Chocoholics are facing a sudden weight loss campaign – as confectionery companies cut the size of the biggest-selling bars before the January rise in VAT.
The likes of Nestlé and Cadbury are quietly shrinking the size of some of their biggest brands, and simultaneously nudging up prices, in a bid to preserve their profit margins as a result of rising costs and the looming VAT rise.
At Poundland, chief executive Jim McCarthy said he has negotiated to introduce a new, lighter Toblerone in the new year – about one triangle shorter than the standard bar – so that the price can be held at £1.
From next February a block of Dairy Milk will be a lean 120g, down a couple of chunks from its previous heft of 140g. The Bournville company – accused of being a Scrooge two Christmases ago when it removed more expensive chocolates from tubs of Heroes – is proving to be even more frugal under new owner Kraft. The smaller bars come just after the firm pushed through a round of price increases.
A spokesman for Cadbury said pack sizes were being varied to provide consumers with more choice. "We have taken the decision to increase prices because of economic factors such as ingredient costs."
A Mintel analyst, David Jago, says that at first the trend went unheeded by consumers. "Most people have no idea how much a Mars bar or a Twix weighs. But it's starting to get tricky. At first companies were reducing pack sizes but keeping prices the same but now both things are happening at the same time and people are starting to notice."
Boxes of Maltesers, made by Mars, shrank from 140g to 120g last year.
Jago says it is one the tactics being used by confectionary groups to maintain their profit margins at a time when VAT is set to rise and the cost of ingredients such as palm oil, cocoa and sugar are soaring.
Chocolate prices have been creeping up since 2007 as supply shortages and speculation on the commodity market culminated in the price of cocoa hitting a 33-year high of more than £2,700 a tonne in the summer.
Indeed, one London hedge fund manager, Anthony Ward, has earned the nickname Chocfinger after his company Armajaro placed the biggest order London's Liffe exchange had seen in 14 years, as he gambled its price would continue to rise.
That situation is affecting prices at the newsagent's counter. The Grocer magazine recently reported that Cadbury and Nestlé have pushed up the recommended retail price of top selling bars such as Dairy Milk, Wispa, Kit Kat and Yorkie by up to 7% – more than double the rate of inflation.
That translated to an extra 3p on a standard bar of Dairy Milk and means the UK's biggest selling bar now costs 30% more than it did three years ago.
Nestlé has increased the price of its Kit Kat and Kit Kat Chunky bars twice this year. It also hiked the price of Yorkie and Aero bars by 3p and 4p respectively – despite having shrunk the size of both bars last year.
A spokeswoman said: "Occasionally we make small changes to the size of our products, driven by a number of factors, including anything from a product reformulation, to a change in packaging, through to increases in cost bases."
Jago also suggested that "manufacturers have been encouraged to play around with pack sizes" to help fight the growing obesity problem. Britons munched through a £2.3bn chocolate mountain last year.
Analysts say the games being played by manufacturers make it harder for consumers to judge value at a time when one in three products on supermarket shelves are now on promotion – and prices are already rising.
Last week official government figures showed a surprise rise in inflation in November with Russia's ban on grain and wheat exports, following the summer droughts, one of the reasons given by the Office for National Statistics for food inflation running at almost 5%.
The tough retail conditions have seen discount chains such as Poundland prosper and supermarkets have copied its simple approach by offering thousands of "round pound promotions" because consumers like them.
Poundland does what it says on the tin, selling a range of 3,000 items, all for £1 but is performing a complex juggling act to keep prices stable with suppliers now desperate to pass on price rises and a VAT rise on the horizon.
To get round the squeeze, Poundland, has reduced packaging and struck special deals with suppliers. As well as the smaller Toblerone, packs of Tetley teabags now contain 88 rather than 100 brews.
http://www.guardian.co.uk/business/2010 ... sizing-vatFYI... I'm cutting back on most forms of chocolate soon anyway, it's next to tasteless these days IME. Mind you, I've a feeling the VAT rise is just an excuse for what's been happening the last few years anyway, and not just with chocolate
