Hershey announces price hike
Hershey has announced an increase in wholesale prices across its US, Puerto Rico and export chocolate and sugar confectionery lines.
A weighted average 11 per cent increase on the company’s instant consumable, multi-pack and packaged candy lines will help offset some of the significant increases in the company’s input costs, including raw materials, packaging materials, fuel, utilities and transportation.
“Commodity costs have been volatile over the last several years and continue to remain at levels that are well above historical averages,” said David West, president and chief executive officer. “Market prices for ingredients such as cocoa, corn sweeteners, sugar and peanuts are up 20 to 45 per cent since the beginning of the year. As such, in 2009 we expect our commodity cost increase to be more than double the 2008 increase.
“This additional increase, as well as the timing and slightly higher trade promotion expense related to the price increase, will be reflected in our third quarter results. We remain committed to the higher levels of brand support, consumer investment, retail coverage and merchandising in both 2008 and 2009 that we previously communicated.
“For the full-year 2008, we continue to expect net sales growth of 3-4 per cent. Consumers are likely to see higher every day and promotional retail prices as we implement the price increase and, as a result, we expect volume in the fourth quarter and next year to be lower than previously estimated. In 2009, we expect net sales growth of 2-3 per cent versus our previous projection of 3-5 per cent. We will focus on productivity and other initiatives to offset a portion of the higher input costs and increased consumer investment.”
