Kraft to split snack and grocery businesses

Kraft Foods has announced that it is to separate its businesses into a North American grocery business and a global snacks company.

Its snacks business, which is growing at a faster rate than other sections of the company, would include brands such as Oreos, Cadbury, Milka and Trident gum and have revenues of about $32 billion.

Irene Rosenfeld said in the statement, “The global snacks business has tremendous opportunities for growth as consumer demand for snacks increases around the world. The separation will recognise the distinct priorities in each business. A series of strategic acquisitions have built two sizeable businesses that would now benefit from being run independently of each other.”

The announcement comes only days after Kraft was forced to pay £400 million towards Cadbury’s deficit-struck pension scheme. Shortly after buying Cadbury, the US firm was criticised for trying to encourage workers to leave the defined-benefit plan, after discovering that a quirk in its rules makes it difficult to close unilaterally. The assessment, disclosed in a recent communication to pensioners, has found a deficit of £326 million – up from just £8m at the last valuation in 2007.