Mondelez seeks delay to EU Deforestation Law amid soaring cocoa costs, industry strain
Chocolate makers warn new EU import rules could weaken competitiveness as prices surge and supply disruptions persist.
EU – Mondelez International is calling for a delay to the European Union’s impending deforestation law, citing record-high cocoa prices and mounting supply chain disruptions that are impacting the chocolate industry.
Set to take effect at the end of 2025, the law would prohibit imports of commodities such as cocoa and palm oil if linked to deforested land.
Mondelez, owner of Cadbury and one of the world’s largest chocolate manufacturers, had initially supported the legislation but now warns that its implementation could jeopardize the competitiveness of the €70 billion European chocolate sector, according to the Financial Times.
The company argues that further regulatory burdens, in the context of extreme market volatility, are unsustainable.
Cocoa prices have more than tripled in recent months, driven by crop disease and erratic weather in West Africa—home to the majority of the world’s cocoa production.
Although prices have slightly retreated from highs above US$12,000 per tonne, they remain historically elevated.
A group of European chocolate makers—including Ferrero, Nestlé, and Tony’s Chocolonely—has cautioned that any delay or alteration to the deforestation law could dilute the European Union’s environmental leadership. They issued a joint letter urging lawmakers to stand firm.
In contrast, major U.S. chocolate manufacturers Mars and Hershey have declined to endorse these letters. The FT reports that their stance may have been shaped by broader U.S. political resistance to environmental regulations.
Mondelez’s financial performance has already begun to reflect market stress. In 2024, net income dropped to US$4.61 billion from US$4.96 billion the previous year.
The company projects a 10% decline in adjusted earnings per share for 2025 due to cocoa price inflation, compounded by a 12¢-per-share expected impact from currency fluctuations.
Chief Financial Officer Luca Zaramella described the cocoa market as highly volatile, noting that even with a strong main crop, prices have remained elevated for several consecutive months.
The company’s revised forecast excludes earnings from its divested stake in JDE Peet’s, the coffee and tea group.
Mondelez has emphasized the need to remain flexible in light of unpredictable commodity trends and regulatory developments.
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