Schumpeter: Food fight
Kraft and Cadbury need to think about the loyalty of future consumers as well as existing ones
IT SEEMS that food still trumps everything. The past few months have seen a parade of proposed corporate marriages in all sorts of gee-whiz industries, from entertainment (Disney and Marvel) to information technology (Xerox and ACS). But none of these has attracted as much attention as a possible tie-up between America’s biggest food conglomerate, Kraft, and Britain’s best-loved chocolate-maker, Cadbury.
There are lots of reasons for this interest. The mating dance has been unusually long and the deal is unusually large. Kraft first proposed a purchase at a price of GBP10.2 billion ($16.7 billion) in early September and it now has until November 9th to make a formal offer or give up the fight. The courtship has unleashed a barrage of bad puns (“Cadbury gags on Kraft bid”). It has also stirred up atavistic fears across Britain of a faceless American conglomerate wrecking a great British institution and forcing Britons to give up Dairy Milk chocolate and Creme Eggs in favour of Cheez Whiz and Jell-O. ...
