Cadbury's reputation as a company founded on philanthropic values took a knock last week when it announced 700 job cuts in England and the offshoring of significant production to Poland .

But does its decision to close the 88-year-old former Fry's factory in Keynsham, and axe 200 staff at Bournville, prove the company established in the 19th century by devout Quakers has lost touch with its roots?

The evidence suggests it is following a trend - it is far from the first food and drink supplier to move production overseas (see box ), and unlikely to be the last.

But for some, the move was still unpalatable. "This is the sort of behaviour we have come to expect from a short-term, quick-strip private equity firm, not Britain's most respected chocolate manufacturer," fumed Brian Revell, national organiser for food at union Unite .

Cadbury was at pains to point out that some production will move to its giant Bournville plant, which will receive a £40m investment, and it will still employ 2,300 workers following the phased restructure. "We've had this factory in Poland for ages, and we manufacture across the globe," adds Tony Bilsborough, media relations manager. "Flakes have been made in Ireland for decades, too."

Shaun Browne, MD of corporate finance company McQueen , believes Cadbury had a duty to its shareholders to explore the most cost-effective means of manufacture. " Is Cadbury a charity or a commercial organisation? I'm sure if you spoke to the shareholders they'd say their business was to secure their future to manufacture as profitably as possible," he says. "The reality is that where you have long shelf life, ambient products, the difference in wage costs is substantial. This is very true when wage costs are a significant part of your overall manufacturing costs."

"The fundamental driver is cost, and if you can do it cheaper at the right quality, then why not?" says Tim Kershaw, director of supply chain consultancy Libra Europe.

"In Poland, you have a highly ­educated workforce with a strong work ethic, many of whom speak good English, and high levels of productivity - all for less than 50% of the wage you have to pay UK workers. Staying in the EU is important, too, because it means you get all the tax breaks without the disadvantages. That's useful politically, because if you are moving production to another EU country the government can't publicly put pressure on you not to, though it may do so behind the scenes."

Actually, it would seem even the government can see an upside to off-shoring. A Defra report published last year went so far as to state: "In the fierce competition of the grocery market, off-shoring is one way in which food and drink processors can keep costs down, ultimately to the benefit of consumers."

So where does this leave companies in the UK ? "The UK is OK," says Kershaw. "It has high labour costs, though not as high as Germany and Italy. And you have a stable, loyal and efficient workforce, while productivity is higher than some other places.

"But you have quite a highly paid unskilled workforce because of the minimum wage. Pension costs are also high, and corporation tax is higher than in some other countries. If you're manufacturing abroad, you need to consider how quickly you can respond to your customers' needs. Poland is still at least six-and-a-half hours drive from the Tunnel. If you need to respond quickly, you don't want to be in eastern Europe."

But other obstacles are coming down, says Peacock, particularly in terms of safety and quality.

"The barriers to entry in terms of quality and traceability are eroding now eastern European countries are in the EU."

But, in spite of the strong business case for off-shoring, Kershaw questions the wisdom of Cadbury's move. "Britishness is at the heart of Cadbury's brand, and maybe it's starting to miss the point of that.

"A large part of its profit comes from licensing its brand. If it had a situation similar to the salmonella scare and the product was being produced in a foreign country it could really devalue the brand and the value of those licences."

And Kershaw adds: "Being produced abroad is also something competitors producing in Britain might pick on - particularly if they haven't got a lot else to differentiate themselves from Cadbury."

Bilsborough is confident Cadbury will remain a British company in word and deed, however. "We are a British company that makes British confectionery for British people."n