HC 871 Kraft

Letter to Irene Rosenfeld, Chief Operating Officer and Chairman, Kraft Foods Inc., from the Chair of the Committee

I am writing to you in my capacity as the Chairman of the House of Commons Business, Innovation and Skills Committee.

In the previous parliament, the Business, Innovation and Skills Committee conducted an inquiry into Kraft’s takeover of Cadbury. During that inquiry, your staff gave that Committee a series of undertakings regarding the future of Cadbury. My Committee intends to revisit those undertakings and to get a clear understanding of the implications-for both the company and the UK economy-of your recent announcement to move Cadbury’s headquarters functions out of the country.

I understand that you were invited to represent Kraft at the last inquiry, but declined to do so. I would like to avoid such an outcome for this inquiry. I am therefore writing now to invite you to give evidence. The time and date of the meeting has yet to be decided. I would prefer it to take place in the early part of next year but we will be flexible in order to accommodate you.

It would be helpful if you could inform me of any dates which you would be able to attend or any dates which would coincide with you visiting the United Kingdom in the course of your work.

I look forward to hearing from you in the near future.

16 December 2010

Letter to the Chair of the Committee from Marc S Firestone, Executive Vice President, Corporate & Legal Affairs and General Counsel

At Irene Rosenfeld’s request, I am responding to your letter of 16 December 2010.

Kraft Foods is of course pleased to provide an update to the Business, Innovation and Skills Committee on progress since my colleagues and I first appeared before the Committee in March 2010.

Ms Rosenfeld will ensure that the most appropriate people from Kraft Foods are available to supply the information you have requested. In that regard, because I gave the undertakings in March and report directly to Ms Rosenfeld as a member of Kraft Foods’ executive team, she has asked that I lead the team that will be available to appear before the Committee. The team will include senior executives from Kraft Foods Europe and from Kraft Foods UK and Ireland. Ms Rosenfeld believes that this team combines the seniority and knowledge needed to answer questions authoritatively and to the level of detail that will be most helpful to the Committee’s deliberations.

To make the necessary arrangements to appear before the Committee, I will be in touch with the Committee Clerk in the next few days.

10 January 2011

Letter to Irene Rosenfeld, Chief Operating Officer and Chairman, Kraft Foods Inc., from the Chair of the Committee

I am writing in response to Marc Firestone’s letter of 10 January regarding my invitation to you to appear before my Committee.

I had hoped that you would have seen this as an opportunity to demonstrate, in person, your company’s commitment to Cadbury and to its heritage. Therefore, you will not be surprised to read that I am extremely disappointed that you felt unable to accept my invitation.

As you know, the takeover of Cadbury by Kraft was badly received in the United Kingdom and there was a high degree of scepticism over the motive for the takeover, the way in which it was conducted and Kraft’s future strategy of the company. That scepticism remains and your refusal to attend a Committee of the House of Commons will do nothing to change that position.

Your letter set out the executive functions of Mr Firestone and the fact that he is authorised to speak on behalf of your company. Indeed, he did so when he gave a series of undertakings to my predecessor Committee. However, he cannot offer the level of authority that your appearance would provide.

Your appearance would send the strongest possible signal of Kraft’s commitment to Cadbury, and would go some way to repairing the damage caused by the manner of the takeover.

I therefore ask you to reconsider your refusal to attend.

24 January 2011

Letter to the Chair of the Committee from Irene Rosenfeld, Chief Operating Officer and Chairman, Kraft Foods Inc.

Thank you for your letter of 24 January. I certainly share your desire to reinforce Kraft’s commitment to Cadbury and its heritage with the Committee. And, as Marc Firestone said in his response on my behalf, Kraft Foods would be pleased to provide an update to the Committee on the progress we have made over the past 12 months and our plans for the future.

