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Cadbury faces £20m salmonella hit

Confectionery giant Cadbury Schweppes has said the salmonella contamination at one of its production plants will cost it about $37.5m this year. Half of the sum relates to the cost of recalling one million chocolate bars, while the rest comes from advertising costs and "manufacturing improvements".

Cadbury performed well in the Americas and Asia, but said it had a "challenging" start to the year in Europe – particularly the UK – where the market was weak. It is being attributed to the withdrawal of a million bars in June after a pipe at its plant in Marlbrook, Herefordshire, and caused salmonella contamination.

A report commissioned by the government’s Food Standards Agency found that Cadbury was using an out-of-date approach to risk assessment and product testing for salmonella contamination.

The firm first found traces salmonella in some of its best known chocolate bars in January, but it was not until six months later that it decided to tell the health authorities. A number of people have said they are considering legal action against Cadbury, claiming to have contracted salmonella poisoning from one of its chocolate bars.