Are chocolate-makers getting a sweetheart deal?
Never mind that it's beyond cliche: That heart-shaped box of chocolates will likely set you back more than usual this Valentine's Day. The price of cocoa hit a 23-year high this week, bad news for those whose beloveds are expecting at least some of their V-Day kisses to come from Hershey.
Chocolate-lovers aren't taking the news well: According to the Associated Press, feds in three different countries are investigating price-fixing among candy-makers, sparking retailers and consumers to file lawsuits accusing the world's biggest chocolate companies of violating antitrust laws. The lawsuits allege that companies from Hershey to Mars, which have the biggest hold on America's sweet tooth, to lesser players like Nestle and Cadbury Schweppes have formed an international cartel to decide when and by how much to raise the price of their products. The investigation into this confection conspiracy spans the globe from North America (the U.S. and Canada) to Germany.
The folks at Hershey argue that the price increases are necessary in light of the rising cost of dairy items used in their milk chocolate; the company used this argument to justify raising its candy bar prices by 13% last month. But investigators from the German Cartel Office say they suspect Hershey, Nestle and Mars of conspiring to raise their prices higher than what was necessary to cover the cost of raw materials. And investigators in Ontario claim top execs from these three companies held secret meetings to set prices.
This alleged skulking around by the folks who brought you Snickers and M&Ms hasn't soured investors on the bean from which all chocolate is created. The day before Valentine's Day, cocoa futures closed at their highest level since April 1985. How sweet it is.