Kraft is closing down Terry's chocolate factory. But is the US food giant now preparing to take over the ownership of another York confectionery firm? Business editor RON GODFREY reports.

IT IS only speculation at this stage - but it's enough to send Cadbury Schweppes' share prices through the roof.

The rumour in the City is that US chocolate giant Hershey or their American rivals Kraft are preparing bids to take over Cadbury.

As a result, shares were sent soaring on the stock exchange on Tuesday by 2.4 per cent, to an all-time high of 567p.

It may come to nothing. But if either deal went ahead, there could be major implications for Monkhill Confectionery, based on the Nether Poppleton Industrial Estate.

The factory, a division of Cadbury Trebor Bassett, employs 250 people at Poppleton, as well as another 500 in Pontefract.

Of the two possible buyers, Kraft would be the more controversial, following its decision to shut down Terry's and move production of products such as Chocolate Orange and All Gold abroad.

A trade union leader today said that if such a deal did go ahead, it would be "disgraceful" given the transfer of jobs to other countries such as Poland and Sweden.

John Kirk, organiser of the Yorkshire and North Derbyshire GMB, said: "It would put into question the credibility of Kraft Foods. It would be disgraceful to transfer work abroad and then purchase companies in the UK."

Of 316 jobs at Terrys of York, 92 have left, with 14 more leaving at the end of the month and the rest due to leave between the end of May and the beginning of August.

Kraft Foods was today staying tight-lipped about the speculation. Its spokesman said: "It is company policy that we never comment on speculation on acquisition or sales."

There was a similar reaction from Cadbury's Schweppes. Its spokesman said: "These rumours float around all the time.

"Our official policy is not to comment on market rumours."

Experts in the confectionery industry say Kraft Foods would appear to have the spare cash to go some way towards such a bid, having recently sold its Altoids brand for nearly $1.5 billion to Wrigleys.

Offloading another brand, it is argued, could also ease Kraft Foods' path should such a deal be scrutinised by the regulation authorities.

Monkhill Confectionery recently relaunched Sharps Toffee as Sharps of York in order to take advantage of the city's reputation as the chocolate and confectionery capital of the UK.

It now manufactures the toffee at Poppleton on the former Craven Keiller site.

Updated: 10:39 Thursday, May 12, 2005