Kraft undertook a global review and made the decision without any pitches. The move, designed to cut costs, reduces Kraft's roster from four networks to three.
The loss will come as a shock to Y&R, whose chairman and chief executive, Ann Fudge, joined the network from Kraft last year. She had been the president of Kraft's beverages, cereals and desserts division following the merger with General Foods.
The realignment means Y&R has lost several pieces of business across Europe. The agency's Paris and Frankfurt offices had shared the bulk of the advertising, which incorporated Kraft's Milka, Lacta and Suchard brands along with its regional coffee products. In the UK, Rainey Kelly Campbell Roalfe/Y&R loses the Toblerone account.
It is understood that account handling and planning for some of these brands, overseen at various European offices, could be relocated to O&M in London. However, there are currently no plans to launch the brands in the UK.
Terry's, Kraft's other main chocolate range, will continue to be held by DDB London. Kraft's other roster network FCB remains unaffected.
JWT has been handed Kraft's cheese and coffee brands in Italy and Spain.
Kraft realigned its media services earlier this year, moving its media planning and buying account out of ZenithOptimedia and into Starcom Mediavest.
The company has come under pressure to emphasise the nutritional benefits of chocolate in response to concerns over obesity. Last month it hired Burson-Marsteller to explore the prospect of promoting the health credentials of its chocolate products.