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Kraft foods Definitive proxy statement for the cadbury deal

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  • 8/12/2015 DefinitiveProxyStatement

    http://www.sec.gov/Archives/edgar/data/1103982/000119312509255952/ddefm14a.htm#toc59199_4 1/91

    DEFM14A1ddefm14a.htmDEFINITIVEPROXYSTATEMENT

    TableofContents

    UNITEDSTATESSECURITIESANDEXCHANGECOMMISSION

    WASHINGTON,D.C.20549

    SCHEDULE14AProxyStatementPursuanttoSection14(a)oftheSecuritiesExchangeActof1934

    FiledbytheRegistrant

    FiledbyaPartyotherthantheRegistrant

    Checktheappropriatebox:

    PreliminaryProxyStatement Confidential,forUseoftheCommissionOnly(aspermittedbyRule14a6(e)(2))DefinitiveProxyStatement

    DefinitiveAdditionalMaterials SolicitingMaterialUnderRule14a12

    KRAFTFOODSINC.(NameofRegistrantasSpecifiedinitsCharter)

    (NameofPerson(s)FilingProxyStatement,ifOtherthantheRegistrant)

    PaymentofFilingFee(Checktheappropriatebox):

    Nofeerequired.

    FeecomputedontablebelowperExchangeActRules14a6(i)(1)and011.

    1. Titleofeachclassofsecuritiestowhichtransactionapplies:

    2. Aggregatenumberofsecuritiestowhichtransactionapplies:

    3. PerunitpriceorotherunderlyingvalueoftransactioncomputedpursuanttoExchangeActRule011(Setforththeamountonwhichthefilingfeeiscalculatedandstatehowitwasdetermined):

    4. Proposedmaximumaggregatevalueoftransaction:

    5. Totalfeepaid:

    Feepaidpreviouslywithpreliminarymaterials.

    CheckboxifanypartofthefeeisoffsetasprovidedbyExchangeActRule011(a)(2)andidentifythefilingforwhichtheoffsettingfeewaspaidpreviously.Identifythepreviousfilingbyregistrationstatementnumber,ortheFormorScheduleandthedateofitsfiling.

    1. Amountpreviouslypaid:

    2. Form,ScheduleorRegistrationStatementNo.:

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    3. Filingparty:

    4. Datefiled:

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    IRENEB.ROSENFELDCHAIRMANOFTHEBOARDANDCHIEFEXECUTIVEOFFICER

    THREELAKESDRIVENORTHFIELD,ILLINOIS60093

    December18,2009

    DearFellowShareholder:

    YouarecordiallyinvitedtoattendaSpecialMeetingofShareholdersofKraftFoodsInc.WewillholdtheSpecialMeetingat9:00a.m.CSTonMonday,February1,2010,attheHiltonChicago/NorthbrookHotelinNorthbrook,Illinois.RegistrationattheHiltonChicago/NorthbrookHotelwillopenat8:00a.m.CST.

    AttheSpecialMeeting,youwillbeaskedtovoteonaproposaltoapproveKraftFoodsissuingupto370millionsharesofourClassAcommonstockinconnectionwithourproposedacquisitionofCadburyplc.WemayusethesesharestoacquirealloftheoutstandingCadburysharecapitalfromCadburyshareholders,tofinancetheCadburyacquisitionorforanyotherpurposesrelatedtotheproposedacquisition.YouwillalsobeaskedtovoteonaproposaltoapproveanyadjournmentoftheSpecialMeeting,including,ifnecessary,tosolicitadditionalproxiesinfavoroftheshareissuanceproposaliftherearenotsufficientvotesforthatproposal.

    OnDecember4,2009,wemadeanoffertoacquirealloftheoutstandingCadburyordinaryshares,includingthoserepresentedbyAmericanDepositaryShares(ADSs).Inthistransaction,wewillissueupto370millionsharesofourcommonstockandpayuptoapproximately4.3billionincashintheaggregateinexchangefortheCadburyordinaryshares,includingthoserepresentedbyCadburyADSs.

    Inapprovingthenewsharesissuance,youareapprovinguseofthesharesinconnectionwiththeproposedCadburyacquisition,regardlessoftheformoforproceduresfortheacquisition,andanyrelatedfinancingtransaction.

    TheBoardhasunanimouslydeterminedthatissuingsharesofourcommonstockinconnectionwiththeproposedacquisitionofCadbury,includinganyrelatedfinancingtransaction,isinthebestinterestofKraftFoodsanditsshareholders.TheBoardunanimouslyrecommendsthatyouvotefortheshareissuanceproposalandtheadjournmentproposal.

    OnlyshareholdersofrecordatthecloseofbusinessonDecember14,2009areentitledtovoteattheSpecialMeetingoranyadjournmentsorpostponementsoftheSpecialMeeting.

    YoumayvoteyoursharesviatheInternetorbycallingatollfreenumber.Ifyoureceivedapapercopyoftheproxycardorvotinginstructionformbymail,youmaysign,dateandmailyourproperlyexecutedproxycardorvotinginstructionform.OryoumayvoteinpersonattheSpecialMeeting.WeincludeinstructionsabouteachoptionintheattachedProxyStatementandontheenclosedproxycardorvotinginstructionform.Yourvoteisimportanttous.WhetherornotyouplantoattendtheSpecialMeeting,Iencourageyoutovotepromptly.

    PleaseregisterinadvanceifyouwouldliketoattendtheSpecialMeeting.ThepreregistrationdirectionsareprovidedintheattachedProxyStatement.

    OnbehalfoftheBoard,thankyouforyourcontinuedinterestandsupport.

    Sincerely,

    IreneB.RosenfeldChairmanoftheBoardandChiefExecutiveOfficer

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    IMPORTANTNOTICEREGARDINGTHEAVAILABILITYOFPROXYMATERIALSFORTHESPECIALMEETINGOFSHAREHOLDERS

    KraftFoodsInc.sSpecialMeetingProxyStatementandFormofProxyareavailableatwww.kraftfoodscompany.com

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    KRAFTFOODSINC.ThreeLakesDrive

    Northfield,Illinois60093

    NOTICEOFSPECIALMEETINGOFSHAREHOLDERS

    OFKRAFTFOODSINC.

    TIMEANDDATE: 9:00a.m.CSTonMonday,February1,2010.

    PLACE:

    HiltonChicago/NorthbrookHotel2855N.MilwaukeeAve.Northbrook,IL60062

    ITEMSOFBUSINESS:

    (1)Tovoteonaproposaltoapproveissuingupto370millionsharesofKraftFoodsInc.ClassAcommonstockinconnectionwithourproposedacquisitionofCadburyplc,includinganyissuanceofsharesofKraftFoodsInc.ClassAcommonstocktofinancetheproposedacquisition.

    (2)TovoteonaproposaltoapproveanyadjournmentoftheSpecial

    Meeting,including,ifnecessary,tosolicitadditionalproxiesinfavorofItem1iftherearenotsufficientvotesforsuchproposal.

    (3)TotransactotherbusinessproperlypresentedattheSpecial

    Meeting.

    BOARDRECOMMENDATION:

    TheBoardhasunanimouslydeterminedthatissuingsharesofourcommonstockinconnectionwiththeproposedacquisitionofCadbury,includinganyrelatedfinancingtransaction,isinthebestinterestofKraftFoodsanditsshareholders.TheBoardrecommendsthatshareholdersvoteforItems1and2.

    WHOMAYVOTE: ShareholdersofrecordatthecloseofbusinessonDecember14,2009.

    DATEOFDISTRIBUTION: WearemailingtheProxyStatementonornearDecember21,2009.

    MATERIALSAVAILABLEONOURWEBSITE:

    ThisNoticeofSpecialMeetingandtheProxyStatementareavailableatwww.kraftfoodscompany.com.Informationincludedonourwebsite,otherthanthesematerials,isnotpartoftheproxysolicitingmaterials.

    CarolJ.WardVicePresidentandCorporateSecretary

    December18,2009

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    TABLEOFCONTENTS PageQUESTIONSANDANSWERSABOUTTHESPECIALMEETINGANDVOTING 1

    SUMMARY 8TheCompanies 8TheOffer 8PossibleEquityFinancing 9RecommendationofourBoard 9ConditionsoftheOffer 10InterestsofKraftFoodsandOurExecutiveOfficersandDirectorsintheShareIssuance 10AccountingTreatment 10RegulatoryApprovals 10RiskFactors 10

    NOTEONCADBURYINFORMATION 11

    CURRENCIES 12

    EXCHANGERATEINFORMATION 13

    FORWARDLOOKINGSTATEMENTS 14

    SELECTEDHISTORICALCONSOLIDATEDFINANCIALDATAOFKRAFTFOODS 15

    SELECTEDHISTORICALCONSOLIDATEDFINANCIALDATAOFCADBURY 17

    SELECTEDUNAUDITEDPROFORMACOMBINEDFINANCIALDATA 19

    HISTORICALANDPROFORMAPERSHAREDATA 21

    COMPARATIVEMARKETPRICEANDDIVIDENDINFORMATION 23

    RISKFACTORS 25RiskFactorsRelatingtotheProposedCadburyAcquisitionandtheOffer 25RiskFactorsRelatingtoOurBusinessandtheBusinessoftheCombinedCompany 28RiskFactorsRelatingtoCadburysBusiness 34

    THESPECIALMEETING 35Time,Date,PlaceandPurpose 35RecordDateandSharesEntitledtoVote 35VotingProcedures 35Quorum 36VoteRequired 36ProxySolicitation 36ChangeofVoteandRevocationofProxies 37KraftFoodsAuditors 37

    ITEM1ISSUANCEOFSHARESOFOURCOMMONSTOCKINCONNECTIONWITHOURPROPOSEDACQUISITIONOFCADBURY 38

    General 38EffectofShareholderApproval 39RegistrationStatement 39PreemptiveRights 40Appraisal/DissentersRights 40RecommendationoftheBoard 40ReasonsfortheCadburyAcquisitionandShareIssuance 40TimingoftheCadburyAcquisition 41

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    TABLEOFCONTENTS(Continued)

    PageITEM2ADJOURNMENTOFTHESPECIALMEETING 42

    THECOMPANIES 43KraftFoods 43Cadbury 44

    BACKGROUNDOFTHEPROPOSEDCADBURYACQUISITION 45

    THEOFFER 52TermsoftheOffer 52ConditionsoftheOffer 52AccountingTreatment 53OwnershipofKraftFoodsAfterCompletionoftheCadburyAcquisition 54FederalIncomeTaxConsequencesoftheShareIssuance 54RegulatoryApprovals 55FinancingoftheCadburyAcquisition 56

    CERTAINRELATIONSHIPSWITHCADBURYANDINTERESTSOFOURDIRECTORSANDEXECUTIVEOFFICERSINTHESHAREISSUANCE 57

    OWNERSHIPOFEQUITYSECURITIES 58

    UNAUDITEDU.S.GAAPPROFORMAFINANCIALINFORMATION 60

    SUMMARYOFSIGNIFICANTDIFFERENCESBETWEENIFRSANDU.S.GAAP 72

    WHEREYOUCANFINDMOREINFORMATION 75

    INCORPORATIONBYREFERENCE 76

    SHAREHOLDERPROPOSALSFORTHE2010ANNUALMEETINGOFSHAREHOLDERS 78

    OTHERMATTERS 78

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    KRAFTFOODSINC.ThreeLakesDrive

    Northfield,Illinois60093

    PROXYSTATEMENT

    FORSPECIALMEETINGOFSHAREHOLDERS

    TOBEHELDONFEBRUARY1,2010

    QUESTIONSANDANSWERSABOUT

    THESPECIALMEETINGANDVOTING

    Thefollowingaresomeofthequestions,andanswerstothosequestions,thatyou,asashareholderofKraftFoodsInc.(KraftFoods),mayhaveregardingKraftFoodsproposedacquisitionofCadburyplc(Cadbury)andthemattersbeingconsideredatthespecialmeetingofshareholderstowhichthisProxyStatementrelates.Theinformationinthissectiondoesnotprovidealloftheinformationthatmaybeimportanttoyouwithrespecttothemattersbeingconsideredatthemeeting.Therefore,youshouldreadthisProxyStatementcarefully,aswellasthefullcontentsoftheotherdocumentstowhichthisProxyStatementrefersorincorporatesbyreference.Thesedocumentscontaininformationthatmaybeimportanttoyouindetermininghowyouwillvoteonthematterstobeconsideredatthespecialmeeting.

    ReferencesinthisProxyStatementtowe,usandourrefertoKraftFoodsand,whereapplicable,itssubsidiaries.1. WhenandwhereistheSpecialMeeting?

