Confectionary giant Cadbury could face a major consumer backlash following revelations it paid no corporation tax last year, according to a leading independent brand valuation company.
Thayne Forbes, Joint Managing Director of Intangible Business, @IntangibleBiz says that the Cadbury brand is on the way to becoming a pariah in the eyes of the British public following a number of controversies.
Cadbury has suffered a series of controversies since being bought by American company Kraft in 2010, with consumers upset about everything from a change in ingredients to the closure of factories.
Thayne believes that the revelation that Cadbury paid no corporation tax last year, despite posting profits of £96.5 million could be the last straw for many consumers.
He said: “I think that Cadbury is in real trouble over this. It is entirely possible that people will react to this in the way they reacted to Starbucks’ corporation tax avoidance – with a boycott.
“The Cadbury’s brand was once seen as a British institution. However, with people complaining that Kraft have changed the recipe of some of their most popular products to a more American style and now these revelations of tax avoidance, it has started to lose the connection it once had with consumers.
“Cadbury remains a strong brand that can withstand a lot, but they need to react positively to this in order to maintain its good reputation.
“Laying out its contribution to the UK economy will not wash for Cadbury in the eye of the consumer. They’re effectively saying that because they pay one tax they shouldn’t have to pay another – and the consumer knows full well that it is not a discretionary matter.
“Cadbury needs to put somebody up in front of the camera to address this in a positive manner. Regaining the trust of the British consumer is probably more valuable to the brand than the millions it saved via avoiding corporation tax.”
