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The Press reveals secret Nestlé-Rowntree takeover files
A SENIOR Government Minister called for the takeover of York confectionery giant Rowntree to be referred to an independent watchdog, The Press can today reveal.
As the company's future hung in the balance in 1988, and amid intense national public debate, John MacGregor raised concerns in writing with Prime Minister Margaret Thatcher and some of her most senior colleagues.
His letter is today made public by The Press, after the Cabinet Office conceded defeat in a Freedom of Information dispute lasting more than five years.
Mr MacGregor, the then Minister for Agriculture, Fisheries and Food, wrote to Trade and Industry Secretary Lord Young on May 5, 1988, urging him to refer the takeover bids by Swiss firms Nestlé and Suchard to the Monopolies and Merger Commission (MMC).
He copied his letter to Mrs Thatcher, Chancellor Nigel Lawson, Foreign Secretary Geoffrey Howe, and Cabinet Secretary Sir Robin Butler.
But his calls were not heeded and the takeover by Nestlé went through uncontested.
It is the first evidence of disagreement within the Government over how to deal with the takeover, which was particularly controversial because Swiss companies would have been effectively protected by law from any bids by British firms.
In his letter, Mr MacGregor effectively echoed the calls of 13,000 readers of the then Yorkshire Evening Press, whose Hands Off Rowntree campaign said the minimum the Thatcher Government should do was refer the case to the MMC.
York Central MP Hugh Bayley said the John MacGregor letter was “absolute dynamite”.
He said: “Everyone at the time was calling for the matter to be referred to the MMC and now we find that even the Cabinet Minister with specific responsibility for the food industry was in favour of referral.
“As it happens, Nestlé's takeover has turned out not to be a bad thing, as it has invested hundreds of millions of pounds in York, but this news makes it clear that the Thatcher Government could have done much more to protect its British shareholders but decided against it.”
George Tutill, who became GMB convenor at the factory only days before the Nestlé bid, said he was not surprised there had been Cabinet calls for referral.
“Certain MPs were fighting for referral but it fell on stony ground with Thatcher,” said Mr Tutill, who retired a decade ago.
He stressed that fears for the future of the factory had proved unfounded, with a considerable investment by Nestlé in York.
Kenneth Dixon, who was chairman of Rowntree at the time and wrote to Prime Minister Margaret Thatcher to ask for the takeover to be referred, said yesterday: “All I can say is that this is an interesting piece of history and it doesn't surprise me that these papers apparently show there were differences of opinion among Cabinet members.”
York Outer MP Julian Sturdy, who, like Mr Bayley, wrote to a tribunal judge in support of The Press’s battle, said he was delighted the papers had been released.
He said: “I was happy to support the newspaper by writing to the tribunal judge to voice my concern over the illogical decision not to release the documents.
“I am sure they will make interesting reading as the takeover had a profound impact on York and I look forward to studying their contents closely.”
Lord MacGregor declined to comment. The Press contacted Lord Young’s office but received no response.
A Nestlé spokesman said that since the takeover, York had remained a global centre for confectionery and Nestlé remained committed to the city.
He said the business had invested more than £200 million since 1988, making York’s site one of the world’s largest and most successful confectionery factories.
He said Nestlé's global research centre for confectionery was also based in York, making the site the global hub of its innovation and it had doubled in size, following a £7 million expansion, providing new investment and jobs.
- MacGregor’s ‘dynamite’ letter disclosed for first time>>
- Lord Young - The man at the centre of the storm>>
- Press case could make it easier to access files>>
- Timeline of Rowntree files battle>>
- Nestlé-Rowntree takeover never debated in Cabinet>>
- Dismay over ‘pinkos’ comment>>
- Comment: Why were files kept hidden?>>
- The Rowntree files - PDF (506k)
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