America's Favorite Chocolate Maker Raising Prices

07.16.14 | Sarah Harnisch

A not so good news for chocolate lovers around the world: America's leading candy and chocolates producer Hershey Co announced an overall 8 percent price increase for its chocolates.

That means buying your favorite Kit Kat or Reese will now cost more but Hershey said it has decided to raise the prices of its chocolates to cope up with the rising prices of cocoa.

The price increase was a first for the company in three years and analysts believed the year-long increase in the price of cocoa in the market has already affected Hershey's profits.

The American confectioner last raised its prices by 9.7 percent in the United States in 2011.

Michele Buck, Hershey's North America head, said the increase in the prices of the confectioners' chocolates was needed as spot prices for ingredients - cocoa, nuts and dairy - have risen since the beginning of 2014.

Prices of cocoa futures soar to near-three-year high early this month due to worries that demand would outpace supply from West Africa, the world's top cocoa growing region.

Hershey's packaged candy and grocery products will also be affected by the increase but Buck said it will not have an effect on Hershey's earnings until 2015.

Chocolate lovers, however, have until 12 August to buy Hershey's chocolates at the pre-increase prices. But they have to buy the chocolates directly from the company, Hershey said in a statement.

Experts said the price increase announcement by Hershey is expected to trigger price increase announcements by its competitors, including Kraft Foods Group and Nestle SA, although increases in the industry are usually often in a quiet manner.