    KraftFoodswillholdaSpecialMeetingofShareholdersonMonday,February1,2010,at9:00a.m.CSTattheHiltonChicago/NorthbrookHotelinNorthbrook,Illinois.RegistrationattheHiltonChicago/NorthbrookHotelwillopenat8:00a.m.CST.DirectionstotheHiltonChicago/NorthbrookHotelareincludedattheendofthisProxyStatement.2. WhyamIreceivingtheseproxymaterials?

    WeareprovidingyouwiththeseproxymaterialsinconnectionwithourBoardssolicitationofproxiestobevotedatourSpecialMeetingofShareholderstobeheldonMonday,February1,2010oranyadjournmentsorpostponementsofthemeeting(theSpecialMeeting).ThesematerialsdescribethevotingproceduresandthematterstobevotedonattheSpecialMeeting.3. WhatamIbeingaskedtovoteon?

    YouarebeingaskedtoconsiderandvoteonaproposaltoapproveKraftFoodsissuingupto370millionsharesofourClassAcommonstock,whichwerefertoasourcommonstock,inconnectionwithourproposedacquisitionofCadbury,whichwerefertoastheCadburyacquisition,includinganyissuanceofsharesofourcommonstocktofinancetheCadburyacquisition.

    YouarealsobeingaskedtoconsiderandvoteonaproposaltoapproveanyadjournmentoftheSpecialMeeting,including,ifnecessary,tosolicitadditionalproxiesinfavoroftheshareissuanceproposaliftherearenotsufficientvotesforthatproposal.

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    4. Whyisshareholderapprovaloftheshareissuancerequired?

    OnDecember4,2009,wemadeanoffertoacquireeachoutstandingCadburyordinaryshare,includingeachsharerepresentedbyCadburyAmericanDepositaryShares(ADSs),inexchangefor0.2589sharesofourcommonstockand300penceincash.AsoneCadburyADSrepresentsfourCadburyordinaryshares,holdersofCadburyADSswillbeentitledtoreceive1.0356sharesofourcommonstockand1,200penceincashforeachCadburyADStheytenderintheoffer.

    BaseduponpubliclyavailableinformationasofDecember15,2009,ifweacquire,onthefinancialtermsdescribedinthisProxyStatement,100%oftheoutstandingCadburyordinaryshares,includingthoserepresentedbyCadburyADSs,andassumingalloutstandingoptionstoacquireCadburyordinarysharesandothershareawards(asatDecember9,2009)areexercised,weexpecttoissueupto370millionsharesofourcommonstock.Becausethisnumberwillbegreaterthan20%ofthetotalnumberofsharesofourcommonstockoutstandingpriortotheissuance,wearerequiredtoobtainshareholderapprovalforissuingthesesharesunderthelistingrequirementsoftheNewYorkStockExchange(NYSE).

    ItisalsopossiblethatwemaydecidetoissuecommonstockorsecuritiesconvertibleintocommonstockinapublicorprivateofferingtofinancetheCadburyacquisition.UnderNYSErules,suchissuancemightbeconsideredpartoftheCadburyacquisitionforthepurposeofthe20%thresholddescribedabove.

    YourapprovaloftheshareissuanceproposalwillconstituteapprovaloftheshareissuanceinconnectionwiththeCadburyacquisition,includinganyrelatedfinancingtransaction,regardlessoftheformof,proceduresfororfinaltermsoftheacquisitionorfinancing.ShareholdersarenotbeingaskedtovoteontheCadburyacquisitionandnovoteofKraftFoodsshareholdersisrequiredonthatmatter.

    Ifwedecidetomakeanyrelatedpublicorprivateofferingofourcommonstock,orifanytermoftheCadburyacquisitiondescribedinthisProxyStatementchanges,ineachcaseinamannerthatwebelieveismaterialtoourshareholders,wewillsupplementthisProxyStatementtoinformyouofthechangeand,iflegallyrequired,resolicitproxiesfromourshareholders.5. HowwillKraftFoodseffecttheproposedacquisitionofCadbury?

    WehavemadeanoffertoacquirealloftheoutstandingCadburyordinaryshares,includingthoserepresentedbyCadburyADSs,directlyfromtheCadburyshareholders.TheCadburyBoardhasrecommendedthatCadburyshareholdersrejectthisoffer.However,iftheCadburyBoardlaterdecidestorecommendouroffer,itispossiblethatwewillagreewithCadburytoacquirealloftheoutstandingsharecapitalofCadburythroughaU.K.schemeofarrangement,whichisacourtapprovedacquisitionvotedonbyCadburyshareholders.Theshareissuanceproposalgivesustheflexibilitytomakethischangewithoutanothershareholdervote.6. Whatwillbetheeffectoftheshareissuance?

    Weestimatethat,ifweissuedall370millionofthesharesweareseekingapprovaltoissue,existingKraftFoodsshareholderswouldownapproximately80%ofthesharesofourcommonstockoutstandingimmediatelyaftertheCadburyacquisition,includinganyrelatedequityfinancing,iscompleted.Foradiscussionoftheassumptionsonwhichwebasedthisestimate,pleaseseethesectionofthisProxyStatemententitledTheOfferOwnershipofKraftFoodsAfterCompletionoftheCadburyAcquisition.7. WhenisthisProxyStatementbeingmailed?

    WearemailingthisProxyStatementandtheproxycardtoourshareholdersonornearDecember21,2009.Wealsoprovidethesematerialsonourwebsiteatwww.kraftfoodscompany.com.

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    8. WhoisentitledtovoteattheSpecialMeeting?

    OurBoardestablishedDecember14,2009astherecorddate(theRecordDate)fortheSpecialMeeting.OnlyshareholdersofrecordowningourcommonstockatthecloseofbusinessontheRecordDateareentitledto(a)receivenoticeoftheSpecialMeeting,(b)attendtheSpecialMeetingand(c)voteonallmattersthatproperlycomebeforetheSpecialMeeting.

    AtthecloseofbusinessontheRecordDate,1,477,239,577sharesofourcommonstockwereoutstandingandentitledtovote.EachshareisentitledtoonevoteoneachmattertobevoteduponattheSpecialMeeting.9. Whatisthequorumrequirement?

    AquorumofshareholdersisnecessarytovalidlyholdtheSpecialMeeting.AquorumwillbepresentifamajorityoftheoutstandingsharesofourcommonstockontheRecordDatearerepresentedattheSpecialMeeting,eitherinpersonorbyproxy.Yourshareswillbecountedforpurposesofdeterminingaquorumifyouvote: ViatheInternet Bytelephone Bysubmittingaproperlyexecutedproxycardorvotinginstructionformbymailor InpersonattheSpecialMeeting.

    AbstentionswillbecountedfordeterminingwhetheraquorumispresentfortheSpecialMeeting.10. Whatvoteisneededtoapprovetheshareissuanceproposal?

    UnderNYSErules,theapprovaloftheshareissuanceproposalrequiresanaffirmativevoteofthemajorityofthevotescastontheproposal,providedthatthetotalvotescastontheproposalrepresentover50%ofthetotaloutstandingsharesofourcommonstock(theOutstandingVotes).VotesFORandAGAINSTandabstentionscountasvotescast(theNYSEVotesCast).TheNYSEVotesCastmustbegreaterthan50%ofthetotalOutstandingVotes.BecausethenumberofvotesFORtheproposalmustbegreaterthan50%oftheNYSEVotesCast,abstentionshavethesameeffectasavoteAGAINSTtheproposal.

    ApprovaloftheadjournmentproposalrequiresthatthenumberofvotescastFORexceedthenumberofvotescastAGAINST,whetherornotaquorumispresent.AbstentionsarenotconsideredasvotingFORorAGAINSTtheadjournmentproposalandwillhavenoeffectontheoutcomeoftheadjournmentproposal.11. Whathappensiftheshareissuanceproposalisnotapproved?

    Iftheshareissuanceproposalisnotapproved,wewillnotbeabletoissueintheCadburyacquisitionanumberofsharesofourcommonstockthatisequalto20%ormoreofthetotalnumberofsharesofourcommonstockoutstandingpriortotheissuance.12. WhatothermattersmayariseattheSpecialMeeting?

    OtherthanItems1and2describedinthisProxyStatement,wedonotexpectanyothermatterstobepresentedforavoteattheSpecialMeeting.IfanyothermatterisproperlybroughtbeforetheSpecialMeeting,yourproxygivesauthoritytotheproxiesdescribedthereintovoteonsuchmattersintheirdiscretion.

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    13. Whatisthedifferencebetweenholdingsharesasaregisteredshareholderandholdingsharesinstreetname?

    Ifyoursharesareowneddirectlyinyournamewithourtransferagent,WellsFargoBank,N.A.,youareconsideredaregisteredshareholderofthoseshares.

    Ifyoursharesareheldinabrokerageaccountorbyabankorothernominee,youholdthosesharesinstreetname.14. HowdoIvotemyshares?

    Ifyouarearegisteredshareholder,youmayvote:

    ViatheInternetatwww.eproxy.com/kft.TheInternetvotingsystemwillbeavailable24hoursadayuntil

    11:59p.m.CSTonSunday,January31,2010

    Bytelephone,ifyouarelocatedwithintheU.S.orCanada.Call18005601965(tollfree)fromatouchtone

    telephone.Thetelephonevotingsystemwillbeavailable24hoursadayuntil11:59p.m.CSTonSunday,January31,2010

    Byreturningaproperlyexecutedproxycard.Yourproxycardmustbereceivedbeforethepollscloseatthe

    SpecialMeetingonMonday,February1,2010or

    InpersonattheSpecialMeeting.PleasepreregistertoattendtheSpecialMeetingbyfollowingthepre

    registrationdirectionsdescribedbelow.

    Ifyouholdyoursharesinstreetname,youmayvote:

    ViatheInternetatwww.proxyvote.com(a12digitcontrolnumberisrequired),bytelephoneorbyreturninga

    properlyexecutedvotinginstructionformbymail,dependinguponthemethod(s)yourbroker,bankorothernomineemakesavailableor

    InpersonattheSpecialMeeting.Todoso,youmustrequestalegalproxyfromyourbrokerorbankand

    presentitattheSpecialMeeting.PleasepreregistertoattendtheSpecialMeetingbyfollowingthepreregistrationdirectionsdescribedinQuestion26.

    15. Iamacurrent/formerKraftFoodsemployeeandhaveinvestmentsintheKraftFoodsStockFund(s)ofthe

    KraftFoodsInc.Thrift/TIP401(k)Plan(s)and/ortheKraftFoodsCanadaOptionalPensionPlan(s)/EmployeeSavingsPlan.CanIvote?Ifso,howdoIvote?

    Yes,youareentitledtovote.Forvotingpurposes,yourproxycardincludesallsharesallocatedtoyourKraftFoodsStockFundaccount(s),sharesyoumayholdatourtransferagentasaregisteredshareholder,andanysharesofrestrictedstockyoumayhold.Whenyousubmityourproxy,youaredirectingtheplan(s)trustee(s)howtovotethesharesallocatedtoyourKraftFoodsStockFundaccount(s)inadditiontodirectingthevotingofallothersharesincludedonyourproxycard.

    Inordertodirecttheplan(s)trustee(s)howtovotethesharesheldinyourKraftFoodsStockFundaccount(s),youmustvotethesharesby11:59p.m.CSTonWednesday,January27,2010.Ifyourvotinginstructionsarenotreceivedbythattime,thetrustee(s)willvotethesharesallocatedtoyouraccount(s)inthesameproportionastherespectiveplansharesforwhichvotinginstructionshavebeenreceived,unlesscontrarytotheEmployeeRetirementIncomeSecurityActof1974(ERISA).Pleasefollowtheinstructionsforregisteredshareholdersdescribedabovetocastyourvote.AlthoughyoumayattendtheSpecialMeeting,youmaynotvotesharesheldinyourKraftFoodsStockFundaccount(s)atthemeeting.

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    16. Iamacurrent/formerKraftFoodsemployeeandholdrestrictedstock.CanIvotemyrestrictedstockholding?Ifso,howdoIvotethoseshares?

    Yes.Ifyouholdsharesofrestrictedstock,youshouldfollowtheinstructionsforregisteredshareholdersdescribedinQuestion14tovoteyourshares.Ifyoudonotvoteyourshares,theywillnotbevoted,sopleasevoteyourshares.Forvotingpurposes,yourproxycardincludesyoursharesofrestrictedstock,sharesyoumayholdinaKraftFoodsStockFundaccount(s),andanysharesyoumayholdatourtransferagentasaregisteredshareholder.17. HowdoIvoteifIparticipateinKraftFoodsDirectPurchasePlan?

