Blog: Burton's could return Cadbury biscuit brand to Mondelez in UB takeover
Katy Askew | 10 October 2014
If Burton's Biscuit Co. is successful in its bid to take control of peer United Biscuits, the UK biscuit maker could return the Cadbury brand to Mondelez International in a bid to settle competition concerns.
Burton's manufactures Cadbury biscuits under licence from Mondelez. Cadbury is one of Burton's fastest-growing brands and the company has focused on expanding sales of Cadbury biscuits under its strategy to focus on "power brands", which also include Jammie Dodgers, Wagon Wheels and Maryland Cookies.
According to a report from Sky News, Mondelez and Burton's are in talks over the potential return of the rights to make Cadbury biscuits to the US confectioner, should Burton's acquire United Biscuits.
Burton's, which is financially backed by investment fund Ontario Teachers' Pension Plan, purportedly hopes to unite the UK's number one and number two biscuit makers - a proposal that would obviously require close scrutinisation from the country's competition authorities.
OTPP and Burton's have declined to comment on whether they are interested in the possible sale of United Biscuits by its private-equity owners, Blackstone Group and PAI Partners. However, a source close to the situation stressed OTTP has plenty of experience in sealing the deal and suggested it will most likely be able to overcome competition issues by selling certain assets.
The licence to the Cadbury brand could go some way to assuaging the worries of competition regulators. But would it be enough to ensure such dramatic consolidation in the UK biscuit category didn't dampen competition, create a monopoly and, ultimately, work to the detriment of UK consumers?
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