Chocolate companies shrink size of UK's favourite bars in bid to beat VAT hike and rising costs

Some of the biggest confectionery firms in the UK are shrinking their most popular brands in an attempt to protect their profits.

Companies such as Nestle and Cadburys have reduced the size of some of their most popular brands whilst at the same time increasing their prices to shelter profits from the rise in VAT, which is looming in January.

Poundland offers a typical example. Chief Executive Jim McCarthy said he’s agreed to cut the size of Toblerones by one triangle so he can keep the price at £1.

Similarly Dairy Milk bars will lose a couple of chunks in February whilst a bag of Maltesers will reduce in weight from 140g to 120g.

Bourneville, which was lablled a 'Scrooge' for removing the expensive chocolates from tubs of Heros two years ago, has taken more cost-cutting steps, under its new owner, Kraft.

A Cadburys spokesman, according to the Guardian Newspaper claimed they increased the price of packs due to rising ingredient costs.

Mintel analyst David Jago said the first wave of changes in confectionary value went largely unnoticed. Changes in the sizes of bars such as Mars and Twix were not obvious to most consumers, but now that companies are changing the price of bars as well, people are noticing a change.

Jago said the changes are a tactic being used by confectionary companies to keep profit margins stable when VAT is expected to rise and the price of sugar and cocoa are also increasing.

He also said manufacturers had been asked to alter the size of packs to help tackle the obesity epidemic.

The cost of chocolate has been rising since 2007 when cocoa prices hit a 33-year high over £2700 a tonne.

Customers are already seeing price rises at newsagents. Cadburys and Nestle have boosted recommended retail prices of Kit Kat, Yorkie, Wispa and Dairy Milk by a noticeable 7% – more than twice the rate of inflation.

A Nestle spokesman said the company ‘occasionally’ made changes to prices due to a change in formation or packaging.

The Office for National Statistics has said that food inflation is nearly 5%, in part due to Russia’s ban on grain and wheat exports following the summer droughts.


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Source: Daily Mail