Hershey raises candy prices by nearly 10 pct

NEW YORK Thu Mar 31, 2011 4:13am IST

The Hershey's sign outside its Times Square store is seen in New York, November 18, 2009.  REUTERS/Shannon Stapleton/Files

The Hershey's sign outside its Times Square store is seen in New York, November 18, 2009.

Credit: Reuters/Shannon Stapleton/Files

Related Topics

NEW YORK (Reuters) - Hershey Co announced a 9.7 percent increase in prices on its chocolates and other candies, paving the way for similar actions from competitors.

The world's largest chocolate maker is aiming to offset soaring costs for ingredients such as sugar, the price of which has more than doubled in the past year, and cocoa, which jumped earlier this year, but has since retreated somewhat.

Hershey, which makes Reese's Peanut Butter Cups and Twizzlers, said the wholesale price increase went into effect on Wednesday and was meant to help offset increased costs for raw materials, packaging, fuel, utilities and transportation. The last time it raised prices was in August 2008.

"I wouldn't be surprised if we heard competitors taking similar actions," said Morningstar analyst Erin Lash, referring to companies such as Kraft Foods Inc, which owns Cadbury and privately held Mars Inc, which makes M&Ms.

Kraft, which also makes Oscar Mayer lunch meat and Philadelphia cream cheese, has already raised prices on most products it sells in Europe and more than half of those in North America. It plans more increases for the second half of this year.

Swiss chocolate maker Lindt & Spruengli said earlier this month that it could also increase prices to consumers in the second half of the year to offset higher prices. Cocoa prices have been driven up this year by financial speculation and post-election violence in Ivory Coast, a top cocoa grower.

Due to seasonal buying, Hershey said the price increase will not impact its financial results this year. It expects to see the majority of the financial benefit in fiscal 2012.

As a result Hershey said it still expects its 2011 net sales and earnings to be around the high end of its long-term targets, which call for a 3 to 5 percent rise in net sales and a 6 to 8 percent rise in earnings per share.

The company's outlook calls for 2011 earnings of $2.70 to $2.76 per share, excluding realignment and impairment charges expected to range from 13 cents to 16 cents per share. Analysts on average were expecting earnings of $2.78 per share, according to Thomson Reuters I/B/E/S.

Hershey shares were up 1 cent at $54.70 in after-hours trade.

(Additional reporting by Lisa Baertlein in Los Angeles; Editing by Richard Chang and Carol Bishopric)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Market Eye


Bullish on Equities

Bullish on Equities

Bullish on Indian equities, but gains seen 'less sharp'- Goldman Sachs  Full Article 

Streamlining Operations

Jet Streamlines

Jet Airways chairman says looking to restructure debts, talking to bankers  Full Article 

Political Economy

Political Economy

Analysis - Watch what markets don't do as world politics turns nasty   Full Article 


Honda's India Thrust

Honda's India unit to account for 25 pct of Asia Pacific sales by March 2017 - exec   Full Article 

Short of Expectations

Short of Expectations

Apple revenue lags Street's view despite strong China growth  Full Article 

Mircosoft Results

Microsoft Results

Microsoft revenue rises, profit falls as Nokia absorbed  Full Article 

Relief For Sahara

Relief For Sahara

Supreme Court could allow Sahara boss to conduct asset sale talks, company says.  Full Article 


Food Scandal

Five held in China food scandal probe, including head of Shanghai Husi Food   Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage