Hershey navigates tariff tensions amid cocoa cost surge
Hershey, the well-known chocolate manufacturer, is negotiating with the administration of U.S. President Donald Trump regarding tariffs. The company seeks an exemption from cocoa tariffs. The chocolate giant estimates that due to these restrictions, it will be forced to use its reserves, generating additional costs reaching CAD 27 million.
The issue is that cocoa is not grown in the U.S., which forces Hershey to import the raw material (mainly from the Ivory Coast and Ghana). Additional tariffs could significantly impact chocolate prices.
Hershey warns of rising chocolate prices
Hershey (the producer of popular candies such as Kisses and Reese's Peanut Butter Cups) informed investors about a potential increase in production costs. In the second quarter of 2025, tariffs could increase the company's expenses by CAD 20-27 million. However, in the following months, costs could rise by as much as CAD 133 million.
The Pennsylvania-based company is working intensively with the U.S. government and trade organizations, attempting to convince the Trump administration to exclude cocoa from the list of tariffed goods.
Currently, basic tariffs on cocoa are around 10 percent. However, the U.S. President has threatened to impose additional retaliatory tariffs of 21 percent on the Ivory Coast, which would be the highest level among West African countries.
In addition, Canada, an important partner in cocoa processing, has also imposed retaliatory tariffs, posing an additional challenge for companies in the U.S., including Hershey, which is the fourth-largest chocolate producer by revenue (CAD 13.7 billion in 2023).
Cocoa troubles. Producers alter prices and compositions
Tariffs are not the only problem for candy manufacturers. High cocoa prices result from challenging weather conditions, crop diseases, and growing demand. At the turn of 2024 and 2025, cocoa beans had to be purchased at a record price of CAD 16,300 per tonne on the exchanges.
