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Cadbury Schweppes' Chocolate Recall is Not so Sweet

Posted on: Tuesday, 27 June 2006, 06:00 CDT

Cadbury Schweppes has recalled over 1 million chocolate bars in the UK after a food scare. The company has faced criticism after it became apparent that the company waited five months to inform health authorities about traces of salmonella uncovered. Following a mass recall in the UK and Ireland, long term damage to the immensely strong Cadbury brand should however prove minimal.

The world's largest confectionery company has since declared its products safe and defended itself against claims which suggest otherwise. However, UK food watchdog the Food Standards Agency is examining why the company failed to inform authorities about the salmonella contamination when the first hint of a problem was discovered in January 2006 - especially since Easter eggs, primarily targeting children, may have been infected.

Although the product recall has been restricted to the UK and Ireland due to the fact that the salmonella was discovered at a UK manufacturing facility, it has sparked concerns globally. This has led to a product recall in Singapore, precautionary checks in Malaysia and the freezing of stocks at warehouses and stores in the UAE. Furthermore, the news has been widely reported in the global media, and due to its multinational status, Cadbury may struggle to counteract the negative press.

Cadbury is not the first global company to be at the center of controversy regarding a product recall: Coca-Cola had to recall its Dasani bottled water in the UK due to levels of bromate that exceeded legal limits put in place by the government. Such health scares have understandably led to questions over how far some of the biggest food and drink manufacturers are able - or possibly willing - to maintain the highest safety standards.

The Coca-Cola brand did not appear to suffer worldwide following their mishap, however Coke never relaunched Dasani in the UK.

Trust in the Cadbury brand has been questioned and only time will tell whether or not the company will remain unscathed by the bad publicity from the salmonella scare. While in the short term it may affect sales, the long-term outlook may be more positive as people recognize that Cadbury has since acted responsibly through the rapid withdrawal of its products. Yet, this depends on whether chief rivals such as Nestle and Masterfoods can take advantage and gain market share at Cadbury's expense.

If sales continue to suffer, Cadbury could step up its interest in organic products, which it already sells through its organic unit Green & Black's, or it could introduce more fairtrade lines, thus persuading the consumer of its dedication to ethical issues and reaffirming itself as a socially responsible and consumer-focused company.

Source: Datamonitor

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