Salmonella costs Cadbury £30m

4 January 2007
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04 January 2007

Cadbury Schweppes has admitted the UK salmonella outbreak last summer will cost it £30 million. The confectionery giant was forced to withhold supplies when up to 37 people fell ill after eating its products. Sales were further hit by the subsequent customer concern.

A preliminary trading update reveals that charges relating to the contamination increased from an estimated £20 million. The total bill largely reflects the costs of cleaning factories and installing new equipment to prevent another scare.

A spokesman for Cadbury told SM the company now operated a system of "positive release", whereby no supplies are released into the supply chain until laboratory tests have been completed on stock samples. This system was introduced after the scare and created the delay in providing supplies over the summer.

The Health Protection Agency said contamination from a leaking pipe at one of the factories was the most likely cause of the outbreak.

SMjan2007

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