    IfyouholdsharesintheDirectPurchasePlan,youshouldfollowtheinstructionsforregisteredshareholdersdescribedinQuestion14tovoteyourshares.Whenyouvotethoseshares,youwillbevotingallthesharesyouholdatourtransferagentasaregisteredshareholder.Ifyoudonotvoteyourshares,theywillnotbevoted,sopleasevoteyourshares.18. MayIchangemyvote?

    Yes.IfyouarearegisteredshareholderandwouldliketochangeyourvoteaftersubmittingyourproxybutpriortotheSpecialMeeting,youmaydosoby(a)signingandsubmittinganotherproxywithalaterdate,(b)votingagainbytelephoneortheInternetor(c)votinginpersonattheSpecialMeeting.Alternatively,ifyouwouldliketorevokeyourproxy,youmaysubmitawrittenrevocationofyourproxytoourCorporateSecretaryatKraftFoodsInc.,ThreeLakesDrive,Northfield,Illinois60093.

    Ifyoursharesareheldinstreetname,pleasecontactyourbank,brokerorothernomineeforspecificinstructionsonhowtochangeorrevokeyourvote.PleaserefertoQuestion14foradditionaldetailsaboutvotingyoursharesheldinstreetname.19. Howaremysharesvotedbytheproxies?

    Thepersonsnamedasproxiesontheproxycardmustvoteyoursharesasyouhaveinstructed.IfyoudonotgiveaspecificinstructiononanyproposalscheduledforvoteattheSpecialMeetingbutyouhaveauthorizedtheproxiesgenerallytovote,theywillvoteforeachproposalinaccordancewiththeBoardsrecommendationoneachmatter.Yourauthorizationwouldexist,forexample,ifyoumerelysign,dateandreturnyourproxycard.20. WillmysharesbevotedifIdonotprovidemyproxy?

    Ifyouarearegisteredshareholderorifyouholdrestrictedstock,yourshareswillnotbevotedunlessyouvoteasinstructedinQuestion14,sopleasevoteyourshares.

    Ifyouholdyoursharesinstreetname,underNYSErules,yourbrokeragefirmmaynotvoteonyourbehalfonnonroutinemattersifyoudonotfurnishvotinginstructions.FortheSpecialMeeting,theapprovaloftheshareissuanceproposalandtheadjournmentproposalareconsiderednonroutinematters.Asaresult,ifyouholdsharesofourcommonstockinstreetnameanddonotprovidevotinginstructionstoyourbroker,yourshareswillnotbevotedontheseproposals,sopleasevoteyourshares.

    Inaddition,ifyouareacurrentorformeremployeeandhadinvestmentsintheKraftFoodsStockFund(s)oftheKraftFoodsInc.Thrift/TIP401(k)Plan(s)and/ortheKraftFoodsCanadaOptionalPensionPlan(s)/EmployeeSavingsPlanontheRecordDate,youcandirecttheplan(s)trustee(s)howtovotethesharesallocatedtoyouraccount(s).Ifyourvotinginstructionsarenotreceivedby11:59p.m.CSTonWednesday,January27,2010,thetrustee(s)willvotethesharesallocatedtoyouraccount(s)inthesameproportionastherespectiveplansharesforwhichvotinginstructionshavebeenreceived.PleaserefertoQuestion15foradditionaldetailsaboutvotingsharesheldintheKraftFoodsStockFund(s).

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    21. IsitsafetovoteviatheInternetortelephone?

    Yes.TheInternetandtelephonevotingproceduresweredesignedtoauthenticateshareholdersidentitiesandtoconfirmthattheirinstructionshavebeenproperlyrecorded.22. WhowillbearthecostofsolicitingvotesfortheSpecialMeeting?

    Webearthecostofsolicitingyourvote.Inadditiontomailingtheseproxymaterials,ourdirectors,officersoremployeesmaysolicitproxiesorvotesinperson,bytelephoneorbyelectroniccommunication.Theywillnotreceiveanyadditionalcompensationforthesesolicitationactivities.

    Wewillenlistthehelpofbanksandbrokeragefirmsinsolicitingproxiesfromtheircustomersandreimbursethebanksandbrokeragefirmsforrelatedoutofpocketexpenses.

    WeretainedGeorgesonInc.toaidinsolicitingvotesfortheSpecialMeetingforatotalfeeof$75,000plusreasonableexpenses.23. Whatishouseholding?

    Unlessyouadvisedusotherwise,ifyouholdyoursharesinstreetnameandyouandotherresidentsatyourmailingaddresssharethesamelastnameandownsharesofourcommonstockinanaccountatthesamebrokeragefirmorbank,wedeliveredasinglesetofproxymaterialstoyouraddress.Thismethodofdeliveryisknownashouseholding.Householdingreducesthenumberofmailingsyoureceive,aswellasourprintingandpostagecosts.Shareholderswhoparticipateinhouseholdingwillcontinuetoreceiveseparatevotinginstructionforms.Ifyouwouldliketooptoutofhouseholding,pleasecontactyourbrokerorbank.

    Ifyouarearegisteredshareholder,wesentyouandeachregisteredshareholderatyouraddressseparatesetsofproxymaterials.24. Aremyvotesconfidential?

    Yes.Yourvoteswillnotbedisclosedtoourdirectors,officersoremployees,except(a)asnecessarytomeetapplicablelegalrequirementsandtoassertordefendclaimsfororagainstus,(b)inthecaseofacontestedproxysolicitation,(c)ifyouprovideacommentwithyourproxyorotherwisecommunicateyourvotetousor(d)asnecessarytoallowtheindependentinspectorofelectiontocertifytheresults.25. Whocountsthevotes?

    WellsFargoBank,N.A.willreceiveandtabulatetheproxies.IVSAssociates,Inc.willactastheindependentinspectorofelectionandwillcertifytheresults.26. WhatdoIneedtodoifIwouldliketoattendtheSpecialMeeting?

    IfyouwouldliketoattendtheSpecialMeeting,pleasepreregisterby11:59p.m.CSTonJanuary29,2010.Duetospacelimitations,youmaybringonlyoneguest.Ifyouwishtobringaguest,youmustindicatethatwhenyoupreregister.Youandyourguest,ifany,mustpresentvalidgovernmentissuedphotographicidentification,suchasadriverslicense,tobeadmittedintotheSpecialMeeting.

    Ifyouarearegisteredshareholder,pleaseindicatethatyouintendtoattendtheSpecialMeetingby: Checkingtheappropriatebox(es)ontheInternetvotingsite Followingthepromptsonthetelephonevotingsiteor

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    Checkingtheappropriatebox(es)onyourproxycard.

    Ifyouholdyoursharesinstreetname,pleasenotifyusinwritingthatyouwillattendandwhetheryouintendtobringaguest.Inthiswrittennotification,pleaseincludeaproofofownershipofourcommonstock(suchasaletterfromyourbankorbroker,aphotocopyofyourcurrentaccountstatementoracopyofyourvotinginstructionform)pleasealsoprovideawayforustoreachyouifthereisaproblemwithyournotification.Sendyournotificationasfollows:

    Bymail: Byfax: Byemail:

    KraftFoodsInc.c/oGeorgesonInc.Attention:ChristopherCinek199WaterStreet,26thFloorNewYork,NY10038

    (877)2600406(tollfreewithintheU.S.)(212)4409009(fromoutsidetheU.S.)Attention:ChristopherCinek

    [email protected]

    Foryourcomfort,securityandsafety,wewillnotallowanylargebags,briefcases,packagesorbackpacksintotheSpecialMeetingsite.Allbagswillbesubjecttosearch.WealsowillnotallowelectronicdevicesintotheSpecialMeeting.Theseinclude,butarenotlimitedto,cellularanddigitalphones,cameras,audioandvideorecorders,laptopsandpagers.Wewelcomeassistanceanimalsforthedisabled,butdonotallowpets.27. WillIhavedissentersrightsifIdonotsupporttheissuanceofsharesinconnectionwiththeproposed

    Cadburyacquisition?

    No.KraftFoodsshareholderswillnotbeentitledtoappraisalorsimilardissentersrightsinconnectionwiththeshareissuanceproposalortheCadburyacquisition.28. WherecanIfindmoreinformationonKraftFoodsandCadbury?

    YoucanfindmoreinformationaboutKraftFoodsandCadburyfromvarioussourcesdescribedunderWhereYouCanFindMoreInformationonpage75ofthisProxyStatement.29. WhocanItalktoifIhavequestionsabouttheSpecialMeetingortheproposalstobevotedon?

    YoucancallGeorgesonInc.tollfreeat18005091312,MondaythroughFridaybetweenthehoursof8:00a.m.and10:00p.m.CSTwithanyquestions.

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    SUMMARY

    BelowisasummaryofthetermsofouroffertoacquirealloutstandingCadburyordinaryshares,includingthoserepresentedbyCadburyADSs.ThissummaryhighlightsselectedinformationfromthisProxyStatement,andmaynotcontainalloftheinformationthatisimportanttoyou.TobetterunderstandtheCadburyacquisitionortheofferdescribedbelow,youshouldreadthisentireProxyStatementcarefully,aswellasthoseadditionaldocumentstowhichwereferyou.YoumayobtaintheinformationincorporatedbyreferenceintothisProxyStatementbyfollowingtheinstructionssetforthinIncorporationbyReferenceonpage76ofthisProxyStatement.

    TheCompanies(Seepage43)

    KraftFoods

    KraftFoodsistheworldssecondlargestfoodcompany,withrevenuesof$41.9billionandearningsfromcontinuingoperationsbeforeincometaxesof$2.6billionin2008.KraftFoodshasapproximately100,000employeesworldwideandmanufacturesandmarketspackagedfoodproducts,includingsnacks,beverages,cheese,convenientmealsandvariouspackagedgroceryproducts.KraftFoodssellsitsproductstoconsumersinapproximately150countries.AtDecember31,2008,KraftFoodshadoperationsinmorethan70countriesandmadeitsproductsat168manufacturingandprocessingfacilitiesworldwide.AtSeptember30,2009,KraftFoodshadnetassetsof$25.2billionandgrossassetsof$66.7billion.KraftFoodsisamemberoftheDowJonesIndustrialAverage,theStandard&Poors500,theDowJonesSustainabilityIndexandtheEthibelSustainabilityIndex.

    KraftFoodsisaVirginiacorporationwithprincipalexecutiveofficesatThreeLakesDrive,Northfield,IL60093.Ourtelephonenumberis(847)6462000andourInternetaddressiswww.kraftfoodscompany.com.

    Cadbury

    Cadburyisaninternationalconfectionerybusinessthatgenerated5.4billionintotalrevenuefromitsglobaloperationsin2008.AtDecember31,2008,Cadburyoperatedinover60countriesandhadover45,000employees.Cadburysprincipalproductsegmentsare:chocolate,whichcontributed46%ofCadburysrevenuein2008gum,whichcontributed33%ofCadburysrevenuein2008andcandy,whichcontributed21%ofCadburysrevenuein2008(ineachcase,excludingtherevenuesofReadingScientificServicesLimited).

    CadburyisregisteredunderthelawsofEnglandandWalesasapubliclimitedcompanywithitsregisteredoffice(principalexecutiveoffice)atCadburyHouse,SandersonRoad,Uxbridge,England,UB81DH.Itstelephonenumberis+441895615000anditsInternetaddressiswww.cadbury.com.InformationcontainedonCadburyswebsitedoesnotconstituteapartofthisProxyStatement.

    TheOffer(Seepage52)

    OnDecember4,2009,wemadeanoffertoacquireeachoutstandingCadburyordinaryshare,includingeachsharerepresentedbyaCadburyADS,inexchangefor0.2589sharesofourcommonstockand300penceincash.AsoneCadburyADSrepresentsfourCadburyordinaryshares,holdersofCadburyADSswillbeentitledtoreceive1.0356sharesofourcommonstockand1,200penceincashforeachCadburyADStheytenderintheoffer.WearemakingtheofferforalloutstandingCadburyordinaryshares,includingthoserepresentedbyCadburyADSs,asfollows:

    allholdersofCadburyordinaryshareswhoareU.S.holders(withinthemeaningofRule14d1(d)undertheSecuritiesExchangeActof1934(theExchangeAct))orresidentsofCanadaandallholdersofCadburyADSs,whereverlocated,arereceivingtheprospectus/offertoexchangeandrelatedtransmittalmaterialsthatwefiledwiththeSEConDecember4,2009aspartofaregistrationstatementonFormS4and

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    allholdersofCadburyordinaryshareswhoarenotU.S.holdersorresidentsofCanadaarereceivingother

    offerdocuments,

    ineachcaseif,pursuanttothelawandregulationsapplicabletosuchholders,theyarepermittedtoreceivetherelevantdocuments.InthisProxyStatement,werefertothesedocumentsastheDecember4offerdocuments.

