“Europe Ventures”: Kraft Goes After Cadbury’s Profit Margins.
Europe Ventures, Confectionery maker will give extra profit margins for Kraft.
The proposed takeover by Kraft of UK company Cadbury in an effort to improve the company’s margins may see other U.S company’s trying to consolidate by entering the European market.
Europe Ventures economists believe that we may see other food companies follow Kraft’s lead as companies look to improve sales and buy other companies to boost thier market size.
After being thwarted on a $16 billion dollar bid, Kraft has alerted the food industry that it is now looking to the future for further growth. Kraft sees Cadbury as the perfect company to add to their portfolio of brands.
Cadburys who are the second largest confectionery maker in the world are renowned for their chocolate brands where most of their sales are in the UK. Industry experts told Europe Ventures that the reason Kraft like the look of Cadbury is because chocolate tends to have a high profit margin.
This would add value to Kraft’s portfolio as they have many brands that do not have the high mark up such as chocolate. Europe Ventures economists see that Kraft are now adding to their confectionery range as they see the potential in this market. Already Kraft has numerous brands in Cheese, pizza and frozen food and some in the confectionery range.
Europe Ventures sees this as a shrewd move by Kraft but expect them to pay a premium price to Cadbury shareholders, if they do get the company it will add value as Cadbury is a quality company with some great established brands.
