grobel
Position: Consultant at Intangible Business

Cadbury Schweppes yesterday looked to draw a line under a salmonella scare which saw it recall more than one million chocolate bars and which will cost the company at least £20m. The firm launched a £5m marketing campaign, including the return of advertising on Coronation Street - which was suspended following the recall in June - as it looked to 'rebuild confidence' in its chocolate bars.

 

The salmonella outbreak was blamed on a leaking pipe at one of its main factories in Marlbrook, Herefordshire, and has been linked with a spate of illnesses in the UK. Cadbury said the outbreak will cost it £20m this year through the cost of recalling Dairy Milk bars as well as the increased spending on marketing and improvements to its manufacturing operation.

 

Chief executive Todd Stitzer apologised for the scare yesterday and insisted the Cadbury brand would recover, although he admitted that the £20m figure did not take into account any loss of sales through damage to the company's reputation.

 

The comments came as Mr Stitzer revealed UK chocolate sales were 14% lower in July than they were in the same month last year. The slump followed the product recall on June 23 although Cadbury said the entire UK chocolate market was down 9% last month because of the heat wave.

 

Mr Stitzer said, 'We think that with the right investment in innovation and consumer marketing, our business will come back from both the heat wave and from this occurrence.'

 

Unveiling a range of new chocolate bars and a 'First Taste First Love' television advertising campaign, he added, 'Without doubt, the last few weeks have tested our relationship with our consumers and our customers.' Some analysts have forecast the total cost of the outbreak will be as much as £40m because of damage to the brand and lower sales.

 

Mr Stitzer dismissed the figure and said, 'Our products continue to have the confidence of a substantial number of our customers.' He said the company had received 700 complaints from customers since the outbreak, including more than 50 from people suffering from illness. Liberal Democrat food spokesman Chris Huhne called for Cadbury to face prosecution under food safety laws. 'Cadbury only suffered this sales slump because it was caught out,' said Mr Huhne.

 

'Having not reported the salmonella after five months, they could have got away scot-free were it not for the safety watchdog and media scrutiny.' The UK Food Standards Agency has launched an investigation into why it took the company six months to report the contamination.

 

And the Health Protection Agency branded Cadbury's chocolate the most likely cause of an outbreak of a rare strain of salmonella poisoning in the UK, known as Montevideo.

 

Catherine Henderson, 62, from Larne, County Antrim, has already threatened to sue Cadbury after going down with the illness, which can cause diarrhoea, vomiting, fever, chills and headaches. Her law firm, Irwin Mitchell, said a number of other apparent victims had come forward seeking legal advice. Cadbury said it was not aware of any legal action against it and apologised for the outbreak.

 

Industry analysts yesterday said the salmonella scare would not hurt Cadbury in the long term because of the strength of its brand.

 

William Grobel, consultant at Intangible Business, the world's largest brand valuation consultancy, said, 'The salmonella incident was an isolated blip in one market that has now been resolved. 'There are unlikely to be any long-term repercussions - investors have responded positively, consumers are still buying products.' Five of the seven products recalled are now back on sale - Dairy Milk Turkish 250g, Dairy Milk Caramel 250g, Dairy Milk Mint 250g, Dairy Milk Eight Chunk and Dairy Milk 1kg. The firm said Cadbury Dairy Milk Buttons Easter Eggs will not reappear until next year, while the Cadbury Freddo 10p will not be restocked.

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