    Basedonanexchangerateof$1.6263to1.00(asquotedbyWM/ReutersonDecember15,2009),ifthecashportionoftheconsiderationpayableintheofferwereconvertedintoU.S.dollarsonDecember15,2009,thevalueofthecashconsiderationwouldequal$4.88perCadburyordinaryshareand$19.52perCadburyADS.ThevalueofthisconsiderationinU.S.dollartermswillvarydependingontheexchangeratebetweenU.S.dollarsandpoundssterling,whichisexpectedtofluctuate.Formoreinformationonhistoricalcurrencyexchangerates,pleaseseethesectionofthisProxyStatemententitledExchangeRateInformation.

    TheCadburyBoardhasrecommendedthatCadburyshareholdersrejectouroffer.However,iftheCadburyBoardlaterdecidestorecommendouroffer,itispossiblethatwewillagreewithCadburytoacquirealloftheoutstandingsharecapitalofCadburythroughaU.K.schemeofarrangementratherthanadirectoffertotheCadburyshareholders.Theshareissuanceproposalgivesustheflexibilitytomakethischangewithoutanothershareholdervote.

    PossibleEquityFinancing(Seepage39)

    Itispossiblethatwewilldecidetoissuecommonstock,orsecuritiesconvertibleintocommonstock,inapublicorprivateofferingtofinancetheCadburyacquisition.UnderNYSErules,anysuchissuancemaybeconsideredpartoftheCadburyacquisitionforthepurposeoftheNYSEshareholderapprovalrequirementdescribedinQuestion4underQuestionsandAnswersAbouttheSpecialMeetingandVoting.Yourapprovaloftheshareissuanceproposalwillconstituteapprovaloftheuseofsharesforsuchafinancing.

    RecommendationofourBoard(Seepage40)

    OurBoardhasunanimouslydeterminedthatissuingsharesofourcommonstockinconnectionwiththeproposedacquisitionofCadbury,includinganyrelatedfinancingtransaction,isinthebestinterestofKraftFoodsanditsshareholders.OurBoardunanimouslyrecommendsthatyouvotefortheshareissuanceproposalandfortheadjournmentproposal.Inreachingitsdecisiontorecommendtheshareissuanceproposal,ourBoardconsideredanumberoffactors,including: TheshareissuancewillfacilitatetheCadburyacquisition.

    WebelievethefinancialrationalefortheshareissuanceandtheCadburyacquisitioniscompellingandwillprovideshortandlongtermbenefitstoourshareholders.Additionally,webelievethattheCadburyacquisitionwillbeaccretivetoearnings,issupportedbyourbalancesheetandwilldeliverareturnoninvestmentinexcessofourcostofcapital.

    WebelievetheCadburyacquisitionwouldbuildonaglobalpowerhouseinsnacks,confectioneryandquick

    meals,withanexceptionalportfolioofleadingbrandsaroundtheworld.

    WebelievetheCadburyacquisitionwouldcreateacombinedcompanythatwillbeaglobalconfectionery

    leader. WebelievethatCadburysleadingbrandsarehighlycomplementarytoourportfolio.

    WebelievetheCadburyacquisitionwillallowustoactasastrongerpartnertoourcustomers,create

    efficienciesforbothpartnersandmaintainbalanceasourcustomersincreasetheirscale.

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    TheCadburyacquisitionwouldincreasescaleindevelopingmarketsforbothKraftFoodsandCadbury.

    WebelievethatCadburysroutestomarketarehighlycomplementarytooursandthattheCadbury

    acquisitionwillprovideanenhancedplatformforthecombinedcompanytodistributebothCadburysandKraftFoodsproducts.

    WebelievetheCadburyacquisitionwillprovidethepotentialformeaningfulrevenuesynergiesanda

    significantopportunitytorealizecostsavingsovertime.

    ConditionsoftheOffer(Seepage52)

    Inadditiontoshareholderapprovaloftheshareissuanceproposal,theofferforCadburyordinaryshares,includingthoserepresentedbyCadburyADSs,issubjecttoanumberofconditions.Wemaywaive,inwholeorinpart,manyoftheseconditionspriortotheexpirationoftheoffer.

    InterestsofKraftFoodsandOurExecutiveOfficersandDirectorsintheShareIssuance(Seepage57)

    NeitherKraftFoodsnoranyofourexecutiveofficersordirectorsbeneficiallyownanyCadburyordinarysharesorCadburyADSs.

    AccountingTreatment(Seepage53)

    InaccordancewithaccountingprinciplesgenerallyacceptedintheUnitedStates(U.S.GAAP),wewillaccountfortheCadburyacquisitionusingtheacquisitionmethodofaccountingforbusinesscombinations.

    RegulatoryApprovals(Seepage55)

    TheofferforCadburyordinaryshares,includingthoserepresentedbyCadburyADSs,is,andanyrelatedequityfinancingmaybe,conditionedon,amongotherthings,thereceiptofregulatoryapprovalsfromtheEuropeanCommissionandtheexpirationorterminationoftheapplicablewaitingperiodundertheHartScottRodinoAntitrustImprovementsActof1976(theHSRAct).OnDecember14,2009,therequiredwaitingperiodundertheHSRActexpired.

    RiskFactors(Seepage25)

    TheproposedCadburyacquisitioninvolvesseveralrisksthatyoushouldcarefullyconsiderwhendecidinghowtovoteattheSpecialMeeting.Forfurtherinformationregardingtheserisks,pleaseseethesectionofthisProxyStatemententitledRiskFactors.

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    NOTEONCADBURYINFORMATION

    Wehavetakenallinformation(otherthancertaininformationconcerningCadburyshareoptions)concerningCadbury,itsbusiness,managementandoperationspresentedorincorporatedbyreferenceinthisProxyStatementfrompubliclyavailableinformation.ThisinformationmaybeexaminedandcopiesmaybeobtainedattheplacesandinthemannersetforthinWhereYouCanFindMoreInformationonpage75ofthisProxyStatement.WearenotaffiliatedwithCadbury,andwehavenothadthecooperationofCadburysmanagementorduediligenceaccesstoCadburyoritsbusinessormanagementforthepurposesofpreparingthisProxyStatement.Therefore,nonpublicinformationconcerningCadburysbusinessandfinancialconditionwasnotavailabletousforthepurposeofpreparingthisProxyStatement.AlthoughwehavenoknowledgethatwouldindicatethatanyinformationorstatementsrelatingtoCadburycontainedorincorporatedbyreferenceinthisProxyStatementareinaccurateorincomplete,wewerenotinvolvedinthepreparationoftheinformationorthestatementsandcannotverifythem.

    WerefertoKraftFoodsanditssubsidiaries,includingCadburyanditssubsidiaries,aftercompletionoftheCadburyacquisition,asthecombinedcompany.AnyfinancialinformationregardingCadburythatmaybedetrimentaltothecombinedcompanyandthathasnotbeenpubliclydisclosedbyCadbury,orerrorsinourestimatesduetothelackofcooperationfromCadbury,mayhaveanadverseeffectonthebenefitsweexpecttoachievethroughtheconsummationoftheCadburyacquisition.

    PursuanttoRule409undertheSecuritiesActof1933,asamended,andRule12b21undertheExchangeAct,wehaverequestedthatCadburyprovideuswithinformationrequiredforcompletedisclosureregardingCadburysbusinesses,operations,financialconditionandmanagement.OurlegaladvisorsreceivedaletterdatedDecember15,2009inwhichCadburyrejectedourrequest.However,ifwereceivetheinformationbeforetheSpecialMeetingandweconsiderittobematerial,reliableandappropriate,thenwewillamendorsupplementthisProxyStatementtoprovidethisinformation.

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    CURRENCIES

    InthisProxyStatement,unlessotherwisespecifiedorthecontextotherwiserequires:

    poundssterling,pounds,sterling,U.K.pounds,,penceorpeachrefertothelawfulcurrencyof

    theUnitedKingdom U.S.dollars,dollarsor$eachrefertothelawfulcurrencyoftheUnitedStatesand

    eurooreachrefertothecurrencyintroducedatthestartofthethirdstageofEuropeaneconomicand

    monetaryunionpursuanttotheTreatyestablishingtheEuropeanCommunity,asamended.

    WepublishourfinancialstatementsinU.S.dollarsandCadburypublishesitsfinancialstatementsinpoundssterling.CertainKraftFoodsandCadburyfinancialinformationincludedinthisProxyStatementwastranslatedusingcompanyspecificexchangerates.Inpreparingourfinancialstatements,wetranslatedtheresultsofoperationsofourforeignsubsidiariesintoU.S.dollarsusingaverageexchangeratesduringeachperiodindicated.WetranslatedbalancesheetaccountsintoU.S.dollarsusingexchangeratesattheendofeachperiodindicated.AccordingtoCadburyspublicfilings,inpreparingitsfinancialstatements,CadburytranslatedthebalancesheetsofitsnonU.K.subsidiariesintopoundssterlingusingexchangeratesattheendofeachperiodindicated.CadburytranslatedtheresultsofitsnonU.K.subsidiaryundertakingsintopoundssterlingatanaveragerate,calculatedusingtheexchangeratesprevailingattheendofeachmonthduringtheapplicableperiodpresented.Wearenotmakinganyrepresentationtoyouregardingthosetranslatedamounts.

    PleaseseethesectionofthisProxyStatemententitledExchangeRateInformationforadditionalinformationregardingtheexchangeratesbetweenpoundssterlingandtheU.S.dollar.

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    EXCHANGERATEINFORMATION

    Thefollowingtableshows,fortheperiodsindicated,informationconcerningtheexchangeratebetweenU.S.dollarsandpoundssterling.TheinformationinthefollowingtableisexpressedinU.S.dollarsperpoundsterlingandisbasedonthenoonbuyingrateinNewYorkCityforcabletransfersinpoundssterlingascertifiedforcustomspurposesbytheFederalReserveBankofNewYork.Theaverageratesforthemonthlyperiodspresentedinthesetableswerecalculatedbytakingthesimpleaverageofthedailynoonbuyingrates.Theaverageratesfortheinterimperiodsandannualperiodspresentedinthesetableswerecalculatedbytakingthesimpleaverageofthenoonbuyingratesonthelastdayofeachmonthduringtherelevantperiod.

    OnDecember14,2009,thelatestpracticabledateforwhichsuchinformationwasavailablepriortotheprintingofthisProxyStatement,thenoonbuyingratewas$1.624per1.00.ThesetranslationsshouldnotbeconstruedasarepresentationthattheU.S.dollaramountsactuallyrepresent,orcouldbeconvertedinto,poundssterlingattheratesindicated.

    PeriodendRate

    AverageRate High Low

    RecentMonthlyData November2009 $1.648 $1.660 $1.680 $1.638October2009 1.648 1.621 1.661 1.588September2009 1.600 1.632 1.670 1.591August2009 1.631 1.653 1.698 1.621July2009 1.671 1.638 1.671 1.603June2009 1.645 1.637 1.655 1.598May2009 1.616 1.542 1.616 1.488April2009 1.480 1.471 1.499 1.440March2009 1.430 1.417 1.473 1.376February2009 1.428 1.442 1.494 1.422January2009 1.441 1.446 1.525 1.366December2008 1.462 1.485 1.546 1.440November2008 1.535 1.533 1.616 1.479

    InterimPeriodData NinemonthsendedSeptember30,2009 $1.600 $1.544 $1.698 $1.366SixmonthsendedJune30,2009 1.645 1.494 1.655 1.366NinemonthsendedSeptember30,2008 1.780 1.947 2.031 1.750SixmonthsendedJune30,2008 1.991 1.975 2.031 1.941

    AnnualData(YearendedDecember31,) 2008 $1.462 $1.854 $2.031 $1.4402007 1.984 2.002 2.110 1.9242006 1.959 1.843 1.979 1.7262005 1.719 1.815 1.929 1.7142004 1.916 1.836 1.948 1.754

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    FORWARDLOOKINGSTATEMENTS

    CertainstatementscontainedorincorporatedbyreferenceinthisProxyStatementmayconstituteforwardlookingstatements.AllstatementsinthisProxyStatement,otherthanthoserelatingtohistoricalinformationorcurrentcondition,areforwardlookingstatements.Theseforwardlookingstatementsaresubjecttoanumberofrisksanduncertainties,manyofwhicharebeyondourcontrol,thatcouldcauseouractualresultstodiffermateriallyfromthoseindicatedinanysuchstatements.Suchfactorsinclude,butarenotlimitedto,continuedvolatilityofinputcosts,pricingactions,increasedcompetition,ourabilitytodifferentiateourproductsfromretailerbrands,unanticipatedexpensesinconnectionwithlitigation,settlementoflegaldisputes,regulatoryinvestigationsorenforcementactions,ourindebtednessandabilitytopayourindebtedness,theshiftinconsumerpreferencetolowerpricedproducts,risksfromoperatingoutsidetheUnitedStates,taxlawchanges,failuretoobtainnecessaryregulatoryapprovalsorrequiredfinancingortosatisfyanyoftheotherconditionsoftheproposedacquisitionofCadbury,adverseeffectsonthemarketpriceofourcommonstockandonouroperatingresultsbecauseofafailuretocompletetheproposedacquisition,failuretorealizetheexpectedbenefitsoftheproposedacquisition,significanttransactioncostsand/orunknownliabilitiesandgeneraleconomicandbusinessconditionsthataffectthecombinedcompanyfollowingthecompletionoftheproposedacquisition.Formoreinformationontheseandotherfactorsthatcouldaffectourforwardlookingstatements,pleasealsoseethesectionofthisProxyStatemententitledRiskFactorsandtheriskfactorsinourfilingswiththeSEC,includingourmostrecentlyfiledAnnualReportonForm10KandsubsequentreportsonForms10Qand8Kincorporatedbyreferenceherein.WedisclaimanddonotundertakeanyobligationtoupdateorreviseanyforwardlookingstatementinthisProxyStatementexceptasrequiredbyapplicablelaworregulation.

