Mondelez International’s (MDLZ) subsidiary Cadbury has lost its royal warrant for the first time in 170 years. The decision comes as King Charles III reviewed the list of warrant holders, and removed over 100 brands, such as luxury chocolatier Charbonnel et Walker and consumer goods giant Unilever (GB:ULVR).
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It must be highlighted that Cadbury was first granted a royal warrant by Queen Victoria in 1854. Importantly, a royal warrant allows a company to supply goods or services to the Royal Household.
The decision to remove Cadbury from the list comes amid growing scrutiny of companies with ties to Russia due to its ongoing war with Ukraine. Earlier this year, a campaign group, B4Ukraine, urged King Charles to withdraw warrants from companies with ongoing operations in Russia, including Mondelez and Unilever.
Cadbury Expects Minimal Financial Impact
While the warrant’s loss would be a significant blow to Cadbury’s image and heritage, it will likely have a minimal impact on the company’s sales.
In the third quarter of 2024, Cadbury reported strong performance. Revenues in Europe increased by 4% due to market share gains in France, northern Europe, and Russia. Further, the company witnessed success in the Britain, Ireland, Middle East, and Africa (BIMA) region, as sales climbed 10%.
Investors should note that Cadbury maintains strong brand awareness, with 96% of UK respondents recognizing the brand, according to a report by a market and consumer data provider, Statista.
Is MDLZ a Good Stock to Buy Now?
Turning to Wall Street, MDLZ stock has a Strong Buy consensus rating based on 15 Buys and two Holds assigned in the last three months. At $78.40, the average Mondelez price target implies a 32.25% upside potential. Shares of the company have declined 16.6% year-to-date.
