Kraft Foods Inc, the new US owner of British confectionary maker Cadbury, plans to shift part of the company's business to Switzerland, a move that could result in loss of millions in tax revenue every year for the UK exchequer.
The restructuring plan would help Kraft Foods save millions of pounds in UK taxes, the Guardian reported Friday. Under the new arrangement, ownership of Cadbury's key brands including Diary Milk, Crunchie, and Twirl will be transferred to a Zurich-based holding company.
According to Kraft Foods, the reorganization, which is likely to be finalised next year, would not significantly affect the Birmingham-based Cadbury's UK staff, but the company would be integrated into Kraft Food's existing European business model.
Illinois-based Kraft, the world's second-largest food and beverages company, acquired UK's much-loved Cadbury earlier this year through a historic corporate battle for approximately $19.6 billion (See: Shareholders approve Kraft's acquisition of Cadbury).
According to the US company, the relocation was not entirely motivated by tax.
A spokesman for Kraft Foods said, "Since 2006 we have been implementing our European model involving a holding company based in Zurich together with local companies in country markets.''