New Zealand's Cadbury plant set to close

CADBURY is set to draw to a close more than 80 years of chocolate production in New Zealand after owner Mondel?z announced plans to close its plant in Dunedin.

The proposal to close the factory, which will affect 350 workers, comes as Mondel?z continues its global cost-cutting programme. The plan is to shift production to its operations in Australia, where the majority of Dunedin’s output is currently shipped. More than 70% of the products manufactured at Dunedin are exported abroad.

“We operate in an increasingly competitive industry and the factory’s distance from its main market, low volume, and complex product portfolio make it an expensive place to manufacture our products,” said Amanda Banfield, Mondel?z area vice president for Australia, New Zealand and Japan.

“We’re focused on becoming globally cost-competitive through increased production and investment in larger sites, while reducing costs, which allows us to fuel the growth in our brands.”

The company is holding consultation talks with local officials and politicians on the plans for the closure. If it goes ahead, 250 would lose their jobs this year, with around 100 kept on into 2018 as production winds down. The affected employees will be offered the opportunity to apply for vacancies at Mondel?z’ Australian sites, and support for relocation.

Speaking to the New Zealand Herald, Catherine Beard, executive director at trade group BusinessNZ, said she does not think the closure would be a reflection of manufacturing in the country.

'We produce the performance and manufacturing index (PMI) every month which tells [people] how business is going, and it has been in expansion for a record amount of time,” she said.

'Food and beverage manufacturing is generally one of our strongest categories, so when you look at the stats, it is more often than not going well and expanding.'

In 2015, Mondel?z announced plans to cut US$3bn in costs, leading to plant closures and production transferred to sites in countries with cheaper productions costs.

“Mondel?z appears to have a global strategy of slashing costs and jobs to bolster shareholder returns regardless of the consequences to communities, and this strategy needs to be challenged,” said the E t? union’s representative Chas Muir.

The news has led to calls form a number of local businesses and individuals for customers to boycott Cadbury products. Actor Sam Neill took to Twitter saying the closure would lead him to ask everyone in New Zealand and Australia to never sell or buy anything from Cadbury ever again.

“#Dunedin my #Hometown. When #Kraft etc close factories like @Cadbury_NZ, they save, while ripping the guts out of a community & its history” the Jurassic Park star tweeted.

The sensitivity around the closure is heightened by the fact that the Cadbury World tourist attraction in Dunedin is not part of the shutdown plans.

“We are conscious of potential community sensitivities around the continued operation of Cadbury World in the absence of the factory,” said Mondel?z.

“While the company is ready to invest in redevelopment work to make Cadbury World an even better visitor experience, we won’t impose it on the community.”