This is the worst of all possible worlds: Satisfying your chocolate addiction is about to cost you more - and Hershey (HSY) says the price increase will slow future growth.The subprime mortgage mess and oil prices are just the way of the world. But chocolate?
Apparently even a sweet escape isn’t immune to market forces. Damn capitalism!
Hershey raised wholesale prices about 10% to offset the cost of raw materials and fuel, the Wall Street Journal reports.
Commodity prices have bounced around for the last few years and remain above historical averages. The price of basic ingredients such as cocoa, corn sweeteners, sugar and peanuts have increased 20% to 45% since the first of the year.
There’s no reason to think competitors Cadbury (CBY), Nestle (NSRGY) and Mars will be exempt. But if you can afford big-ticket chocolate (starting at about $2,600 a pound), there’s no need to fret about being nickeled and ten-percented to death.
Hershey says it expects earnings for 2008 to be at the low end of its forecast of $1.85 to $1.90 a share. The candy maker expects net sales growth to be 3% to 4% for the year as the price increases erode sales. Earnings-per-share growth is expected to be less than the long-term target of 6% to 8%.
Looking ahead to 2009, Hershey looks for net sales to increase 3% to 5%.
Call it the sweet horror of chocolate passion.





















