Chocolate prices in the UK surge to a record high: here’s why

Chocolate prices in the UK are rising at the fastest pace on record, official figures show, as bad weather devastates cocoa crops in key West African nations and sends global supplies plunging.

According to the Office for National Statistics (ONS), chocolate prices jumped by 17.7% in the year to May, the steepest rise since records began in 2016.

The price surge comes as part of a broader food inflation trend, with the overall cost of food climbing for the third consecutive month.

At 4.4% in May, annual food inflation has now reached its highest level since February last year.

The main rate of inflation remained at 3.4% in the year to May, the highest for more than a year.

The Food and Drink Federation noted that seven major food categories are seeing double-digit inflation, with butter leading at 18.2%, followed closely by chocolate.

Weather woes, disease outbreaks in Ghana and, Ivory Coast, leading to poor harvests

The sharp increase in chocolate prices is directly tied to poor harvests in cocoa-producing countries, particularly Ghana and Ivory Coast, which supply the bulk of the world’s cocoa.

Both nations have been hit by unseasonal rains and disease outbreaks, curbing yields and reducing global inventories.

Cocoa stockpiles hit all-time lows earlier this year, pushing wholesale prices to levels not seen in decades.

With limited supply and robust global demand, manufacturers and retailers have been forced to pass on higher costs to consumers.

Source: BBC

Claire Powell, technical baker at Bako, told British Baker that the impact on bakeries has been substantial.

While some components like cocoa butter can be partially replaced with cheaper alternatives such as palm oil, cocoa powder remains irreplaceable.

“It has extremely inelastic demand,” she said. “The continued high price of cocoa powder may challenge chocolate’s dominance as the go-to indulgent ingredient in bakeries.”

Retailers, economists flag deeper cost pressures

Ruth Gregory, deputy chief economist at Capital Economics, pointed out that the spike in prices might be an early sign of businesses passing on additional costs such as the rise in National Insurance Contributions introduced in April.

Kris Hamer, director of insight at the British Retail Consortium, echoed this view. “Retailers have warned since October that they can’t absorb the full impact of higher operational costs without raising prices,” he said.

The burden on households is growing.

Chocolate bars, Easter eggs, and cocoa powder have become significantly more expensive over the last few years.

A report by The Independent in April cited that chocolate prices have risen 43% since 2022, according to analysis by the Energy and Climate Intelligence Unit (ECIU).

Climate change blamed for worsening price shocks

Amber Sawyer, an analyst at the ECIU, attributed the long-term price trend to climate change.

“Chocolate is just one of the many foods being made more expensive by climate change-driven extreme weather hitting crops, and until we reach net zero emissions, these extremes will keep getting worse.

Sawyer noted that the impact is being felt globally, from cocoa farmers in West Africa facing failed crops, to English farmers enduring one of the worst harvests on record last year due to more intense storms.

“With our food security under threat, be it cocoa, rice, bananas or British vegetables rotting in flooded fields, farmers will need increasing support to keep on growing the food we need, in the UK but also through climate finance for farmers overseas,” he said.

Political debate flares over cost-of-living impact

The inflation spike has reignited political debate.

Chancellor Rachel Reeves acknowledged the pressure on household budgets but said the government is “investing in Britain’s renewal to make working people better off.”

In contrast, Shadow Chancellor Mel Stride called the figures “deeply worrying,” blaming Labour’s economic strategy.

“Labour’s choices to tax jobs and ramp up borrowing are killing growth and stoking inflation – making everyday essentials more expensive,” he said.

As prices continue to climb, the cost of a sweet indulgence like chocolate is becoming a bitter pill for many households to swallow.

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