Cadburys job losses - Our government is sleepwalking into another unemployment disaster

This week saw 100 new jobs in Ireland from Apple but over 200 job losses as Cadburys moved some of its manufacturing plant out of the country.

As can be seen on this chart, Poland is ranked 24th and Ireland the 5th for the highest electricity prices for industrial users in Europe :

http://ec.europa.eu/eurostat/statistics-explained/index.php/Energy_price_statistics

There is an interesting discussion here on the Polish energy policy :

Garcia called “illogical” the fact that companies will have to pay more for energy just because it is ecological. He argued that this would limit the investment potential of the sector, pose a threat in terms of competitiveness and lead to moving production outside the EU.  

“To grow, you need energy – in this case the cheapest energy possible. Energy prices in the EU are expected to grow and this is a threat,” he said.

Poland set a renewable target of 19% for electricity compared to Ireland's 40%. As can be seen here Poland is not expected to even meet these targets :

http://www.keepontrack.eu/keeping-track/poland/2014/

Their government did not transpose the EU Renewable Energy Directive into national law. The European Commission were not happy and in March 2013 proposed a daily penalty of €133,000, around €48m a year. By December 2014, this proposed fine was reduced to € 61,000 a day, about €22 million a year. I can find no date for a judgement that will actually impose the fine. There are no subsidies for renewable generation and no multi-billion Euro investment to upgrade its already adequate grid infrastructure.  We are told by Keep On Track that the Polish Prime Minister, Donald Tusk expresses the argument that energy generated from [renewable] sources is the most expensive one and contributes to growing energy prices for end users, deteriorates the landscape and adversely affects the functioning of the electricity system. Contrast this position with that of Irish politicians who tell us idiotically that renewable generation will bring down the price of electricity.

So where are Cadbury planning on moving their manufacturing plant to - well, you guessed it - Poland. England has seen two Cadbury plants close a few years ago and move to Poland so it shouldn't have come as big surprise that Irish plants were next :


But on Tuesday it said earlier plans by Cadbury to close the plant and move production to Poland were too advanced - Cadbury plant, Somerdale,  BBC News 2010 

But days after the takeover was completed the firm controversially announced that it would close the plant and move production to Poland - Cadbury plant, Keynsham, BBC News 2011

The plant in Coolock, Dublin opened in 1964, the Somerdale plant in England opened in 1935. 

Jobs Minister Richard Bruton said about the Irish closures :

“Unfortunately, due to a cost base which is significantly out of line with competitor countries, it appears likely that the company will proceed,” he said in a statement today.

Of course, the costs of energy is just one cost but it is quite a significant one for a manufacturing firm, whereas it would be less for say a financial services firm.

So we can see a trend here. The EU monster is getting angry and beginning to growl. The Polish government stands up to it, while the Irish government grovels at the monster's feet, while warning its own people about fines for disobeying Big Brother. The net result is that Poland gains 200 jobs, while 200 hard working Irish people are now forced to seek handouts at the Social Welfare office. 

This trend can only continue - 10 closures like the plant in Coolock equates to a minimum of social welfare payments of € 20 million per year, roughly equal to the fines threatened by the EU on Poland for failing to implement the EU's energy policy. Then there is the tax take, council rates and the contribution to local economies to take into account. Who are the smart people here, who are the ones who have the best grasp of maths and economics ?

Meanwhile Richard Bruton is flapping around like a headless chicken blaming a cost base which his government are responsible for. But we know the energy policy will not change, so expect more flapping and unfortunately more job losses to come.