Cadbury owner defends avoiding tax bill despite sales of £2 billion

Mondelez International, the American firm which owns the Birmingham-based chocolate company, legally avoided paying tax through a controversial exemption scheme even though Cadbury UK made almost £100m profit in 2014.

A Mondelez spokesperson said: "In common with all global businesses, we pay corporation tax based on the laws of the countries in which we operate. We comply with all applicable tax legislation in the UK, and on a global basis we pay hundreds of millions of dollars in corporate income tax annually.

"Since 2010 we are proud to have invested over £200m into both UK-based manufacturing and research and development supporting our 4,500 employees in the UK.

"Importantly, independent academic research has also shown that as a business we are worth over £1.06bn to the wider UK economy, illustrating our impact reaches far beyond the factory gates."

Previously known as Kraft Foods, Mondelez bought the Bournville-based chocolate company after a bitter takeover battle in 2010 for £11.5bn.

It then closed its Somerdale factory in Bristol, axing 400 jobs, and cut 200 more in the UK in 2012. A two-year redundancy programme axing a further 200 jobs at Bournville in Birmingham, where it makes Dairy Milk, was unveiled a year ago. Around 1,200 still work there.

It emerged Mondelez is legally avoiding UK tax bills with the help of interest payments on an unsecured £8.2bn debt listed as a bond on the Channel Islands stock exchange. Under a 'quoted Eurobond exemption' the interest payments are offset as losses against tax in its British operation. Cadbury UK made profits of £96.5m in the year to December 31, 2014. Its holding company, Cadbury Ltd – previously Cadbury plc – recorded a profit of £826m and paid dividends of £1.3bn in the same year but paid no corporation tax.

The Mondelez spokesman added: "Our £200m investment includes £18m into our Global Science Centre in Reading and our world-class research and development site in Bournville, where every new chocolate bar we sell in the world is invented by a team of talented chocolatiers.

"Our recent £75m investment into four state of the art new lines in Bournville will secure the next generation of manufacturing there – a site which makes over five million Cadbury Dairy Milk bars every day."

But union leaders have slammed the company. Unite regional officer Joe Clarke said: "Nifty footwork by clever accountants meant that the treasury was denied millions of pounds in corporation tax that could have been spent on the NHS and other much-needed public services. The case for a closing the net on the legal means for corporate tax avoidance is further reinforced by the Mondelez revelations.

"While the exchequer is denied its due from Mondelez, shareholders are feasting on dividend payments of £1.3bn."