Chocolates disappear from shelves amid price war and cocoa crisis

In Germany, the ongoing price battle between retailers and manufacturers intensifies, affecting popular brands like Milka chocolate and other confectionaries. This has been highlighted by Deutsche Welle, referencing the German trade publication "Lebensmittel Zeitung."

Recently, customers at Rewe supermarkets across Germany have encountered shortages of sweets from household names such as Milka, Oreo, and Tuc. This shortage has been attributed to a pricing dispute between the supermarket chain and the American food conglomerate Mondelez. The standoff ensued after Mondelez reportedly ceased deliveries to Rewe, which refused to meet its price demands. Neither party has publicly commented on the disagreement.

The underlying issue appears to be the surge in global cocoa prices. Between January and February, cocoa prices soared by twenty percent and have doubled compared to the previous year. Chocolate manufacturer Lindt has already indicated that it will be raising its prices this year and the next due to these cost pressures.

A spokesperson for Ritter Sport provided some insight two months ago on the matter, highlighting the challenges facing the industry.

Not limited to any one region, the ripple effect of rising cocoa prices is felt globally, with American company Hershey and the food behemoth Nestle not dismissing the possibility of further sweet price increases. What's causing the worldwide escalation in cocoa prices?

The primary driver behind this is the persistent mismatch between demand and supply. According to Aleksandra Kusz vel Sobczuk, Corporate Communications and ESG Manager at Lotte Wedel, the current cocoa harvest season, which spans from October to September, is projected to be the third consecutive year of shortfall, failing to satisfy global demand.

Like other producers, Lotte Wedel is grappling with the impact of higher cocoa costs. Kusz vel Sobczuk explained that balancing demand with the available supply of cocoa, all while ensuring the quality of their offerings, may necessitate price adjustments. She added that such changes are likely to dampen demand, but the extent of the impact remains uncertain given the unpredictable nature and duration of cocoa price volatility.