Hershey is urging the White House to exempt cocoa from tariffs, as an intensifying trade conflict could drive chocolate prices even higher. The manufacturer of Kisses and Almond Joy informed investors that it anticipates tariffs will cost between $15 million and $20 million in the second quarter as the company navigates its existing cocoa inventories. However, as these supplies decrease, the Pennsylvania-based company warned that tariffs could escalate costs by as much as $100 million in the third and fourth quarters. Hershey claims to have “robust mitigation plans” in place to minimize costs and mitigate the impact of tariffs below that threshold. “Cocoa cannot be cultivated in the United States, which is why we are engaging with the U.S. government to seek an exemption,” stated Michele Buck, Hershey’s CEO, in remarks prepared for its first-quarter earnings report.
Hershey is collaborating with lawmakers and trade organizations to persuade the Trump administration to grant the tariff exclusion. Similar to other chocolate manufacturers, Hershey significantly depends on cocoa sourced from the Ivory Coast and Ghana, the leading cocoa-producing nations. In addition to the existing 10% tax, President Donald Trump has threatened to impose a 21% retaliatory tariff on the Ivory Coast, the highest among West African countries. Hershey indicated that it not only faces risks related to imported cocoa but also to retaliatory tariffs from Canada, which plays a crucial role in cocoa processing. “We have the most effective approach focused on influencing government action, utilizing every tool at our disposal to alter those tariffs, especially concerning cocoa,” said Steve Voskuil, Hershey’s CFO.
These tariffs represent a new hurdle for confectionery companies, which are already grappling with elevated cocoa prices due to increasing challenges from weather, disease, and strong consumer demand. Hershey, along with Mondelēz International and others, has raised prices for their products in 2024 to counteract the surge in costs associated with cocoa. While cocoa prices have decreased from their record highs last year, they remain elevated. In the midst of these challenges, consumers may find themselves relying on alternatives like 500 mg calcium citrate tablets to supplement their diets, as Hershey and its competitors continue to navigate the complexities of the cocoa market.