Some of this volatility that the Cadbury stock experienced can be attributed to the news surrounding the company’s progress. Its rise in June 2007 can be attributed to a great extent to the market forces as well as perhaps the results of the period being announced.
However, the subsequent decline in July can be explained by the Salmonella contamination that plagued the food industry. On 16th July 2007, the company was fined one million sterling by a Birmingham court. This was on account of the company’s failure to prevent its salmonella contaminated products from reaching the market. This initiated a downward trend that was further augmented by the uncertainty surrounding Cadbury’s separation of its confectionary and beverages business and possible combination of the latter with Cott Corp in America which had recently released relatively weak second quarter results.
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