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    SELECTEDHISTORICALCONSOLIDATEDFINANCIALDATAOFKRAFTFOODS

    ThefollowingtablesetsforththeselectedhistoricalconsolidatedfinancialandoperatingdataofKraftFoodsfortheninemonthperiodsendedSeptember30,2009and2008andforeachoftheyearsinthefiveyearperiodendedDecember31,2008.Thefollowingdatahavebeenderivedfromtheannualauditedconsolidatedfinancialstatements,includingtheconsolidatedbalancesheetsatDecember31,2008and2007andtherelatedconsolidatedstatementsofincomeandofcashflowsforeachofthethreeyearsintheperiodendedDecember31,2008andnotestheretoandtheunauditedSelectedFinancialDataSummarycontainedinKraftFoodsCurrentReportonForm8KfiledwiththeSEConNovember3,2009.ThedatafortheninemonthsendedSeptember30,2009and2008havebeenderivedfromunauditedconsolidatedfinancialstatementsofKraftFoodscontainedinKraftFoodsQuarterlyReportonForm10QforthequarterendedSeptember30,2009,andwhich,intheopinionofmanagement,includealladjustments,consistingonlyofnormalrecurringadjustments,necessaryforafairstatementoftheresultsfortheunauditedinterimperiods.AllhistoricalfinancialinformationpresentedwithrespecttoKraftFoodsispreparedinaccordancewithU.S.GAAP,whichdiffersfromInternationalFinancialReportingStandards(IFRS)inanumberofsignificantrespects.ForageneraldiscussionofthesignificantdifferencesbetweenIFRSandU.S.GAAP,pleaseseethesectionofthisProxyStatemententitledSummaryofSignificantDifferencesBetweenIFRSandU.S.GAAP.Historicalresultsarenotindicativeoftheresultstobeexpectedinthefutureandresultsofinterimperiodsarenotnecessarilyindicativeofresultsfortheentireyear.

    ThissummaryinformationisderivedfromandshouldbereadinconjunctionwiththefinancialstatementsandrelatednotesincorporatedbyreferenceintothisProxyStatement,asdescribedinIncorporationbyReferenceonpage76ofthisProxyStatement.

    Ninemonthsended

    September30, YearendedDecember31, 2009 2008 2008 2007 2006 2005 2004 (inmillions,exceptforpershareandemployeedata) SummaryofOperations: Netrevenues $29,361 $31,251 $41,932 $35,858 $33,018 $32,779 $30,859Costofsales 18,890 20,777 28,088 23,656 21,190 21,115 19,474Operatingincome 4,218 3,513 3,843 4,176 4,158 4,373 4,327Operatingmargin 14.4% 11.2% 9.2% 11.6% 12.6% 13.3% 14.0%Interestandotherexpense,net 915 934 1,240 604 510 635 666Earningsfromcontinuing

    operationsbeforeincometaxes 3,303 2,579 2,603 3,572 3,648 3,738 3,661Provisionforincometaxes 986 834 755 1,080 816 1,066 1,165Earnings/(loss)fromdiscontinued

    operations,netofincometaxes 968 1,045 232 233 (33) 219Netearnings 2,317 2,713 2,893 2,724 3,065 2,639 2,715Noncontrollinginterest 6 7 9 3 5 3 3NetearningsattributabletoKraft

    Foods 2,311 2,706 2,884 2,721 3,060 2,636 2,712BasicEPSattributabletoKraft

    Foods: Continuingoperations 1.56 1.15 1.22 1.56 1.70 1.57 1.45Discontinuedoperations 0.63 0.70 0.15 0.14 (0.02) 0.13

    NetearningsattributabletoKraftFoods 1.56 1.78 1.92 1.71 1.84 1.55 1.58

    DilutedEPSattributabletoKraftFoods:

    Continuingoperations 1.56 1.14 1.21 1.56 1.70 1.57 1.45Discontinuedoperations 0.63 0.69 0.14 0.14 (0.02) 0.13

    NetearningsattributabletoKraftFoods 1.56 1.77 1.90 1.70 1.84 1.55 1.58

    Dividendsdeclaredpershare 0.87 0.83 1.12 1.04 0.96 0.87 0.77Dividendsdeclaredasa%ofBasic

    EPS 55.8% 46.6% 58.3% 60.8% 52.2% 56.1% 48.7%Dividendsdeclaredasa%of

    DilutedEPS 55.8% 46.9% 58.9% 61.2% 52.2% 56.1% 48.7%

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    SELECTEDHISTORICALCONSOLIDATEDFINANCIALDATAOFKRAFTFOODS(cont)

    Ninemonthsended

    September30, YearendedDecember31, 2009 2008 2008 2007 2006 2005 2004 (inmillions,exceptforpershareandemployeedata)Weightedaverageshares

    Basic 1,477 1,516 1,505 1,591 1,659 1,699 1,720Weightedaverageshares

    Diluted 1,485 1,527 1,515 1,600 1,661 1,699 1,720Netcashprovidedby

    operatingactivities 3,269 2,529 4,141 3,571 3,720 3,464 4,008Capitalexpenditures 749 901 1,367 1,241 1,169 1,171 1,006Depreciation 644 734 963 873 884 869 868Property,plantand

    equipment,net 10,409 10,638 9,917 10,778 9,693 9,817 9,985Inventories,net 4,073 4,792 3,881 4,238 3,436 3,272 3,365Totalassets 66,669 67,029 63,173 68,132 55,548 57,597 59,905Longtermdebt 18,108 18,874 18,589 12,902 7,081 8,475 9,723Totaldebt 20,725 20,593 20,251 21,009 10,821 11,200 12,518Totallongtermliabilities 29,402 30,176 29,773 23,574 16,520 19,285 20,903TotalKraftFoods

    ShareholdersEquity 25,125 22,295 27,407 28,536 29,574 29,888TotalEquity 25,211 26,554 22,356 27,445 28,562 29,600 29,924Bookvaluepercommon

    shareoutstanding 17.02 18.08 15.18 17.87 17.44 17.71 17.53Marketpricepercommon

    sharehigh/low 29.84/20.81 34.97/28.04 34.97/24.75 37.20/29.95 36.67/27.44 35.65/27.88 36.06/29.45

    Closingpriceofcommonshareatperiodend 26.27 32.75 26.85 32.63 35.70 28.17 35.61

    Price/earningsratioatperiodendBasic 17 18 14 19 19 18 23

    Price/earningsratioatperiodendDiluted 17 19 14 19 19 18 23

    Numberofcommonsharesoutstandingatperiodend 1,476 1,469 1,469 1,534 1,636 1,670 1,705

    Numberofemployees N/A N/A 98,000 103,000 90,000 94,000 98,000

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    SELECTEDHISTORICALCONSOLIDATEDFINANCIALDATAOFCADBURY

    ThefollowingtablesetsforththeselectedhistoricalconsolidatedfinancialandoperatingdataofCadburyforthesixmonthperiodsendedJune30,2009and2008andforeachoftheyearsinthefiveyearperiodendedDecember31,2008.

    WearenotaffiliatedwithCadbury,andwehavenothadthecooperationofCadburysmanagementorduediligenceaccesstoCadburyoritsbusinessormanagementforthepurposesofpreparingthisProxyStatement.Therefore,nonpublicinformationconcerningCadburysbusinessandfinancialconditionwasnotavailabletousforthepurposeofincludingselectedhistoricalconsolidatedfinancialdataofCadburyfortheninemonthperiodendedSeptember30,2009.WehaverequestedcurrentfinancialinformationfromCadbury,includingfinancialinformationfortheninemonthperiodendedSeptember30,2009.OurlegaladvisorsreceivedaletterdatedDecember15,2009inwhichCadburyrejectedourrequest.However,ifwedoreceivesuchinformationinatimelymanner,wewouldincludeselectedhistoricalconsolidatedfinancialdataofCadburyfortheninemonthperiodendedSeptember30,2009inthisProxyStatement.

    TheinformationwithrespecttothesixmonthsendedJune30,2009and2008hasbeenderivedfromtheunauditedconsolidatedfinancialstatementsofCadburycontainedinCadburysReportonForm6KfurnishedtotheSEConJuly29,2009.Thefollowingdata,insofarasitrelatestoeachoftheyears2004through2008,havebeenderivedfromannualconsolidatedfinancialstatements,includingtheconsolidatedbalancesheetsatDecember31,2008and2007andtherelatedconsolidatedstatementsofincomeandofcashflowsforeachofthethreeyearsintheperiodendedDecember31,2008andnotestheretocontainedinCadburysAnnualReportonForm20FfortheyearendedDecember31,2008.AllhistoricalfinancialinformationpresentedwithrespecttoCadburyispreparedinaccordancewithIFRS.CadburysconsolidatedfinancialstatementswerepreparedinpoundssterlingandinaccordancewithIFRS,whichdiffersfromU.S.GAAPinanumberofsignificantrespects.ForageneraldiscussionofthesignificantdifferencesbetweenIFRSandU.S.GAAP,pleaseseethesectionofthisProxyStatemententitledSummaryofSignificantDifferencesBetweenIFRSandU.S.GAAP.Historicalresultsarenotindicativeoftheresultstobeexpectedinthefutureandresultsofinterimperiodsarenotnecessarilyindicativeofresultsfortheentireyear.

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    SELECTEDHISTORICALCONSOLIDATEDFINANCIALDATAOFCADBURY(cont)

    ThissummaryinformationisderivedfromandshouldbereadinconjunctionwiththefinancialstatementsandrelatednotesincorporatedbyreferenceintothisProxyStatement,asdescribedinIncorporationbyReferenceonpage76ofthisProxyStatement.

    Sixmonthsended

    June30, YearendedDecember31, 2009 2008 2008 2007 2006 2005 2004 (inmillionsofpoundssterling,exceptforpersharedata) ContinuingOperations Revenue 2,767 2,440 5,384 4,699 4,483 4,295 3,990Tradingcosts (2,462) (2,226) (4,803) (4,258) (4,071) (3,799) (3,576)Restructuringcosts (105) (70) (194) (165) (107) (62) (110)Nontradingitems 1 (6) 1 2 23 5 17ProfitfromOperations 201 138 388 278 328 439 321Shareofresultinassociates 3 4 10 8 (15) 13 11

    Profitbeforefinancingandtaxation 204 142 398 286 313 452 332Investmentrevenue 18 28 52 56 50 45 51Financecosts (110) (36) (50) (88) (119) (174) (196)Profitbeforetaxation 112 134 400 254 244 323 187Taxation (33) 26 (30) (105) (68) 24 11Profitfortheperiodfromcontinuingoperations 79 160 370 149 176 347 198Discontinuedoperations(1)

    (Loss)/profitfortheperiodfromdiscontinuedoperations 234 (47) (4) 258 989 429 349

    Profitfortheperiod 313 113 366 407 1,165 776 547Attributableto:

    Equityholdersoftheparent 313 113 364 405 1,169 765 525Minorityinterests 2 2 (4) 11 22

    313 113 366 407 1,165 776 547Earningspershare Fromcontinuinganddiscontinuedoperations

    Basic 23.1p 6.0p 22.6p 19.4p 56.4p 37.3p 25.9pDiluted 23.1p 6.0p 22.6p 19.2p 55.9p 36.9p 25.7p

    Fromcontinuingoperations Basic 5.8p 8.5p 22.8p 7.0p 8.7p 16.4p 8.7pDiluted 5.8p 8.5p 22.8p 7.0p 8.6p 16.2p 8.6p

    EarningsperADR(2) Fromcontinuinganddiscontinuedoperations

    Basic 92.4p 24.0p 90.4p 77.6p 225.6p 149.2p 103.6pDiluted 92.4p 24.0p 90.4p 76.8p 223.6p 147.6p 102.8p

    Fromcontinuingoperations Basic 23.2p 34.0p 91.2p 28.0p 34.8p 65.6p 34.8pDiluted 23.2p 34.0p 91.2p 28.0p 34.4p 64.8p 34.4p

    (1) CadburysbeveragebusinessesinEuropeandSouthAfricaweresoldin2006.In2008,Cadburycompletedthe

    demergerofitsAmericasBeveragesbusinessandannouncedithadenteredintoaconditionalagreementtoselltheAustraliaBeveragesbusiness.OnMarch12,2009,CadburyenteredintoadefinitivesaleandpurchaseagreementforthesaleofAustraliaBeverages.Allofthesebusinesseshavebeenclassifiedasdiscontinuedoperationsandthe2004to2007financialinformationhasbeenrepresentedaccordingly.

