Cadbury sells popcorn business

By Anita Awbi

- Last updated on GMT

Related tags Cadbury schweppes Confectionery Corporation Chewing gum

Leading confectioner and drinks company Cadbury Schweppes has
announced plans to sell its UK-based popcorn and toffee divisions,
as the company sets about tweaking its extensive global portfolio.

The multinational firm, famous for Dairy Milk and Dr Pepper's, will offload the sugar confectionery and popcorn business Monkhill, which has four manufacturing plants and one distribution centre in the UK.

Cadbury expects a sale to be agreed by the end of the year.

The Monkhill division produces popular snack brand Butterkist, and generated £80m worth of profits in 2005.

The proposed sale follows on from the recent divesture of Cadbury's South African beverage unit Bromor to Botswana-based Tiger Foods for $191m (€157m).

And earlier this year the EU cleared the $2.1bn takeover of Cadbury Schweppes' European drinks business by a private equity group, which included rights to key brands such as Orangina and Oasis.

The sales indicate a shift in the firm's global focus from fizzy drinks and side-line confectionery products to key brands and gum manufacturing.

Changing consumer trends to a healthier lifestyle has translated to falling profits for sugary drink companies.

And rising raw material and energy costs have prompted many manufacturers to shrink their portfolios and concentrate on key value-added brands.

Cadbury said the divestures of Bromor, the European drinks business and Monkhill will allow it to repay debt and further focus on its global confectionery and drinks businesses in other parts of the world.

The firm now intends to go head to head against Wrigley for a bigger share of the thriving chewing gum market.

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