Cadbury Keeps Low Ad Profile After Chocolate Bug Scare

11 July 2006

Confectionery giant Cadbury Schweppes is finding the going tougher than expected following its salmonella infection scare and subsequent UK product recall [28-Jun-06].

The company continues to suspend its £10 million ($18.2m; €14.4m) sponsorship of long-running TV soap opera Coronation Street despite initially describing the move as a "short term measure".

Meantime, two weeks after the outbreak was revealed, the UK's biggest chocolate manufacturer is bracing itself for sales repercussions when interim results are published next month. The company says it expects to incur £5m in recall-related costs.

Arnaud Langlois, analyst at JPMorgan, estimates Cadbury could lose as much as £30m in earnings, reducing its 2006 operating profit by three per cent.

The bug was found in some chocolate production lines at the beginning of the year. Cadbury has faced sharp criticism for the five month delay in confirming the problem to the Food Standards Agency.

Data sourced from Financial Times online; additional content by WARC staff