2 Kraft representation before the
Committee
7. When our predecessor Committee held its inquiry
into the Cadbury takeover, it wanted to hear evidence from Irene
Rosenfeld, the Chairman and CEO of Kraft. However, Ms Rosenfeld
declined to appear before that Committee. In its Report the Committee
regretted that decision,
"not least because the statements regarding
Somerdale's future […] were made and announced by her. Irene
Rosenfeld's attendance would have given an appropriate signal
of Kraft's commitment to Cadbury in the United Kingdom and provided
the necessary authority in respect of the specific assurances
offered to us during our evidence session."[16]
8. At the start of our inquiry we again invited
Irene Rosenfeld to appear before the Committee.[17]
Our initial invitation made it clear that such an appearance would
be arranged to accommodate her many work commitments. The response,
from Marc Firestone, Executive Vice President, Corporate and Legal
Affairs for Kraft, stated that Kraft would be:
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
and that
Ms Rosenfeld will ensure that the most appropriate
people from Kraft Foods are available to supply the information
you have requested.[18]
9. He further said that he would again lead the
team appearing before the Committee, arguing that such a team
would combine "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." The response
did not, however, address the fact that the invitation had been
extended to Ms Rosenfeld. Mr Firestone would have been welcome
to give evidence alongside Ms Rosenfeld, as together they would
have been in a position to provide the maximum level of authority
without compromising on the depth of available information.
10. In the Committee's response, we expressed
our disappointment at the continued refusal of Kraft's CEO to
appear. The reply, this time from Ms Rosenfeld herself, said that
she shared a "desire to reinforce Kraft's commitment to Cadbury
and its heritage with the Committee." However, she again
declined to appear, saying that the appropriate representatives
were those "closest to the market and to [Kraft's] business
plans" and that Mr Firestone and Mr Bond would provide continuity
from the previous session.[19]
11. Our final invitation offered Ms Rosenfeld
the option of an evidence session by video-link. The reply from
Kraft failed to address the offer of a video-link appearance,
and expressed disappointment at the further request, stating that
"the repeated demands for Ms Rosenfeld to appear in person
are regrettable." It continued:
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.)[20]
12. This was a total misrepresentation of the
Committee's reasons for inviting Ms Rosenfeld, which were based
on her capacity as Chairman and Chief Executive Officer to speak
with maximum authority for the company. It also omitted to address
our offer of evidence by video link. The description of the Committee's
"motive" for inviting Ms Rosenfeld in our view fell
short of an explicit contempt of the House, but not by much. The
manner and tone of the letter was unacceptable and showed a distinct
lack of judgement by Mr Firestone. Considering the poor handling
of the takeover of Cadbury by Kraft, we believe that our predecessor
Committee, far from descending into rancour, showed great restraint
in its examination of Kraft executives.
13. When Kraft's witnesses came before the Committee,
they again suggested that our invitation to Ms Rosenfeld was based
on a desire to personalise the issues.[21]
This simply was not the case. Our reason for wanting her to appear
before us was based entirely on the authority which comes with
her position as Chairman and CEO of the company. As Mr Firestone
conceded, the authority to close factories—including those
in the UK—rested not with him but primarily with Ms Rosenfeld.[22]
14. In a BBC news interview after her visit to
Bournville in October 2010, reported in the Daily Telegraph,
Ms Rosenfeld was asked whether she was unable to make more of
a commitment on manufacturing beyond the two-year commitment offered
in March 2010, to which she reportedly said, "That's correct."[23]
According to the Daily Telegraph report, "she added
that it was hard to say whether, overall, the merger of the two
companies would result in a net loss or a net gain in jobs. 'It
will vary from area to area. I think most importantly though,
we do expect that the combination will enable the combined company
to deliver growth on both the top line and the bottom line that
is well in excess of the growth of any of our peers.'"
15. This is precisely the type of comment on
which we would have wanted to give Ms Rosenfeld the opportunity
to comment directly to us.
16. The areas that principally
concern this Committee in relation to Cadbury are Kraft's company
strategy and its intentions with regard to UK jobs, and it is
Irene Rosenfeld, as its Chief Executive Officer and Chairman,
in whom Kraft has invested the principal authority to make announcements
on such matters. For that reason, we believe that she should have
made herself available as her company's principal witness. The
manner of her repeated refusal to appear before a committee of
Parliament demonstrates a regrettably dismissive attitude to a
National Parliament—an attitude which we trust Kraft will
rapidly take action to shed.
17. It was deeply frustrating
that so much time was spent on the issue of Ms Rosenfeld's non-attendance
which ultimately overshadowed some of the positive developments
in Cadbury. That situation could have been avoided had Kraft taken
a more positive role in its engagement with the Committee. If
Kraft's decision was driven by advice on public relations, that
decision backfired.
16 Conclusion 1 Back
17
The full correspondence has been published on the Committee website
at: www.publications.parliament.uk/pa/cm201011/cmselect/cmbis/writev/871/contents.htm Back
18
Ev 25 Back
19
Ev 26 Back
20
Ev 26 Back
21
See in particular Qq 39-40 Back
22
Q 14 Back
23
Daily Telegraph, 9 October 2010, 'Kraft chief refuses to
rule out further cuts' Back
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