    (2) EachCadburyADR(i.e.,ADS)representsfourordinaryshares.

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    SELECTEDUNAUDITEDPROFORMACOMBINEDFINANCIALDATA

    ThefollowingselectedunauditedproformafinancialdatafortheyearendedDecember31,2008andforthesixmonthperiodendedJune30,2009,thedateofthelatestpubliclyavailablefinancialinformationofCadbury,showtheeffectoftheCadburyacquisitiononKraftFoodsresultsofoperationsasifithadoccurredonJanuary1,2008.ThefollowingunauditedproformabalancesheetdataatJune30,2009showtheeffectoftheCadburyacquisitiononKraftFoodsfinancialpositionasifithadoccurredonthatdate.

    WearenotaffiliatedwithCadbury,andwehavenothadthecooperationofCadburysmanagementorduediligenceaccesstoCadburyoritsbusinessormanagementforthepurposesofpreparingthisProxyStatement.Therefore,nonpublicinformationconcerningCadburysbusinessandfinancialconditionwasnotavailabletousforthepurposeofpresentingproformacombinedfinancialdatafortheninemonthperiodendedSeptember30,2009.WehaverequestedcurrentfinancialinformationfromCadbury,includingfinancialinformationfortheninemonthperiodendedSeptember30,2009.OurlegaladvisorsreceivedaletterdatedDecember15,2009inwhichCadburyrejectedourrequest.However,ifwedoreceivesuchinformationinatimelymanner,wewouldcompileproformacombinedfinancialdatafortheninemonthperiodendedSeptember30,2009andincludeitinthisProxyStatement.

    TheunauditedproformafinancialdataincludedinthisProxyStatementarebasedonthehistoricalfinancialstatementsofKraftFoodsandCadbury,andonpubliclyavailableinformationandcertainassumptionsthatwebelievearereasonable,whicharedescribedinthenotestotheUnauditedU.S.GAAPProFormaFinancialInformationincludedinthisProxyStatement.Significantly,wehavenotperformedanyduediligenceordetailedvaluationanalysisnecessarytodeterminethefairmarketvaluesoftheCadburyassetstobeacquiredandliabilitiestobeassumed.Accordingly,theproformafinancialstatementsdonotincludeanallocationofthepurchaseprice,unlessspecifiedotherwise.

    TheinformationinthefollowingtablehasbeenderivedfromtheunauditedconsolidatedfinancialstatementsofKraftFoodscontainedinKraftFoodsQuarterlyReportonForm10QforthequarterendedJune30,2009,theauditedconsolidatedfinancialstatementsofKraftFoodscontainedinKraftFoodsCurrentReportonForm8KfiledwiththeSEConNovember3,2009,theunauditedconsolidatedfinancialstatementsofCadburycontainedinCadburysReportonForm6KfurnishedtotheSEConJuly29,2009andtheauditedconsolidatedfinancialstatementsofCadburycontainedinCadburysAnnualReportonForm20FfortheyearendedDecember31,2008.

    WehavetranslatedtheCadburyfiguresinthissectionfrompoundssterlingintoU.S.dollarsusingaverageexchangeratesapplicableduringtheperiodspresentedfortheunauditedproformaconsolidatedstatementsofearningsandtheperiodendexchangeratefortheunauditedproformaconsolidatedbalancesheet,asdescribedinthesectionofthisProxyStatemententitledUnauditedU.S.GAAPProFormaFinancialInformation.

    CadburysconsolidatedfinancialstatementsarepreparedinaccordancewithIFRS,whichdiffersinanumberofsignificantrespectsfromU.S.GAAP.ForageneraldiscussionofthesignificantdifferencesbetweenIFRSandU.S.GAAP,pleaseseethesectionofthisProxyStatemententitledSummaryofSignificantDifferencesBetweenIFRSandU.S.GAAP.

    ThefollowingshouldbereadinconnectionwiththesectionofthisProxyStatemententitledUnauditedU.S.GAAPProFormaFinancialInformation,andotherinformationincludedinorincorporatedbyreferenceintothisProxyStatement.

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    SELECTEDUNAUDITEDPROFORMACOMBINEDFINANCIALDATA(cont)

    Thefollowingproformafinancialinformationispresentedforillustrativepurposesonlyandisnotnecessarilyindicativeoftheresultsofoperationsandfinancialpositionthatwouldhavebeenachievedhadtheconsummationoftheacquisitiontakenplaceonthedateindicatedorofthefutureoperationsofthecombinedcompany.ThefollowingtableshouldbereliedononlyforthelimitedpurposeofpresentingwhattheresultsofoperationsandfinancialpositionofthecombinedbusinessesofKraftFoodsandCadburymighthavelookedlikehadtheacquisitionbeenconsummatedatanearlierdate.ForadiscussionoftheassumptionsandadjustmentsmadeinthepreparationoftheproformafinancialinformationpresentedinthisProxyStatement,pleaseseethesectionofthisProxyStatemententitledUnauditedU.S.GAAPProFormaFinancialInformation.

    Forthesixmonthsended

    June30,2009

    Fortheyearended

    December31,2008 ProFormaCombined

    (inmillions,

    exceptpercentagesandpersharedata) StatementofOperations Netrevenues $ 23,656 $ 52,031Costofsales 14,819 33,478Operatingincome 3,027 4,467Operatingmargin 12.8% 8.6%Interestandotherexpense,net 806 1,443Earningsfromcontinuingoperationsbeforeincometaxes 2,221 3,024Provisionforincometaxes 722 717Earningsfromcontinuingoperationsattributabletoshareholders 1,495 2,294Basicearningspersharefromcontinuingoperations 0.81 1.23Dilutedearningspersharefromcontinuingoperations 0.81 1.22WeightedaveragesharesBasic 1,842 1,871WeightedaveragesharesDiluted 1,850 1,881

    AsofJune30,2009

    Proformacombined

    (inmillions,exceptpersharedata)

    BalanceSheetData Property,plantandequipment,net $ 13,057Inventories,net 5,407Totalassets 89,875Longtermdebt 27,521Totaldebt 30,334Totallongtermliabilities 41,354TotalShareholdersEquity 33,675TotalEquity 33,771Bookvaluepershareoutstanding 18.29Numberofsharesoutstandingatperiodend 1,841

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    HISTORICALANDPROFORMAPERSHAREDATA

    Thetablesetforthbelowdepictsthebasicanddilutedearningspershare,cashdividendsdeclaredpershareandbookvaluepersharefor(a)KraftFoodsandCadburyonahistoricalbasis,(b)thecombinationofKraftFoodsandCadburyonaproformacombinedbasisand(c)Cadburyincomparisonwiththeequivalentproformanetincomeandbookvaluepershareattributableto0.2589ofashareofKraftFoodscommonstockthatwillbereceivedforeachCadburyordinaryshare,includingeachsharerepresentedbyaCadburyADS,exchangedintheCadburyacquisition,basedontheaverageexchangeratefortheperiod.TheproformadataofthecombinedcompanywerederivedbycombiningthehistoricalconsolidatedfinancialinformationofKraftFoodsandusingtheacquisitionmethodofaccountingforbusinesscombinationsasdescribedinthesectionofthisProxyStatemententitled,TheOfferAccountingTreatment.ForadiscussionoftheassumptionsandadjustmentsmadeinthepreparationoftheproformafinancialinformationpresentedinthisProxyStatement,seethesectionofthisProxyStatemententitledUnauditedU.S.GAAPProFormaFinancialInformation.

    WearenotaffiliatedwithCadbury,andwehavenothadthecooperationofCadburysmanagementorduediligenceaccesstoCadburyoritsbusinessormanagementforthepurposesofpreparingthisProxyStatement.Therefore,nonpublicinformationconcerningCadburysbusinessandfinancialconditionwasnotavailabletousforthepurposeofpresentinghistoricalandproformapersharedatafortheninemonthperiodendedSeptember30,2009.WehaverequestedcurrentfinancialinformationfromCadbury,includingfinancialinformationfortheninemonthperiodendedSeptember30,2009.OurlegaladvisorsreceivedaletterdatedDecember15,2009inwhichCadburyrejectedourrequest.However,ifwedoreceivesuchinformationinatimelymanner,wewouldcompilehistoricalandproformapersharedatafortheninemonthperiodendedSeptember30,2009andincludeitinthisProxyStatement.

    CadburysconsolidatedfinancialstatementsarepreparedinaccordancewithIFRS,whichdiffersinanumberofsignificantrespectsfromU.S.GAAP.ForageneraldiscussionofthesignificantdifferencesbetweenIFRSandU.S.GAAP,pleaseseethesectionofthisProxyStatemententitledSummaryofSignificantDifferencesBetweenIFRSandU.S.GAAP.

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    YoushouldreadtheinformationpresentedinthetablebelowtogetherwiththehistoricalfinancialstatementsofKraftFoodsandCadburyandtherelatednotesandtheUnauditedU.S.GAAPProFormaFinancialInformationappearingelsewhereinthisProxyStatementorincorporatedhereinbyreference.Theproformadataareunauditedandforillustrativepurposesonly.Thecompaniesmayhaveperformeddifferentlyhadtheyalwaysbeencombined.YoushouldnotrelyonthisinformationasbeingindicativeofthehistoricalresultsthatwouldhavebeenachievedhadthecompaniesalwaysbeencombinedorthefutureresultsthatthecombinedcompanywillachieveaftertheconsummationoftheCadburyacquisition.

    Forthesixmonthsended

    June30,2009 Yearended

    December31,2008KraftFoodshistoricaldata Earningspersharefromcontinuingoperations

    Basic $ 1.01 $ 1.22Diluted 1.00 1.21

    Cashdividendsdeclaredpershare 0.58 1.12Bookvaluepershare 16.47

    Cadburyhistoricaldata Earningspersharefromcontinuingoperations

    Basic 5.8p 22.8pDiluted 5.8p 22.8p

    Cashdividendsdeclaredpershare 5.7p 16.4pBookvaluepershare 227.0p

    Unauditedproformacombined Earningspershare

    Basic $ 0.81 $ 1.23Diluted 0.81 1.22

    Cashdividendsdeclaredpershare(1) 0.58 1.12Bookvaluepershare 18.29

    Equivalentbasisunauditedproformacombined Earningspershare

    Basic 14.2p 16.9pDiluted 14.1p 16.8p

    Cashdividendsdeclaredpershare(1) 10.1p 15.5pBookvaluepershare 288.1p (1) SameashistoricalsincenochangeindividendpolicyisexpectedasaresultoftheCadburyacquisition.

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    COMPARATIVEMARKETPRICEANDDIVIDENDINFORMATION

    OurcommonstockistradedontheNYSEunderthesymbolKFT.CadburyordinarysharesaretradedontheLondonStockExchange(LSE)underthesymbolCBRY,andCadburyADSsaretradedontheNYSEunderthesymbolCBY.

    Thefollowingtablesetsforth,fortheperiodsindicated,thepersharehighandlowsalespricesofourcommonstockandCadburyADSsontheNYSEandCadburyordinarysharesontheLSE,aswellasthedividendsdeclaredthereon.ThesharepricesinthetablehavebeenobtainedfromFactSet.CadburyordinaryshareandCadburyADSdividendnumbershavebeenobtainedfrompubliclyavailableinformationpublishedbyCadbury.

