THE confectionery giant Cadbury Schweppes, whose British chocolate business is still reeling from a poisoning scare and a slump in demand caused by the hot weather, is to launch into the UK chewing-gum market.

The move will put Cadbury head-to-head with Wrigley of America, which has a virtual monopoly of British gum sales.

Cadbury’s initiative is expected to be announced tomorrow by chief executive Todd Stitzer at a seminar for investors.

The company propelled itself into second place in the global gum market in 2003 with the £2.7 billion takeover of US-based Adams, maker of Trident and Dentyne as well as Halls cough sweets and Bubbas bubble gum.

Until now, Wrigley, which has operated in Britain since 1911, has completely dominated the British gum market, with more than 95% of sales.

But Cadbury has been encouraged by the progress it has made elsewhere in the world, where its Adams brands compete against those of Wrigley.

Cadbury Schweppes is building a new plant in Poland that will produce the base gum from which its products are made. Many industry observers had expected that Cadbury would wait until that was completed before trying to tackle the UK market.

But the company has now decided to press ahead. It is thought that the first brand to be launched in Britain will be Trident, using plants in Turkey and Denmark.

In America, Cadbury now has 31% of the gum market, up from less than 27% at the time of the Adams takeover. Stitzer told analysts last week: “Our share is doing beautifully in the US. We have taken share from Wrigley for the past five months.”

British sales of chewing gum are reckoned to be worth about £400m a year. The UK market has been static recently, but worldwide sales of chewing gum are growing by nearly 9% a year — faster than the markets for chocolate and sugar sweets.

Stitzer is keen to divert attention from the poor performance of Cadbury’s UK chocolate business. The company was forced to withdraw millions of products in June after a leaking pipe at one of its plants infected seven product lines with salmonella. Nobody died as a result of the contamination, but 45 people, including babies and children, fell ill.

The company faced criticism for not having raised the alarm as soon as it detected traces of salmonella in its products five months before the product recall.

The scare cost an estimated £26m, of which Cadbury has already recouped £6m from insurers.

At tomorrow’s presentation, Stitzer is expected to drop the company’s target, set three years ago, of increasing profit margins by at least 0.5% annually. That ambition has been torpedoed by increasing costs.

And he will face questions about its balance sheet. Some investors want Cadbury to pledge to return cash to shareholders through an increased dividend or share buybacks.

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