Sweet turns to sour: emotions rise at Hershey

The planned sale of Hershey Foods is expected to come under fire on Friday from a broad coalition of the confectionery maker's hometown neighbours, including workers, politicians, reform activists and ordinary citizens.

A crowd scheduled to gather for a midday protest rally in Chocolate Town Square was expected to include five former executives of the company that gave the world the Hershey chocolate bar and Hershey's Kisses, including former Chairman and Chief Executive Dick Zimmerman.

"We really consider this move to be both unnecessary and unwise,"​ Zimmerman said ahead of the rally.

The protest is being organised by the National Hershey Association, a Hershey Trust watchdog group which includes members of the Hershey family.

The proposed sale of the 108-year-old confectionery company in Hershey, Pennsylvania was announced last week by the Hershey Trust Co., a powerful corporation with trust duties.

With $5.4 billion (€5.46bn) in assets, the Hershey Trust controls 77 per cent of Hershey Foods' voting power and could strike a deal worth up to $12 billion with a buyer. Potential suitors include Kraft Foods, Nestle and Cadbury Schweppes.

But the plan has fallen under increasing criticism from opponents that not only include former executives but Milton Hershey School alumni, public figures and small business owners who fear a wave of job losses and plant closings should a sale go through.

Many of the community's 12,000 local residents owe their livelihoods to Hershey Foods, either directly or indirectly. The trust has acknowledged that the community has legitimate concerns about the potential effects of a sale but has not committed itself to requiring a buyer to maintain operations in the town.

Opposition leaders say their best hope is that Pennsylvania Attorney General Mike Fisher will act to prevent the sale. Earlier this week, his office announced a reform agreement with the Hershey Trust and Milton Hershey School to eliminate possible conflicts of interest for school board members.

Fisher, a Republican who is running for state governor, has said he opposes the Hershey sale. Activists hope pressure from rank-and-file Republicans who make up the vast majority of local voters will prompt action by Fisher, who has oversight over charitable trusts as attorney general.

A spokesman for Fisher's office said the attorney general was not expected to attend Friday's rally.

While trust officials say the sale must take place to diversify its holdings, of which Hershey stock accounts for 52 per cent, critics claim the proposal fails to live up to the vision of Milton Hershey, the company's Mennonite founder who established the trust as a vehicle for philanthropy.

"That (vision) includes protecting the local economy from this plan they've announced,"​ said Ric Fouad, a New York-based commercial litigation attorney who is president of Milton Hershey School Alumni Association.

The plan to sell off Hershey Foods also threatens to upset the company's delicate relationship with Chocolate Workers Local 464 of the Bakery, Confectionary, Tobacco Workers and Grain Millers International union, which ended the company's first strike in 22 years last June.

"The officers, executive board and members of Local 464 will do everything we can to derail the sale of Hershey,"​ said Bruce Hummel, business agent for the union that represents about 2,800 blue-collar workers.

Aside from Hershey's future, economist Michael Zweig said the sheer breadth of opposition to the sale could have wider implications for the United States if public sentiment toward corporate power continues to harden in the wake of monumental bankruptcy filings by Enron Corp. and WorldCom Inc.

"This is something that often happens where corporations act in ways that threaten an entire community. But in this climate, people may appreciate it better,"​ said Zweig, a professor at the State University of New York, Stony Brook.

"What you've got is a whole range of forces unified into something we're going to see more of,"​ he added.