    KraftFoods

    commonstock($) Cadburyordinaryshares(p) CadburyADSs($) High Low Dividend High Low Dividend High Low Dividend2007,quarterended

    March31 35.91 30.20 0.25 656.50 529.00 9.90 51.41 40.74 0.772June30 36.74 30.33 0.25 723.50 652.00 5.00 57.30 51.37 N/ASeptember30 36.33 31.15 0.27 680.00 534.50 N/A 54.30 42.78 0.406December31 35.20 32.30 0.27 641.00 570.00 N/A 53.24 46.90 N/A

    2008,quarterended March31 32.70 28.81 0.27 625.00 539.50 10.50 49.56 43.43 N/AJune30(1) 32.82 28.39 0.27 N/A N/A N/A N/A N/A N/A

    April1May1 N/A N/A N/A 586.50 556.50 N/A 46.61 43.86 0.844May2June30 N/A N/A N/A 704.50 609.50 N/A 56.01 48.55 N/A

    September30 34.97 28.40 0.29 661.50 565.50 5.30 50.94 40.32 0.4195December31 33.54 24.87 0.29 605.50 453.25 N/A 40.09 29.65 N/A

    2009 January1March31 29.57 21.00 0.29 619.00 497.25 11.10 37.18 28.06 0.6394April1June30 27.04 22.05 0.29 554.50 486.50 N/A 35.99 28.78 N/AJuly1September30 28.81 25.70 0.29 805.00 520.00 5.70 52.53 33.91 0.376October1December1 27.64 25.95 N/A 814.00 758.00 N/A 54.00 49.72 N/A

    (1) OnMay2,2008,CadburyplcwasinsertedasanewholdingcompanyaboveCadburySchweppesplc,tradingonthe

    LSEwithasecondarylistingontheNYSEviaanAmericanDepositaryReceiptprogramandbegantradingasastandaloneconfectionerycompany.OnMay7,2008,CadburycompletedthedemergerofitsAmericasBeveragesbusinessasDr.PepperSnappleGroup.ThemarketpricesforCadburyinthetableaboveincludethevalueoftheAmericasBeveragesbusinessthroughsuchdate.OnMay1,2008,thelasttradingdaypriortoCadburytradingasastandaloneconfectionerycompany,theclosingpriceperCadburySchweppesordinarysharewas574.50pandtheclosingpriceperCadburySchweppesADSwas$45.46.OnMay2,2008,thefirstdaythatCadburytradedasastandalonecompany,theclosingpriceperCadburyordinarysharewas640.00pandtheclosingpriceperCadburyADSwas$51.60.

    Thefollowingtableshows,asofSeptember4,2009,thelastfulltradingdaybeforewepubliclyannouncedapossibleofferforacombinationwithCadbury,November6,2009,thelastfulltradingdaybeforewepubliclyannouncedafirmintentiontomakeanoffertoacquireCadbury,andDecember1,2009,thelastpracticabledaybeforewemadetheoffer,theclosingpricepershareofourcommonstockandCadburyADSontheNYSEandtheclosingpriceperCadburyordinaryshareontheLSE.Thistablealsopresentstheimpliedequivalentvaluepersecurity.TheimpliedequivalentvalueofaCadburyordinarysharewascalculatedbymultiplyingtheclosingmarketpricepershareofourcommonstockontheNYSEby0.2589,theexchangeratioforeachCadburyordinarysharetenderedintheoffer,andthenaddingtothatamountthecashportionoftheexchangeconsiderationof300pencepayableforeachCadburyordinarysharetenderedintheoffer.Theimpliedequivalent

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    valueofaCadburyADSwascalculatedbymultiplyingtheclosingmarketpricespershareofourcommonstockby1.0356,theimpliedexchangeratioforeachCadburyADStenderedintheoffer,andthenaddingtothatamountanamountinU.S.dollarsequaltothecashportionoftheexchangeconsiderationof1,200pencepayableforeachCadburyADStenderedintheoffer.UnlessCadburyshareholderselecttoreceiveallcashorallsharesofKraftFoodscommonstockunderthemixandmatchfacility(asdescribedinthesectionofthisProxyStatemententitledTheOfferTermsoftheOffer),theywillreceivetheofferconsiderationinamixtureofcashandsharesofKraftFoodscommonstockonthetermssetforthintheDecember4offerdocumentsanddescribedinthisProxyStatement.

    Incalculatingtheimpliedequivalentvaluesbelow,amountsinU.S.dollarshavebeentranslatedintopoundssterling,inthecaseofCadburyordinaryshares,andamountsinpoundssterlinghavebeentranslatedintoU.S.dollars,inthecaseofCadburyADSs,ineachcaseasfollows:

    atarateof1.00=$1.6346,asquotedbyWM/ReutersonSeptember4,2009

    atarateof1.00=$1.6609,asquotedbyWM/ReutersonNovember6,2009and

    atarateof1.00=$1.6627,asquotedbyWM/ReutersonDecember1,2009.

    KraftFoods

    commonstock($)

    CadburySecurity ImpliedEquivalentValueper

    CadburySecurity

    ordinaryshares(p)

    ADSs($)(1)

    ordinaryshares(p)(2)

    ADSs($)(2)

    September4,2009 28.10 568.00 37.46 745.07 48.72November6,2009 26.78 758.00 50.50 717.44 47.66December1,2009 26.50 806.00 53.24 712.63 47.40(1) EachCadburyADSrepresentsfourCadburyordinaryshares.

    (2) UnlessCadburyshareholderselecttoreceiveallcashorallsharesunderthemixandmatchfacility,theywillreceivetheofferconsiderationinamixtureofcashandsharesofKraftFoodscommonstockonthetermssetforthintheDecember4offerdocumentsanddescribedinthisProxyStatement.

    Themarketpricesofourcommonstock,CadburyordinarysharesandCadburyADSsarelikelytofluctuatepriortotheexpirationdateoftheofferandcannotbepredicted.Weurgeyoutoobtaincurrentmarketinformationregardingourcommonstock,CadburyordinarysharesandCadburyADSs.

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    RISKFACTORS

    BeforedecidinghowtovoteyoursharesattheSpecialMeeting,youshouldconsidercarefullythefollowingriskfactors,andtheotherrisksandinformationcontainedinthisProxyStatementandinthedocumentsincorporatedhereinbyreference.PleaseseeWhereYouCanFindMoreInformationonpage75ofthisProxyStatementforinformationonwhereyoucanfindadditionalriskfactorsandotherinformationincorporatedbyreferenceinthisProxyStatement.

    RiskFactorsRelatingtotheProposedCadburyAcquisitionandtheOffer

    OurexistingshareholderswillbedilutedasaconsequenceoftheissuanceofourcommonstockpursuanttotheproposedCadburyacquisitionandtheywillhavereducedownershipandvotinginterestsinKraftFoodsfollowingcompletionoftheCadburyacquisition.

    ExistingKraftFoodsshareholderswillownasmallerpercentageofourcommonstockthantheycurrentlyown.Weestimatethat,ifweissuedall370millionofthesharesweareseekingapprovaltoissue,existingKraftFoodsshareholderswillownapproximately80%ofthesharesofourcommonstockoutstandingimmediatelyaftertheCadburyacquisition,includinganyrelatedequityfinancing,iscompleted.

    RisksofexecutingtheproposedCadburyacquisitioncouldcausethemarketpriceofourcommonstocktodecline.

    ThemarketpriceofourcommonstockmaydeclineasaresultoftheCadburyacquisition,amongotherreasons,if: theintegrationofCadburysbusinessisdelayedorunsuccessful

    wedonotachievetheexpectedbenefitsofouracquisitionofCadburyasrapidlyortotheextentanticipatedby

    us,financialanalystsorinvestorsoratall

    theeffectoftheCadburyacquisitiononourfinancialresultsisnotconsistentwiththeexpectationsoffinancial

    analystsorinvestors

    formerCadburyshareholderssellasignificantnumberofsharesofourcommonstockaftercompletionofthe

    Cadburyacquisitionor

    wefailtoacquire100%oftheCadburyordinaryshares,includingthoserepresentedbyCadburyADSs,inthe

    Cadburyacquisitionorthroughthecompulsoryacquisitionprocess.

    ThenumberofsharesofourcommonstockthatwillbeissuedtoCadburyshareholderspursuanttotheCadburyacquisitionwillbenotmorethan370million,representingapproximately20%oftheissuedandoutstandingsharesofourcommonstock,asincreasedasaresultoftheCadburyacquisition,calculatedatDecember15,2009.IfasignificantproportionofCadburyshareholderswhoreceiveourcommonstockintheofferseektosellthoseshareswithinashortperiodaftercompletionoftheoffer,thiscouldcreatesellingpressureinthemarketforourcommonstockoraperceptionthatsuchsellingpressuremaydevelop,eitherofwhichmayadverselyaffectthemarketfor,andthemarketpriceof,ourcommonstock.

    Failuretoacquire100%oftheCadburyordinaryshares,includingCadburyADSs,mayaffectourabilitytocompleteanypostclosingrestructuringofCadburyanditssubsidiaries.Thiscouldreduceordelaythecostsavingsorrevenuebenefitstothecombinedcompany.

    ToeffectacompulsoryacquisitionoftheremainingCadburyordinaryshares,includingthoserepresentedbyCadburyADSs,wewillneedtofirstobtainatleast90%oftheCadburyordinarysharestowhichtheoffer

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    relates,includingthoserepresentedbyCadburyADSs.UnlikedomesticU.S.corporations,Englishcorporationscannotmergewithanothercorporationwiththeapprovalofamajorityshareholdervote.Theofferisconditionaluponvalidacceptancesbeingreceived(andnot,wherepermitted,withdrawn)inrespectofnotlessthan90%ofCadburyordinaryshares,includingthoserepresentedbyCadburyADSs,butthispercentagemaybereducedbyustoanypercentageabove50%.Werethisconditiontobereduced,wecouldcompletetheofferwithoutbeingabletoacquirecompulsorilytheremainingCadburyordinaryshares,includingthoserepresentedbyCadburyADSs,wedonotown.WewouldthenbeentitledtoexercisecontrolofCadburyandaffectthecompositionoftheCadburyBoard.However,dependingonthelevelofacceptancesreceived,wemaynotcontrolsufficientvotingrightstodelistCadburyfromtheOfficialListmaintainedbytheUnitedKingdomFinancialServicesAuthorityandfromtradingontheLSEitmaytakelongerandbemoredifficulttoeffectanypostclosingrestructuringandthefullamountofthecostsynergiesandrevenuebenefitsidentifiedforthecombinedcompanymaynotbeobtainedormayonlybeobtainedoveralongerperiodoftime.Inaddition,ifweownlessthan100%ofCadburyaftercompletionoftheoffer,wemaynotbeabletocarryoutjointcashpoolingorotherintracompanytransactionswithCadburyanditssubsidiariesonfavorabletermsoratall.Thismayadverselyaffectourabilitytoachievetheexpectedamountofcostsynergiesandrevenuebenefitsaftertheofferiscompleted.

    Wemustobtaingovernmentalandregulatoryconsentstocompletetheoffer,which,ifdelayed,notgrantedorgrantedwithonerousconditions,mayjeopardizeordelaytheoffer,resultinadditionalexpendituresofmoneyandresourcesand/orreducetheanticipatedbenefitsoftheacquisition.

    Theofferisconditionalon,amongotherthings,thereceiptofregulatoryapprovalsfromregulatorswithjurisdictionovertheoperationsofKraftFoodsandCadbury.OnDecember14,2009,therequiredwaitingperiodundertheHSRActexpired.Thegovernmentalagenciesfromwhichweseektheseapprovalshavediscretioninadministeringthegoverningregulations.AsaconditiontotheirapprovaloftheCadburyacquisition,agenciesmayimposerequirements,limitationsorcostsorrequiredivestituresorplacerestrictionsontheconductofthecombinedcompanysbusiness.Theserequirements,limitations,costs,divestituresorrestrictionscouldjeopardizeordelaytheconsummationoftheofferormayreducetheanticipatedbenefitsoftheCadburyacquisitiontothecombinedcompany.Furthermore,wemaynotbeabletoobtaintherequiredconsentsandapprovalsand,ifso,therequiredconditionsoftheoffermaynotbesatisfied.Evenifalloftherequiredconsentsandapprovalsareobtainedandtheconditionstotheconsummationoftheofferaresatisfied,wewillnotnecessarilybeabletocontroltheterms,conditionsandtimingoftheapprovals.Ifweagreetoanymaterialrequirements,limitations,costs,divestituresorrestrictionsinordertoobtainanyapprovalsrequiredtoconsummatetheoffer,theserequirements,limitations,additionalcostsorrestrictionscouldadverselyaffectthetwocompaniesabilitytointegratetheiroperationsorreducetheanticipatedbenefitsoftheproposedCadburyacquisition.Thiscouldresultinadelayincompletionof,oradecisionnottocomplete,theCadburyacquisition,orhaveamaterialadverseeffectonthebusinessandresultsofoperationsofthecombinedcompany.PleaseseethesectionofthisProxyStatemententitledTheOfferConditionsoftheOfferforadiscussionofcertainconditionsoftheofferandthesectionofthisProxyStatemententitledTheOfferRegulatoryApprovalsforadescriptionofthematerialregulatoryapprovalsnecessaryinconnectionwiththeoffer.

