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Eggs-pensive: Cocoa costs drive chocolate prices higher

On international commodities markets, the price of cocoa has increased by 400% over the past decade
On international commodities markets, the price of cocoa has increased by 400% over the past decade

Easter is coming and for many that means a chocolate egg.

If you are planning on buying a chocolate egg, especially if it's one of the speciality eggs, chances are you are facing much higher prices this year.

Artisan chocolatiers Georgia Quealy and Daniel Linehan are hard at work making Easter eggs in their workshop in Tullamore, Co Offaly.

"It's very, very busy at the minute," Mr Linehan said.

"We're all handmade - everything is handmade," he explained.

"We would generally only start to make our Easter eggs, maybe about two to three months out from Easter, and then we're producing right up until Easter.

"I probably will finish my last Easter egg five or six days before Easter."

Daniel Lenihan and Georgia Quealy have seen an increase in the price of ingredients

For a speciality chocolate brand like Bon Chocolatiers, Easter Eggs are a big-ticket item (the large eggs retail for between €43 and €50) and that makes Easter one of the busiest times of their year.

As well as all the regular costs and challenges facing a small Irish business, they have had to reckon with a huge increase in the cost of their main ingredient - cocoa beans.

On international commodities markets, the price of cocoa has increased by 400% over the past decade, placing significant pressure on their business.

"Cocoa has skyrocketed in price," Mr Linehan said.

"It used to sit around $2,000 to $3,000 US dollars a tonne for the raw ingredient cocoa, and at its highest it was at $12,500.

"So obviously that has a huge knock-on effect in our business.

"We can't put our prices up by 400% - that's just not realistic."

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Ms Quealy and Mr Linehan looked at their own business practices and tried to cut costs as much as possible.

In the end, they say they increased their prices by about 15% for the consumer.

Although Bon Chocolatiers has had to absorb some of its rising costs, they remain optimistic about the future of their business.

"It's hard to run a business," Mr Linehan said.

"Things come up, things come down. But, you know, we have to try our best.

"At the end of the day, we sell this product. We have staff to pay. We have bills to pay, and the price has to reflect that, you know?"

The reason cocoa prices have increased are related to a number of factors including damaged crops, climate change and increased labour costs.

Cocoa bean prices have increased significantly

Professor of agrifood economist at University College Cork, Thia Hennessy, explained that while the demand for chocolate is increasing, the supply is decreasing.

"About 60% of the global supply of cocoa beans just comes from Ghana and the Ivory Coast and they've been struck by several years of bad and extreme weather," she said.

Heatwaves and droughts have damaged the cocoa bean crop and reduce the international supply. Most cocoa bean farmers have relatively small holdings as well, this means they are often not in a position to invest in their farm or expand production.

The lack of supply is not the only reason the cost of cocoa has increased.

Prof Hennessy explained that regulations around protecting human rights, and the environment have also driven up the price.

"The EU has introduced more stringent legislation around traceability for food products around corporate reporting, the use of due diligence within the supply chain, banning the use of child labour, modern slavery, banning deforestation of land in terms of the production of food products," she said.

Speaking to Morning Ireland on the floor of their workspace in Tullamore, Mr Lenihan and Ms Quealy say they are very aware of the issues around ethically sourcing cocoa beans for their chocolate.

"The chocolate industry can be quite cloudy, Mr Linehan said, "with some shady things like child labour [and] a lot of deforestation.

"We want this to be a sustainable industry for everyone.

"[It] should go without saying that there's no child labour involved, that its Fairtrade where possible, that it is organic; we'd look for a supplier that's going to meet those criteria.

"It obviously means we have to pay a premium, but I wouldn't feel right not doing that."

Easter is one of the busiest times of the year for Bon Bon Chocolatiers in Tullamore

Inequalities in chocolate market

While the price for chocolate for the consumer is rising, in general cocoa farmers remain very poor, explained Anouk Franck, an expert on business and human rights, specifically for the food sector at Oxfam Novib.

A 2023 study from Germany found that just 9% of the price of a chocolate bar paid by the consumer is received by the farmer.

"That's a basic problem, because this also leads to farmers not investing in their farm," Ms Franck said.

"Many, many issues come from this very unfair sharing of value along the cocoa and chocolate value chain."

Cocoa farms are almost all small-scale, Ms Franck said. Farmers generally work off small plots of land and cocoa trees need space around them.

In Ghana, 91% of cocoa farmers earn below a living income, according to a recent study by the Swiss Platform for Sustainable Cocoa (SWISSCO) and the Ghana Cocoa Board.

There is a Living Income Reference Price tool, designed by Fairtrade International to calculate what a fair price to pay the farmer would be.

However, most chocolate brands do not use this and the Fairtrade symbol on a chocolate bar does not indicate that the farmer was paid a Living Income Reference Price.

"Cocoa farmers in Ghana are not receiving fair price," Issifu Issaka, a cocoa farmer in Ghana and The National President of the Ghana Cooperative Cocoa Farmers Association, said.

Mr Issaka has been a cocoa farmer for the past 13 years and said in that time he has never earned a fair price for his cocoa beans.

The situation has gotten worse in that time too, according to Mr Issaka. The major issues include the worsening impacts of climate change destroying local water bodies, as well as the cost of living increasing in Ghana as well as everywhere else.

Mr Issaka says he does not have the money to buy chocolate himself, despite producing the raw ingredient for it.