December 18, 2007The Board of DirectorsCadbury Schweppes plc25 Berkeley SquareLondon W1J 6HBUKDear Board Members:Investment funds and accounts managed by Trian Fund Management, L.P. (collectively,“Trian”) own interests in approximately 4.5% of the outstanding shares of Cadbury Schweppesplc (“Cadbury” or “the Company”). Trian has recently increased its position from approximately3.5% after forming an investment group with Qatar Holding LLC, a sovereign wealth fund. Wehave increased our position because we continue to believe that Cadbury’s implied targetvalue per share could be as high as 970p, nearly 60% above the current share price, assumingthe Company successfully executes on the plans outlined below.As you know, Trian has engaged in a regular dialogue with Cadbury’s management andcertain members of the Board for the past nine months and supports many of the Company’sannounced plans. Trian is nevertheless concerned that recent management updates toshareholders on the performance of the business seem to be followed by declines in the shareprice. This was the case after last week’s trading update (the stock price has since fallen 32p)and was also the case following the August 1

release of interim results (the stock price fell51p, the largest one-day decline in more than 15 years). We believe this trend signals thatmanagement’s credibility with the Company’s shareholders is still very low.Of course, the most important barometer of management credibility is how the market valuesthe shares in the context of management’s operating and financial targets. If the Companywere to successfully execute its own previously announced initiatives, we believe the currentimplied target value per share should be approximately 741p to 846p, depending on thevaluation multiples the market ultimately assigns to the beverage and confectionarybusinesses (see Appendix I). Most of this potential value creation comes from management’splan to increase confectionary margins by approximately 500 basis points to levels closer towhat most food companies achieve, reaching mid-teen margins by 2011. That the sharescontinue to trade at a 22% to 39% discount to the values implied by management’s plan

suggests the market is skeptical and has discounted virtually any potential for marginimprovement.Trian believes management’s multi-year margin improvement initiative is readily achievable; infact, we view it as too little improvement over too long a time period. Based on this plan,confectionary margins in 2011 would remain hundreds of basis points lower than what otherleading confectionary companies, including Wrigley and Hershey, currently achieve. Instead,Trian believes Cadbury should be able to achieve mid-teen margins by 2009 and best-in-class,or high-teen margins by 2011. By so doing, Cadbury can create substantial incremental valuefor shareholders.Trian believes the current management team and Board have made sound strategic judgmentsin the past, including the acquisition of Adams and the recent decision to separate thebeverage and confectionary businesses. And notwithstanding various operational problemsthat have arisen under the current leadership team, including salmonella issues in the UK,fraud in Nigeria and under-deliverance on past margin targets, Trian continues to believe thatthe current management team is capable of achieving its plan as well as the actions we areproposing. However, should Cadbury fail to demonstrate meaningful operational progress in2008 that translates to the bottom line, Trian will look to become significantly more active inevaluating all of our alternatives as a large shareholder.To fully restore credibility, we urge Cadbury to take the following specific actions that webelieve are critical to demonstrating that management is on track to deliver improvements inthe business and that the Board is committed to holding management accountable andincreasing shareholder value:

1. Set near-term margin targets for the confectionary business

that demonstratemeaningful improvement will be made beginning in 2008. Currently, the Company hascommitted to improve confectionary operating margins from approximately 10% in 2007 tothe “mid-teens” by 2011. However, without specific 2008 margin targets, the Board cannothold management accountable and shareholders will continue to discount the potential forany margin progress. We would suggest that full year 2008 guidance for confectionarymargins should target at least 175 basis points of improvement, given that much of thegroundwork for future cost reduction has been laid in 2007. Management should deliverquarterly updates throughout next year confirming that it is on track to deliver on thesetargets.

2. Increase medium and long-term confectionary margin goals

to target achieving mid-teen margins by 2009 and high-teen margins by 2011. Trian believes management’scurrent goal of achieving only mid-teen margins by 2011 is unacceptable, as it producestoo little improvement over too long a time period. Based on our extensive due diligence onCadbury, as well as Trian and its principals’ track record of fixing operations atunderperforming companies, we see no structural impediment to Cadbury achievingmargins that are at least as high, if not higher, than its confectionary peers.

3. Continue cost reduction efforts and transformation of beverage business.

Set a goalto improve beverage margins at least 300 basis points by eliminating duplicative central

costs, simplifying the organizational structure, executing on acquisition synergies andextracting manufacturing and distribution efficiencies. We also believe that the Companyshould consider divesting certain businesses following the spin, including Motts, Clamato,ReaLemon, ReaLime and Rose’s. These businesses add manufacturing and operationalcomplexities, are distributed primarily through a different channel (grocery) than much ofthe remaining portfolio but are nevertheless outstanding brands that we believe haveconsiderable market value.

4. Add several new directors to the Board

with relevant industry backgrounds andexperience overseeing operational turnarounds, improving margins and creatingmeaningful long-term shareholder value. As you know, Trian has already suggestedseveral well-regarded candidates for consideration whom we believe would be willing toserve as directors. We believe Cadbury should strengthen the Board now, in advance ofseparating the beverage and confectionary businesses. Depending on these new directors’areas of expertise, they should continue to serve on either the beverage or confectionarycompany’s board once the businesses are separated. Lastly, since the non-executiveChairman has announced he will be retiring next spring, we believe a Chairman in-waitingshould be named now to provide visibility for the market and ensure an orderly transition.

5. Recapitalize the balance sheet and return capital to shareholders.

Despite continuedinvestment, the confectionary business remains a strong free cash flow generator.Likewise, the beverage business generates exceptional free cash flow and will most likelycommand an attractive valuation in the market that would be enhanced by optimizingcapital efficiency. We recommend leverage multiples (net debt / EBITDA) of 4.75x forbeverage based on our 2007 forecasts and at least 2.50x for confectionary based on our2008 forecasts. We urge Cadbury to announce plans for a recapitalization now to furtherstrengthen the Company’s commitment to drive shareholder value by leveraging futuremargin improvement. We have already discussed with you the potential to use excesscash from the recapitalization to pay a special dividend. Another alternative would be tohold back some cash to repurchase shares of the beverage business post-spin, takingadvantage of any short-term dislocation in its share price due to flowback. Based on thesebusinesses’ strong free cash flow profiles, we believe they can comfortably support theseproposed debt levels while also maintaining ample flexibility to fund future growth and costsaving initiatives.If management and the Board fail to make progress in the coming months on their initiativesand the plans we have outlined, Trian will look to become significantly more active inevaluating all of our alternatives as a large shareholder. If these targets are not achieved, wealso believe there is a reasonable probability that matters will be taken entirely out of thehands of the Board and management, as the Company’s underperforming standalonebeverage and confectionary companies may well become acquisition targets. As long-termshareholders who believe in the enormous potential for value creation at both of thesebusinesses, we would view this last outcome as disappointing for all of Cadbury’sstakeholders.Trian has attached to this letter an overview of our investment thesis and additional detail onthe actions we believe the Company should take to enhance shareholder value (see Appendix