BBC News
watch One-Minute World News
Last Updated: Tuesday, 19 February 2008, 09:31 GMT
Cadbury plans to increase prices
Cadbury's chocolate bars on the production line
Heading for a price rise?
The price of chocolate and sweets made by confectionery firm Cadbury Schweppes could be about to increase in order to offset rising raw material costs.

The company, whose brands include Dairy Milk chocolate and Trident gum, said it would seek to lift prices because costs were set to rise by 5-6% in 2008.

Its comments came as it reported a 9% fall in annual profits to 670m ($1.3bn) as restructuring costs rose.

Cadbury is currently in the process of spinning off its American drinks unit.

Split

Revenues at Cadbury Schweppes' confectionery business grew by 7% in 2007, the firm said, the best performance in a decade.

In the UK, confectionery revenues rose 5%, helped by an advertising campaign for Dairy Milk and the relaunch of the Wispa bar.

Snapple drinks

For the coming year, the company said it expected revenue growth in its confectionery business to be between 4% and 6%.

However, it warned: "Commodity input costs are expected to be 5% to 6% higher in 2008 and we will seek to offset these increases through price rises."

Cadbury added that the demerger of the North American drinks business - which includes brands such as Dr Pepper and Snapple - was set to be completed in the second quarter of the year.

Originally, Cadbury had been trying to sell the drinks business, but the turbulence in the world's financial markets last year scuppered these plans, so the firm opted to spin it off instead.

The company said that following the division of the firm, Roger Carr, currently deputy chairman, would be appointed chairman of the new confectionery company, which will be called just Cadbury.

Wayne Sanders, former president and chief executive of Kimberly-Clark, will become chairman of the new drinks company, Dr Pepper Snapple Group.

Shares in Cadbury Schweppes fell more than 5% to 579p after its results disappointed analysts and the company added that it would not return cash to shareholders following the demerger.

SEE ALSO
Wispa return helps Cadbury sales
11 Dec 07 |  Business
Cadbury scraps drinks sale plan
10 Oct 07 |  Business
Cadbury factories shed 700 jobs
03 Oct 07 |  Business
Cadbury's to go ahead with split
01 Aug 07 |  Business
Debt worries extend Cadbury sale
27 Jul 07 |  Business
Cadbury plans to split business
14 Mar 07 |  Business

RELATED INTERNET LINKS
The BBC is not responsible for the content of external internet sites



FEATURES, VIEWS, ANALYSIS
Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit

PRODUCTS & SERVICES

Americas Africa Europe Middle East South Asia Asia Pacific