Hershey pushes for cocoa tariff exemption amid rising chocolate costs
Hershey is working with lawmakers and trade groups to advocate for the exemption.
USA – Pennsylvania-based Confectionery Company has called on President Trump’s administration to exempt cocoa from tariffs as an escalating trade war could push chocolate prices even higher.
The Reese’s manufacturer told investors it expects tariffs to cost between US$15 million and US$20 million during the second quarter as the company works through existing cocoa inventories.
The company added that as those stockpiles dwindle, tariffs could increase costs by up to US$100 million in the third and fourth quarters.
“Cocoa cannot be grown in the United States and thus, we are engaging with the USA government to seek an exemption,” Michele Buck, Hershey’s CEO, said during the first-quarter earnings meeting.
Hershey, like other chocolate companies, largely relies on the Ivory Coast and Ghana in West Africa, which are the world’s top cocoa producers.
In addition to a base 10% tax already in effect, President Donald Trump has threatened 21% retaliatory tariffs on the Ivory Coast, the highest among West African nations.
Hershey said it not only faces exposure to imported cocoa but also on retaliatory tariffs put in place by Canada, which is an important player in cocoa processing.
Steve Voskuil, Hershey’s CFO, said, “We’ve got the most effort focused on influencing government action, using every lever at our disposal to get those tariffs changed, particularly with respect to cocoa.”
The news comes after the company opened its first new plant in its namesake community, Hershey, expanding its product offerings.
As reported by the company during the 1st ground breaking construction, the new 250,000-square-foot chocolate processing facility is on a 55-acre site.
It will produce chocolate used in a variety of beloved brands, including Reese’s, KitKat, Symphony, and Special Dark.
Will Bonifant, Hershey’s VP of Supply Chain Strategy and manufacturing, said, “Our ability to make and deliver products quickly and efficiently is a key component of our growth strategy.
“We’ve made significant investments to speed production, increase capacity and develop our workforce for the future to make more of the iconic brands consumers love.”
The facility features automated technology, with machines on one network so that operators can make adjustments in one place rather than individually on each machine.
The facility, part of Hershey’s broader US$1 billion investment strategy, includes adding 13 new production lines and upgrading 11 existing lines across North American facilities.
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