Why Chocolate Price Rises?

It seems that chocolate feeders will have to endure hard times since the world is already in its deep remorse while the economy is pumping out pressure of depression. As an effect, companies like in chocolate industry have to employ remedies of survival as it is predicted that economic revival will have to take longer. The world's government entities on the other hand are in close monitoring of economic activities to ensure that well being of consumer is protected. For the past months, there have been news featured chocolate price hikes all over the world that have caught attention to chocolate enthusiast. The news have provided us a bit of facts about the current situation and how its is affecting our lives.

Some important news is here for your information.

Eaurope Chocolate Companies Suspected of Price-Fixing

"German officials investigating possible chocolate price-fixing have raided the offices of some of Europe's biggest confectionery companies.

Nestle, Mars and Kraft confirmed that competition officials visited their German headquarters last Thursday.

Four other chocolate companies were also examined by the German Federal Cartel Office.

Nestle said it was cooperating with authorities and that price rises were due to rising costs of raw materials.

"There have been, worldwide, hefty increases in the price of cocoa. That naturally leads to the adapting of prices," Nestle spokesman Francois Perroud said.

The investigation was prompted by suspicions the companies had colluded on prices in the German market."

Canadian investigation

It is the second recent investigation into the chocolate industry.

Last November, Canadian regulators launched an investigation into allegations of price-fixing.

Canada's Competition Bureau said it was looking into chocolate products but the investigation could be widened to examine other types of sweets.

Cadbury Warns of Rising Chocolate Prices

Cadbury, the British confectionery giant, announced today that 250 jobs will go as part of a cost-cutting programme and warned that the price of chocolate will rise next year due to higher commodity prices.

The company, which receives more than 80 per cent of its revenues from outside the UK, also said today that it would put more focus on its international operations by changing its reporting structure.

Its previous four-region management structure will be replaced by seven to reflect continued growth in areas such as Latin America. This will effectively remove a layer of management and many of the job losses are expected to come from this change.

Cadbury demerged its drinks business Schweppes one year ago and has since introduced a plan called "Vision into Action", which is designed to increase the food company's profit margins. It is investing £650 million to increase its margins into "the mid teens" by 2011.

In a third quarter trading update, Cadbury said that its revenue growth in emerging markets was 13 per cent compared to an overall increase of 6 per cent. Its guidance for the full year was unchanged.

However, it did warn of higher product prices next year as input costs for 2009 were already 6 to 8 per cent higher than this year.

Cadbury said: "We continue to expect further cost pressures in 2009, particularly in respect of cocoa costs.

"Consequently, we are in the process of implementing price increases in most of our major markets to cover the impact of these future cost rises."

Todd Stitzer, chief executive of Cadbury, said: "Our new streamlined organisation, together with additional cost reduction initiatives, will increase the focus on implementing our strategic plans and underpin delivery of our margin targets.

"Despite weaker economic conditions, we expect strong profit growth for the year and reconfirm the revenue and margin guidance we gave in July."

Cadbury announced last week that Ken Hanna, its chief financial officer, would step down next April after five years with the company. Mr Hanna oversaw the demerger of the confectionery giant from its US soft drinks business. He will become chairman of Inchcape, the UK car dealer where he has been a non-executive director since 2001.