As you know, we have proposed a team of key senior executives from across Kraft Foods, led by Marc, who is our EVP, Corporate & Legal Affairs and General Counsel. I believe it is essential that the individuals closest to the market and to our business plans be the appropriate representatives before the Committee. This team brings together the seniority and knowledge that we believe will be most helpful to the Committee in looking into the matters under consideration. By including Marc and Trevor Bond, as well as Nick Bunker, we are providing continuity from the previous session with the Committee and proposing a group that is able to speak knowledgably about our current and future plans from both a Kraft Foods and a Cadbury perspective.

I know that Marc and his team are in close contact with the Committee to make the necessary arrangements for the meeting.

28 January 2010

Letter to Irene Rosenfeld, Chief Operating Officer and Chairman, Kraft Foods Inc., from the Chair of the Committee

My Committee considered your letter dated 28 January at its meeting on Tuesday. It was profoundly disappointed with your response and your lack of willingness to accept our invitation for you to give evidence in person.

As the head of a major international company with significant interests in this country we expected a more accommodating response. It was not lost on us that foreign Chief Executives of multinational companies have appeared before your congressional committees; we had hoped that you would have taken a similar approach to our invitation. I have to say that your absence will not be interpreted in a positive light in this country.

I appreciate that busy schedules can often be barriers to holding such meetings and this may be why you do not feel able to appear. Committees of the House of Commons have the facility to hold hearings via video link. Although this is not ideal, it does offer a solution to problems over availability for witnesses from overseas. I would be happy to offer this as a compromise should your diary commitments not allow you to come to Parliament in person.

I look forward to your response.

3 February 2011

Letter to the Chair of the Committee from Marc S Firestone, Executive Vice President, Corporate & Legal Affairs and General Counsel

As you know, Kraft Foods recently published a progress report on our activities in the UK over the last year, and we have sent copies to the Select Committee. Amongst other things, this report shows that we have met or exceeded the commitments we made to the Committee last year. Indeed, any objective assessment reveals that our acquisition of Cadbury is a success story.

Nevertheless, we respect the fact that the Committee would like to hear directly from Kraft about our

activities in the UK. Accordingly, and further to correspondence and discussions with the Committee, my colleagues and I are scheduled to appear before the Committee on 15 March.

We were therefore disappointed to receive a third request that Irene Rosenfeld appear in person in place of the company representatives who testified last year and who are best placed to assist the Committee in its inquiry. As Ms Rosenfeld has confirmed to you in writing, Mr Bond, Mr Bunker and I have the seniority and knowledge to answer any questions the Committee might wish to pose about Kraft’s business in the UK.

Given our understanding that the Committee’s purpose is to enquire into relevant facts, the repeated demands for Ms Rosenfeld to appear in person are regrettable. Based on the experience of last year’s hearing and recent comments by some Committee members, there seems to be a desire to have a "star witness" towards whom ill-founded allegations and insults can be made, with little or no attempt to discuss the facts and look rationally into the evidence. Indeed, a review of the transcript from last year’s hearing shows that it went far beyond spirited debate to a remarkable level of rancor. (For example, please see Questions 189 and 199.)

Your letter refers to instances in which corporate leaders have testified before the US Congress. As you will know, however, these hearings have typically involved environmental disasters, massive accounting frauds, and deadly product liability scandals, rather than, as in this case, an acquisition that ultimately received the Cadbury Board’s unanimous recommendation and that, as our report shows, has already delivered many positive outcomes.

Kraft Foods has the greatest respect for the House of Commons and will continue to cooperate fully in providing relevant information to the Committee. Far from "snubbing" the Committee, Ms Rosenfeld has carefully chosen the senior executives she knows to be best qualified to testify about Kraft Foods. To that end, as discussed with the Committee Clerk, my colleagues and I will be present on 15 March to answer the Committee’s questions on everything from our R&D facilities to our management structure. We will be able to show you that Kraft Foods is honoring its commitments and playing an important role in the British economy.

9 February 2011