GOVERNMENT officials have released previously-secret letters relating to Nestlé’s takeover of Rowntree in 1988.

The letters, between then Prime Minister Margaret Thatcher and then Rowntree chairman Kenneth Dixon, show how the latter lobbied the Government to intervene, to protect the historic York company’s identity.

Nestlé completed its takeover of Rowntree in June 1988, after winning a battle with fellow Swiss confectioner Suchard, after the two firms snapped up vast quantities of Rowntree shares.

As the battle intensified, Mr Dixon wrote to Mrs Thatcher, asking for the takeover to be referred to the Monopolies and Mergers Commission (MMC).

Mr Dixon argued that British companies, such as Rowntree, were being put at “substantial disadvantage” to others in Europe as the 1992 creation of an internal European market loomed closer.

On May 10, 1988, he wrote: “British companies which are successful in preparing for 1992 by developing a competitive position in Europe are the natural targets for continental European companies determined to consolidate their position in Europe.

“The UK has one of the most open markets in the world. There are material practical obstacles to completing contested takeovers on the continent.”

He said the confectionery industry was not the only one affected.

He wrote: “We face a substantial risk that 1992 will see the decline of international British industry, rather than its growth.”

Mr Dixon asked for the takeover to be referred to the MMC, saying: “The matter is urgent because the two Swiss companies, Nestlé and Suchard, already own more than 40 per cent of our shares.”

Mrs Thatcher replied to Mr Dixon eight days later, saying his concerns about competition policy had been addressed by Lord Young, then trade and industry secretary, in a speech at the CBI annual dinner on May 12.

Lord Young had said it may not matter if the UK was left with only one supplier of a product, if others were available from elsewhere in Europe.

Mr Dixon wrote to Mrs Thatcher and other MPs again on May 19, warning that the Swiss firms were trying to “buy what they cannot build” and saying the takeover was unfair, as Swiss companies were protected by their government from foreign takeovers.

He said Rowntree’s marketing flair was “universally recognised and admired” and said the firm had prepared itself for a Europe-wide market.

Looking back today, Mr Dixon said: “I think the letters were sensibly argued at the time, and I think there is still a lot of sense in the arguments made. But that was 20 years ago, and we are now looking at history.”

The letters were released following a request by The Press to the Cabinet Office, under the Freedom of Information Act.