Unilever has announced a significant price increase for its chocolate products, set to take effect next month. The company cited a sharp rise in global cocoa prices as the driving force behind the price hike, with some products seeing an increase of up to 16%.
In a letter sent to retailers, Unilever informed them of an update to its chocolate product price list, explaining that the decision was made in response to the "extraordinary and ongoing increase in cocoa prices worldwide." The company noted that cocoa prices had surged by more than 100% in the past year alone, making it impossible to continue absorbing the escalating production costs.
"As a result, we are forced to update the price list for products in the chocolate category only," Unilever stated in the letter.
Price Increases to Affect Vered HaGalil
The price hikes will apply to various chocolate products, including popular brands such as Vered HaGalil and Click. Unilever confirmed that the average price increase across all chocolate products will be 14.7%, with individual product prices rising by between 12% and 16%.
This marks a significant adjustment for consumers, who have already been grappling with rising food costs in recent months. The increase follows a similar move by rival food company Strauss, which also cited soaring cocoa prices as the reason for its own price hikes.
Strauss Announces Fourth Price Increase in Two Years
Strauss, a leading food manufacturer in Israel, made headlines last week with its announcement of a fourth price increase in just two years. The company revealed that it would raise the prices of chocolate and coffee products by up to 18%, citing a dramatic rise in the cost of raw materials, particularly cocoa and coffee, over the past year.
Strauss attributed the price hikes to a "jump of hundreds of percent" in the cost of these key raw materials, a trend that has continued in recent years. Like Unilever, Strauss has expressed its inability to absorb the rising production costs and has been forced to pass them on to consumers.
Global Cocoa Prices Surge
The price increases from both Unilever and Strauss reflect the broader challenges facing the food industry, particularly about cocoa. The cost of cocoa has been rising sharply due to factors such as supply chain disruptions, adverse weather conditions in major cocoa-producing regions, and growing global demand.
The ongoing surge in cocoa prices has affected not only chocolate manufacturers but also other sectors reliant on cocoa as a key ingredient. As a result, consumers are seeing price hikes across a range of chocolate products, from everyday treats to premium brands.
Impact of Price Increases on Consumers
The latest round of price hikes is likely to add to the financial strain felt by consumers, particularly in the wake of the ongoing cost-of-living pressures. Food prices in Israel have already risen by an average of 5% during the ongoing war, further exacerbating inflationary trends.
Despite calls for price controls to address the rising cost of food, experts caution that such measures may not be sufficient to resolve the underlying issues driving inflation, particularly in commodity markets like cocoa and coffee.
As Unilever and Strauss move forward with their price increases, consumers are left to navigate the rising cost of essentials, with no immediate relief in sight.
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