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.''

"The reorganisation has given us greater focus on our priority brands and has helped us grow faster. We are integrating Cadbury into this model.''

''This involves the transfer of certain roles to Switzerland, though the majority of UK-based roles will remain in the UK," the spokesman justified. Switzerland is more attractive to corporates, where the tax rate begins at 15 per cent, and can be even lower up to 8 per cent in specific cases. The corporation tax for businesses in the UK is currently 28 per cent, which in the June budget, the government announced to bring down to 24 per cent over the next 4 years.

Critics consider Kraft Food's plan undermines its stated commitments of long-term future of Cadbury in Britain. Earlier, Kraft broke its promise to keep Cadbury's Somerdale unit near Bristol when it took over, resulting in loss of employment of around 400 people.

Some projections indicate that Cadbury, which has been paying around £125 annually to the UK treasury, could slash it by over £60 million through the move.

The businesses of both the companies would remain separate, until the accounting structure and other systems are streamlined next year.