Cadbury to sell beverages business

London - British confectionery and soft drinks giant Cadbury Schweppes yesterday put a For Sale sign on its European beverages business, which includes the brands Schweppes, Oasis and Orangina.

Cadbury said the sale, which it hoped would occur in "the near future", would help to reduce the group's debt.

"The board has decided to focus the group's financial and management resources on its confectionery and other beverage businesses," Cadbury said.

"Proceeds will initially be used to reduce the group's net debt, which in June 2005 was £4.3 billion ."

Experts have been reported as saying that the sale could reap at least £1 billion.

However, one analyst said the proceeds could be between £1.2 billion and £1.6 billion, adding that potential buyers could include rival European soft drinks group Britvic, French spirits and wine maker Pernod Ricard and US drinks giant PepsiCo.

Cadbury has been pushing a cost cutting programme since mid-2003. It has closed 10 percent of its 133 factories worldwide and reduced its workforce by 10 percent. Cadbury employs more than 50 000 people worldwide, with about 7 000 in Britain.

Sales of Cadbury's confectionery rose 7 percent during the first six months of the year, led by a 9 percent rise in Cadbury Dairy Milk chocolate, a 15 percent hike in sales of Trident chewing gum and a 17 percent increase in Halls cough sweets. Net profit rose 6.1 percent to £244 million.

Cadbury bought chewing gum business Adams for $4.2 billion (R26.9 billion) from US drugs giant Pfizer in March 2003. Under his Fuel for Growth plan, chief executive Todd Stitzer wants to grow sales by between 3 percent and 5 percent over a four-year period to 2008.

Revenue from Europe Beverages totalled £653 million last year, with about 85 percent generated in France, Germany and Spain.

Its sales volume of 1.7 billion litres made it the third-largest player in the European carbonated soft drinks market, Cadbury said.

About 3 000 employees are employed by the unit, which has bottling plants in Germany, Spain, Portugal and Belgium.In other countries, the business operates through licence agreements with third party manufacturers and distributors.

-From AFP and Sapa-AP