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Cadbury Schweppes losing its fizz

Stephen Beard Jun 19, 2007


Bob Moon: Let’s start with the company behind the country’s oldest soft drink, Dr Pepper. Cadbury Schweppes is also the owner of the 7-Up brand as well as Snapple but it may not be for long. The firm now says it’s likely to sell the U.S. unit that makes those drinks. And it’ll be canning thousands of workers in a major cost-cutting move. Marketplace’s Stephen Beard has more from London.

Stephen Beard: Cadbury is cutting 7,500 jobs — that’s 15 percent of its workforce. The company is under pressure after profits fell sharply last year.

Cadbury, the world’s biggest candymaker, is also planning to shed its American soft drinks unit. The Schweppes group produces among other things Dr. Pepper and 7-Up. It will likely be sold for around $16 billion to a private equity firm.

The company is concentrating on candy says analyst Martin De Booe.

Martin De Booe: Cadbury’s strategy really since the turn of the millennium has been to reshape themselves as a global confectionery business, entering the gum market, and that really now is their core and their focus.

He says that as a leaner, and more profitable firm, Cadbury will hope to fend off any private equity group that might want to swallow up the whole company.

In London, this is Stephen Beard for Marketplace.

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