    EvenifamaterialadversechangetoCadburysbusinessorprospectsweretooccur,incertaincircumstances,wemaynotbeabletoinvoketheofferconditionsandterminatetheoffer,whichcouldreducethevalueofourcommonstock.

    Completionoftheofferissubjecttoanumberofconditions,includingthatthereisnomaterialadversechangeaffectingCadburybeforetheofferbecomes,orisdeclared,whollyunconditional.UndertheU.K.CityCodeonTakeoversandMergers(theU.K.TakeoverCode),andexceptfortheminimumacceptanceconditionandtheconditionsrelatingtotheEuropeanCommissionantitrustapproval(asdescribedinthesectionofthisProxyStatemententitledTheOfferRegulatoryApprovals),wemayinvokeaconditiontotheoffertocausetheoffernottoproceedonlyiftheU.K.PanelonTakeoversandMergers(theU.K.TakeoverPanel)issatisfiedthatthecircumstancesgivingrisetothatconditionnotbeingsatisfiedareofmaterialsignificancetoKraftFoodsinthecontextoftheoffer.Becauseofthisconsentrequirement,theconditionsmayprovideuslessprotectionthanthecustomaryconditionsinanofferforaU.S.domesticcompany.

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    IfamaterialadversechangeaffectingCadburyweretooccurandtheU.K.TakeoverPaneldoesnotallowustoinvokeaconditiontocausetheoffernottoproceed,themarketpriceofourcommonstockmaydeclineorourbusinessorourfinancialconditionmaybemateriallyadverselyaffected.

    WehavenothadthecooperationofCadburysmanagementorduediligenceaccesstoCadburyoritsbusinessormanagementforthepurposesofpreparingthisProxyStatement.

    WehavenothadthecooperationofCadburysmanagementorduediligenceaccesstoCadburyoritsbusinessormanagementforthepurposesofpreparingthisProxyStatement.Accordingly,wehavepreparedtheinformationin,orincorporatedbyreferenceinto,thisProxyStatementbasedonlyonpubliclyavailableinformationregardingCadburyandsuchinformationhasnotbeensubjecttocommentorverificationbyCadbury,usortheirorourdirectors.

    WehavenoknowledgethatanyinformationorstatementsrelatingtoCadburycontainedin,orincorporatedbyreferenceinto,thisProxyStatementareinaccurateorincomplete.However,wewerenotinvolvedinthepreparationofsuchinformationandstatementsand,therefore,cannotverifytheaccuracy,completenessortruthofsuchinformationoranyfailurebyCadburytodiscloseeventsthatmayhaveoccurred,butthatareunknowntous,thatmayaffectthesignificanceoraccuracyofanysuchinformation.

    Inaddition,wehavemadecertainassumptionsrelatingtotheforecastlevelofcostsavings,synergiesandassociatedcostsoftheCadburyacquisitionbasedonlyonpubliclyavailableinformationregardingCadbury.Ourassumptionsrelatingtotheforecastlevelofcostsavings,synergiesandassociatedcostsoftheCadburyacquisitionmaybeinaccurate.

    Further,thecompletionoftheCadburyacquisitionmaygiverisetotherightofcontractualcounterpartiestoterminatematerialsupplyandothercontractswithCadburyorresultinotherconsequencesasaresultofmattersunknowntous.Assuch,theremaybeothermattersrelatingtoCadburythatareunknownbyusandthatmayhaveanadverseeffectonthecombinedcompanysfinancialconditionandresultsofoperationsand/orresultinsubstantialadditionalcostsorliabilities.

    WhetherornottheCadburyacquisitioniscompleted,theannouncementandprospectofthesuccessfulcompletionoftheCadburyacquisitioncouldcausedisruptionsinthebusinessesofKraftFoodsand/orCadbury,whichcouldhavematerialadverseeffectsontheirbusinessesandfinancialresults,aswellasonthebusinessprospectsandfinancialresultsofthecombinedcompany.

    WhetherornottheCadburyacquisitioniscompleted,theannouncementandprospectofthesuccessfulcompletionoftheCadburyacquisitioncouldcausedisruptionsinthebusinessesofKraftFoodsand/orCadbury.Specifically,iftheCadburyacquisitionsucceeds,somecurrentandprospectiveemployeesmayexperienceuncertaintyabouttheirfutureroleswithinthecombinedcompany,whichmayadverselyaffectKraftFoodsandCadburysabilitiestoretainorrecruitkeymanagersandotheremployees.IfKraftFoodsandCadburyfailtomanagetheseriskseffectively,thebusinessandfinancialresultsofKraftFoods,Cadburyandthecombinedcompanycouldbeadverselyaffected.

    Iftherearesignificant,unforeseendifficultiesintegratingthebusinessoperationsofKraftFoodsandCadbury,theycouldadverselyaffectthebusinessofthecombinedcompany.

    Weintend,totheextentpossible,tointegrateouroperationswiththoseofCadbury.Ourgoalinintegratingtheseoperationsistoincreaserevenuesthroughenhancedgrowthopportunitiesandachievecostsavingsbytakingadvantageofthesignificantanticipatedsynergiesofconsolidation.However,wemayencounterdifficultiesintegratingouroperationswithCadburysoperations,resultinginadelayorthefailuretoachievetheanticipatedsynergies,includingtheexpectedincreasesinearningsandcostsavings.Ifsuchdifficultiesaresignificant,thiscouldadverselyaffectthebusinessofthecombinedcompany.

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    Wemayincurhigherthanexpectedintegration,transactionandacquisitionrelatedcosts.

    Weexpecttoincuranumberofnonrecurringcostsassociatedwithcombiningtheoperationsofthetwocompanies,includingimplementationcashcostsestimatedtobeapproximately$1.2billioninthefirstthreeyearsfollowingcompletionoftheCadburyacquisition.Inaddition,wewillincurlegal,accountingandtransactionfeesandothercostsrelatedtotheoffer.Someofthesecostsarepayableregardlessofwhethertheofferiscompletedandsuchcostsmaybehigherthananticipated.

    Althoughwebelievethattheeliminationofduplicativecosts,aswellastherealizationofotherefficienciesrelatedtotheintegrationofthebusinesses,willoffsettheseimplementationandacquisitioncostsovertime,thisnetbenefitmaynotbeachievedwithintheexpectedtimetable.Inaddition,someofthesecostscouldbehigherthanweanticipate,whichcouldreducethenetbenefitsofthetransactionandimpactourresultsofoperations.

    Thetermsoftheofferaresubjecttochange.

    Wehavereservedtherightto,inoursolediscretion,increasethevalueofouroffertoCadburyshareholders,whichcouldresultinuspayingadditionalcashconsiderationorissuingadditionalsharesofourcommonstock.IfanytermoftheCadburyacquisitiondescribedinthisProxyStatementchangesinamannerthatwebelieveismaterialtoourshareholders,wewillsupplementthisProxyStatementtoinformyouofsuchchangeand,iflegallyrequired,resolicitproxiesfromourshareholders.

    Shareholdersinthecombinedcompanywillbemoreexposedtocurrencyexchangeratefluctuationsas,followingcompletionoftheCadburyacquisition,therewillbeanincreasedproportionofassets,liabilitiesandearningsdenominatedinforeigncurrencies.

    AsaresultofthesuccessfulcompletionoftheCadburyacquisition,thefinancialresultsofthecombinedcompanywillbemoreexposedtocurrencyexchangeratefluctuationsandanincreasedproportionofassets,liabilitiesandearningswillbedenominatedinnonU.S.dollarcurrencies.

    ThecombinedcompanywillpresentitsfinancialstatementsinU.S.dollarsandwillhaveasignificantproportionofnetassetsandincomeinnonU.S.dollarcurrencies,primarilypoundssterlingandtheeuro,aswellasarangeofemergingmarketcurrencies.Thecombinedcompanysfinancialresultsandcapitalratioswillthereforebesensitivetomovementsinforeignexchangerates.AdepreciationofnonU.S.dollarcurrenciesrelativetotheU.S.dollarcouldhaveanadverseimpactonthecombinedcompanysfinancialresults.

    RiskFactorsRelatingtoOurBusinessandtheBusinessoftheCombinedCompany

    Weoperateinahighlycompetitiveindustry,whichmayaffectourprofitability.

    Thefoodindustryishighlycompetitive.Wecompetebasedonprice,productinnovation,productquality,brandrecognitionandloyalty,effectivenessofmarketing,promotionalactivityandtheabilitytoidentifyandsatisfyconsumerpreferences.

    Fromtimetotime,wemayneedtoreduceourpricesinresponsetocompetitiveandcustomerpressuresandtomaintainourmarketshare.Competitionandcustomerpressuresmayalsorestrictourabilitytoincreasepricesinresponsetocommodityandotherinputcostincreases.Ourresultsofoperationswillsufferifprofitmarginsdecrease,asaresultofareductioninprices,increasedinputcostsorotherfactors,andifweareunabletoincreasesalesvolumestooffsetthoseprofitmargindecreases.

    Retailersareincreasinglyofferingretailerbrandsthatcompetewithsomeofourproducts.Itisimportantthatourproductsprovidehighervalueand/orqualitytoourconsumersthanlessexpensivealternatives.Ifthedifferenceinvalueorqualitybetweenourproductsandthoseofretailerbrandsnarrows,orifsuchdifferencein

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    qualityisperceivedtohavenarrowed,thenconsumersmaynotbuyourproducts.Furthermore,duringperiodsofeconomicuncertainty,suchashavebeenexperiencedintherecentpastandmaybeexperiencedinthefuture,consumerstendtopurchasemoreretailerbrandsorothereconomybrands,whichcouldreducesalesvolumesofourproductsorshiftourproductmixtoourlowermarginofferings.Ifwearenotabletomaintainorimproveourbrandimageorvalueproposition,itcouldhaveamaterialeffectonourmarketshareandourprofitability.

    Wemayalsoneedtoincreasespendingonmarketing,advertisingandnewproductinnovationtoprotectexistingmarketshareorincreasemarketshare.Thesuccessofourinvestmentsissubjecttorisks,includinguncertaintiesabouttradeandconsumeracceptance.Asaresult,ourincreasedexpendituresmaynotmaintainorenhancemarketshareandcouldresultinlowerprofitability.

    Theconsolidationofretailcustomers,thelossofasignificantcustomeroramaterialreductioninsalestoasignificantcustomercouldaffectouroperatingmargins,ourprofitability,oursalesandourresultsofoperations.

    Retailcustomers,suchassupermarkets,warehouseclubsandfooddistributorsintheUnitedStates,theEuropeanUnionandourothermajormarkets,continuetoconsolidate.Theseconsolidationshaveproducedlarge,sophisticatedcustomerswithincreasedbuyingpower.Theselargerretailers,capableofoperatingwithreducedinventories,canresistpriceincreasesanddemandlowerpricing,increasedpromotionalprogramsandspecificallytailoredproducts.Theyalsomayuseshelfspacecurrentlyusedforourproductsfortheirownretailerbrands.Theconsolidationofretailcustomersalsoincreasestheriskthatasevereadverseimpactontheirbusinessoperationscouldhaveacorrespondingmaterialadverseeffectonus.Also,ourretailcustomersmaybeaffectedbyrecenteconomicconditions.Forexample,theymaynothaveaccesstofundsorfinancingandthatcouldcausethemtodelay,decreaseorcancelpurchasesofourproducts,ortonotpayusortodelaypayingusforpreviouspurchases.

    During2008,ourfivelargestcustomersaccountedforapproximately27%ofournetrevenues,withourlargestcustomer,WalMartStores,Inc.,accountingforapproximately16%ofournetrevenues.Therecanbenoassurancethatallsignificantcustomerswillcontinuetopurchaseourproductsinthesamequantitiesthattheyhaveinthepast.Thelossofanyoneofoursignificantcustomersoramaterialreductioninsalestoasignificantcustomercouldhaveamaterialadverseeffectonoursalesandresultsofoperations.

    Increasedpricevolatilityforcommoditieswepurchasemayaffectourprofitability.

    Weareamajorpurchaserofcommodities,includingdairy,coffee,cocoa,wheat,cornp