Mondelez International is to switch production of Cadbury confectionery from New Zealand to Australia after failing to find a third-party manufacturer for its Kiwi products.
The company announced back in February its Dunedin plant in New Zealand would be closing in early 2018 but it had hoped to find a manufacturer to make Cadbury’s Kiwi products – including Jaffas, Pineapple Lumps, Buzz Bars and Pinky Bars – in the country.
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But efforts to find a manufacturing partner have failed, the company said, and it has confirmed production will move to Australia.
At least 300 employees at the Dunedin site are likely to be made redundant.
Mondelez insisted it had conducted an “exhaustive search” to find a potential manufacturer.
“We looked at a range of potential solutions, from partnering to make the full portfolio, through to offering individual products to potential suppliers,” James Kane, the head of Mondelez’s operations in New Zealand, said.
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By GlobalData“Unfortunately, we only received one formal response to the RFP [request for proposal] documents from a local supplier that was interested in manufacturing the full portfolio of Kiwi products in New Zealand.
“We’ve worked very closely with that supplier over the last six months to try and find a way for them to take on the work. However, the unique requirements of these products – particularly the marshmallow-based products – meant it simply wasn’t possible.
“The iconic Kiwi products require particular technologies, production processes and skills, and very few manufacturers anywhere in the world could take on this work while continuing to match our product requirements.”
Mondelez will now focus on shifting production to Australia early next year.
The move has angered the trade union E tu which said it was “genuinely surprised” by the decision.
Neville Donaldson, E tu’s director of industries, said the union was sceptical about whether Mondelez had intended to find an alternative local manufacturer.
“We do question whether there was a genuine effort to keep that work here,” Donaldson said. “What was that exercise really about? Was it about trying to keep 10 percent of that production in New Zealand – or was it really about brand-protection and easing public anger over this closure?”
