Choc shock: Price rise leaves consumers sour at checkout
There's a global shortage of cocoa, with a spike in chocolate prices expected to hit soon.
A sweet block of chocolate could soon leave a sour taste in shoppers’ mouths at the checkout with skyrocketing cocoa prices poised to reach Australian shores.
A global cocoa shortage stemming from disappointing harvests in West Africa, which sources 70 per cent of the world’s cocoa, is triggering price rises in chocolate, according to a report by agricultural lender Rabobank.
“Significantly higher chocolate prices will likely hit shelves over the coming months and going into 2025, providing a major challenge for the chocolate sector, which is already battling a longer-term, structural decline in demand,” the report said.
Commodity prices have hit their highest levels in nearly 50 years as cocoa stocks sunk to their lowest in 22 years, pushing producers and manufacturers to pass on costs to consumers.
Despite prices already increasing, Rabobank’s analyst Paul Joules said the full force of the cocoa crisis was likely yet to be felt on supermarket shelves globally.
Snacks and confectionery year-on-year inflation costs had already increased by 4.6 per cent in the June quarter consumer price index and if combined with the June 2023 quarter, cumulative inflation increases reached 21.8 per cent, according to the Australian Bureau of Statistics.
“Due to the lag in the supply chain and existing contracts, the steepest price hikes are anticipated in the second half of 2024 and into 2025,” Joules said on Thursday.
“Chocolate manufacturers are struggling with soaring cocoa costs, which are reflected in higher local retail prices for chocolate.”
Manufacturers are also turning to shrinkflation – reducing package sizes while maintaining prices – and skimpflation – using less cocoa and more fillers – to combat rising costs.
Consumers were likely to switch between chocolate types and brands, including private or alternative items, which was expected to leave a significant drop in demand, the report said.
The cocoa price shock came as a government-funded report by consumer advocate Choice found there was almost no difference between grocery prices at the two major supermarkets.
If also follows the announcement on Monday by the Australian Competition and Consumer Commission that it was taking Coles and Woolworths to court over allegations they lied to customers with misleading specials.
-AAP