Zurich, Sept 9 - Barry Callebaut, which makes chocolate for groups such as Nestle and Cadbury, told a Swiss newspaper the price of chocolate products will rise by up to 18 percent to offset spiralling costs.
"In the case of a 100 gramme chocolate bar, raw material costs account for around 25 percent. Cocoa makes up around half of this. The cocoa price has doubled in the last 12 months," Chief Executive Patrick de Maeseneire told the Handelszeitung.
"That means that the market price of a bar would have to rise around 12 percent. Then there are also higher packaging, energy and transport costs. The market prices of chocolate products will therefore have to rise 15 to 18 percent," de Maeseneire said in the interview released to media on Tuesday, one day ahead of publication.
The firm, which is the world's largest chocolate maker, believes it can pass on the higher costs to its industrial customers, de Maeseneire said.
Barry Callebaut is able to draw up new contracts for customers based on current or future raw material prices.
But de Maeseneire said it was difficult to tell what impact price hikes of 18 percent would have.
"If demand falls then our customers will order less from us," he said.
The group currently produces around 15 percent of the chocolate of larger companies, de Maeseneire said, but he sees the potential to produce around a third of their sales.
Barry Callebaut is sticking to its four-year targets over the 2007/08-2010/11 period, but de Maeseneire cautioned profit will be lower in the first two years as the group makes investments.
The group, which provides the food manufacturing industry with cocoa and chocolate products, coatings and cocoa powders, is aiming for average annual top-line growth of 9 to 11 percent, EBIT growth of 11 to 14 percent and net profit growth of 13 to 16 percent.