The multinational was contacted for comment yesterday after workers were seen putting up scaffolding around the 87-year-old chimney.
Its height is about 20m.
A Mondelez spokeswoman said the chimney height had to be reduced for ''safety reasons and earthquake-strengthening requirements''.
''We will redesign the top of the shortened chimney to ensure it is in keeping with the heritage appearance of the Old Dairy and surrounding buildings.
''For safety reasons and earthquake-strengthening requirements, the height of the chimney needs to be reduced to 3m,'' the spokeswoman said.
The work is part of the $3 million Cadbury World redevelopment, the company said.
The tourist attraction is shifting from Cumberland St into the old Dairy Building, which is on the Castle St side of the site.
The old chimney has not been used for many years.
Dunedin industrial heritage advocate Ann Barsby, who did not know about the work until contacted by the Otago Daily Times, was sad to hear about it.
''I don't like seeing industrial heritage being lost.
''There are very few chimneys left in Dunedin; Dunedin used to be full of chimneys with all the various industrial sites. I hope it's with good reason,'' Mrs Barsby said.
The Cadbury factory will close early next year with the loss of about 360 jobs. Only Cadbury World will remain.
