Mondelez International, which owns Cadbury, said it was no longer able to absorb the increasing production costs from manufacturing in Dunedin and would be closing in 2018, leaving about 350 people facing an uncertain future.
Staff were told of the closure at a meeting on site at 10am today and 200 people would be made redundant by the end of this year.
Whittaker's marketing manager Holly Whittaker said today the company had no plans to move its manufacturing overseas.
"Whittaker's has been New Zealand-owned for more than 120 years, and we are committed to manufacturing all of our chocolate from our one factory in Porirua, which enables us to ensure quality by controlling the whole process, from bean to bar," Ms Whittaker said.
"Our thoughts are with the Dunedin community, and we wish everyone the best in dealing with this situation."
University of Otago marketing professor Juergen Gnoth said the closure was likely to benefit Whittaker's, adding that Mondelez was underestimating the loyalty of New Zealand consumers.
"There is obviously a local impact from this and with regards to the national impact I think Cadbury will definitely lose a lot of customers which will give Whittaker's a boost," Prof Gnoth said.
"Something these corporations hardly ever consider is loyalty. People are thinking more global, but acting more local, and I think this trend will come through here as well."
Prof Gnoth said this had become apparent during discussion around the use of palm oil and its effect on rainforests, with resistance coming from loyal, local customers.
He described the move by Mondelez as short-term thinking.
"New Zealanders are very loyal and particularly I think when it comes to food products," he said.
"I think [Mondelez] are not looking at this trend enough."
