Hershey Unwraps Higher Candy Bar Prices

Hershey Chocolate U.S.A. announced Monday that it is increasing the wholesale price of its standard Hershey candy bars and king-size bars by 11%, a move expected to lead to price increases at the candy counter.

A spokeswoman for Hershey Foods Corp., parent of Hershey Chocolate, said that although the manufacturer does not set or regulate retail prices, based on past practices, retailers will probably raise prices about 5 cents on a standard 1.55-ounce Hershey chocolate bar.

The company said the wholesale price increase is the first it has implemented in five years and that it results from “the cumulative impact over these five years of increased costs for packaging, fuel, transportation, labor and benefits, as well as rising costs of materials.”

Spokeswoman Natalie Bailey said the wholesale price increase translates to about 3.25 cents per bar. Currently, the average retail price for a standard Hershey bar is 45 cents.

Bailey said double-digit price increases in some of the basic costs of the ingredients, including raw cacao beans (which are ground into cocoa powder) and almonds, were behind the decision, along with the other accumulating costs.

But commodity and equity analysts alike said the cost of cacao beans should not have played much of a part in the decision.

“I don’t think it’s fair to blame it on the cocoa,” said Joe Arata, commodities analyst at Merrill Lynch, adding, “Actually, cocoa prices are down a little bit” over the past year.

Hershey’s stock rose $1 to $64 on the NYSE.