Cadbury owner Mondelez builds Brexit chocolate stash
* Mondelez stockpiling in UK, Europe exec tells Times
* Inventory build to offset supply disruptions post-Brexit
* Other companies already discussing stockpiling
(Writes through, adds context)
Sept 11 (Reuters) - Cadbury owner Mondelez International
is stockpiling ingredients, chocolates and biscuits in
Britain to avoid interruptions to business in the event of a
The preparations are the latest from a growing list of big
companies unsettled by the lack so far of an exit deal as
Britain's planned March 29 departure from the European Union
looms ever larger.
While many manufacturers in Britain clearly desire a Brexit
deal that would allow the free flow of products, Mondelez is
preparing for the worst, The Times reported https://bit.ly/2MjCYjJ
on Tuesday, citing the president of the company's European
"We are stocking higher levels of ingredients and finished
products," Hubert Weber was quoted as saying, with the paper
adding that the Mondelez contingency plans are in place because
the UK is not self-sufficient in terms of food ingredients.
In an emailed statement, a Mondelez spokeswoman said: "Like
all businesses, we're monitoring the political decision-making
process and preparing for a number of potential outcomes.
"We stand by Hubert Weber's comments and have nothing
further to add at this time."
Many commodities used by British manufacturers, such as
sugar, wheat and cocoa, are either often produced domestically
or imported from outside the European Union.
Cadbury process cocoa in a plant in Chirk in Wales and
mixes it with milk and sugar to create the base chocolate
product – chocolate crumb – in Marlbrook, Herefordshire. The
milk is sourced locally.
Other sectors, including pharmaceuticals and manufacturing,
have also begun or are planning to begin stockpiling.
"With uncertainty prevailing around the UK’s post-Brexit
trading position, stockpiling could help some businesses to
mitigate possible supply shortages," said Mark Waterman at
Vendigital, a consultancy that helps companies to prepare for
Brexit. "However, stocking high levels of raw materials could
put pressure on cash flow."
The Centre for Economics and Business Research this week
predicted that the UK's imports could jump by 38 billion pounds
($49.37 billion) if businesses were to stockpile an additional
three months' worth of raw materials and semi-manufactured goods
from the European Union and an additional month's worth of
($1 = 0.7696 pounds)
(Reporting by Martinne Geller, Paul Sandle and Nigel Hunt in
London and Shubham Kalia and Mekhla Raina in Bengaluru
Editing by David Goodman)
First Published: 2018-09-11 07:28:22
Updated 2018-09-11 17:41:10
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