The takeover of the confectioner Cadbury by the US giant Kraft Foods will badly affect the British company's ethical rating, according to analysts.

Researchers at the Ethical Company Organisation said the ethical index rating of Cadbury will fall from a respectable 68 to something closer to Kraft’s existing score of 44 if the takeover bid is accepted by shareholders.

The ethical rating is based on a vast research database containing records for 30,000 companies, court reports, and NGO research. Companies are ranked on 15 different ethical criteria, including support for organic agriculture, attitude towards genetic modification, involvement in fair trade and the supply of political donations.

Green & Blacks

Cadbury brands, such as Green & Blacks, which aims to be entirely fairtrade by the end of 2011, will now be associated with Kraft brands including Oreos, Ritz and Carte Noir.

The Ethical Company Organisation, which publishes an annual Good Shopping Guide on business's ethical ratings, said that: ‘Kraft’s involvement in non-fair-trade products and share of public criticisms mean that Cadbury’s fair-trade associations and interests will need to be re-evaluated.’

Fair trade

Kraft has been seen to oppose the fair trade movement, telling Oxfam in a report on the coffee industry that the 'market will find its own solution because countries and producers will be driven out of the market. Our role is on the demand side – our role as Kraft is to increase consumption'.

Cadbury declined to comment on its ethical rating, and said that the ethics of its business could not be considered in the takeover bid.

‘If enough money is put on the table, then the board has a duty to its shareholders,' said a Cadbury’s representative.

Sourced from The Ecologist, Jan 2010