Cadbury and the Worm Controversy*



Case Code : CLSDM042
Publication date : 2005
Subject : Sales and Distribution
Industry : FMCG - Food and Beverages
Length : 03 Pages
Price : Rs. 100

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Key words:

Cadbury, Worms, Bournvita, Food and Drug Administration, Mumbai, Kerala, Ban, Dealers, Manufacturing Plants, Refrigeration, Prevention of Food Adulteration Act, Packaging, Amitab Bachchan


* This caselet is intended for use only in class discussions.
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The caselet primarily deals with the worm controversy in October 2003 when a stockist in Mumbai found worms in Cadbury's chocolates. It discusses the impact of this incident on Cadbury's reputation and ethical image. It describes the steps taken by the company to regain its lost image and briefly examines how Cadbury's competitors gained from the worm controversy. It also presents an overview of the Indian chocolate market.


» Ethical and social responsibility of companies
» Role of regulatory bodies
» Importance of quality aspects in fast moving consumer goods


Cadbury India Limited (Cadbury), a subsidiary of the leading global beverages and confectionery maker Cadbury Schweppes, was started in 1948. Cadbury gradually carved a niche for itself in the Indian chocolate market by producing brands like Five Star, Dairy Milk, Perk, Gems, etc.

Health drinks like Bournvita were also from Cadbury’s stable. As of December 2004, Cadbury held a major share of 60% in the Rs 6.50 billion Indian chocolate market and was followed by Nestle (25%) and Amul (15%)...

Questions for Discussion:

1. Examine the effect of the worm controversy on Cadbury. Explain the measures taken by the company to overcome the problem.

2. Cadbury's image took a beating during the worm controversy in 2003. The company followed an aggressive strategy to reinforce its commitment to customers. How would you evaluate the ethical stand taken by the company?