The world’s largest confectioner Cadbury Schweppes is expected to confirm the cost of the salmonella recall and resulting sales decline when it delivers its interim results on Wednesday (2 August).
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It has been widely speculated that the cost of the recall has risen to GBP20m (US$37.33m), up from the GBP5m that the company confirmed when the recall was first announced. Up to one million chocolate bars were withdrawn from the market last month, when Cadbury notified the UK’s Food Standards Authority that salmonella contamination has been detected in seven of Cadbury’s products.
However, the cost of the scare is likely to be seen in a sharp decline in sales after consumer confidence in the safety of Cadbury’s chocolates was shaken. The company also experienced a backlash due to the fact that it first discovered the contamination in January but failed to notify the proper authorities until five-months later. It has been estimated that sales could have dropped by as much as 25%.
“These figures are purely speculation,” a spokesperson for Cadbury told just-food today (31 July). “We will cover anything that we can in relation to the recall when we release our interim results on Wednesday.”
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By GlobalData
