Hershey seeks tariff exemption for cocoa from White House

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Hershey is calling on the White House to exempt cocoa from tariffs as an escalating trade war could push chocolate prices even higher. 

The Kisses and Almond Joy manufacturer told investors it expects tariffs to cost between $15 million and $20 million during the second quarter as the company works through existing cocoa inventories. 

But as those stockpiles dwindle, the Pennsylvania company said tariffs could increase costs by up to $100 million in the third and fourth quarters. Hershey has “robust mitigation plans” in place to lower costs and reduce the impact of tariffs below that level, the company said.

“Cocoa cannot be grown in the United States and thus, we are engaging with the U.S. government to seek an exemption,” Michele Buck, Hershey's CEO, said in prepared remarks tied to its first-quarter earnings.

Hershey is working with lawmakers and trade groups to convince the Trump administration on the tariff exclusion.

Hershey, like other chocolate companies, largely relies on the Ivory Coast and Ghana in West Africa, which are the world's top cocoa producers. 

In addition to a base 10% tax already in effect, President Donald Trump has threatened 21% retaliatory tariffs on the Ivory Coast, the highest among West African nations.

Hershey said it not only faces exposure to imported cocoa but also on retaliatory tariffs put in place by Canada, which is an important player in cocoa processing. 

“We've got the most effort focused on influencing government action, using every lever at our disposal to get those tariffs changed, particularly with respect to cocoa,” said Steve Voskuil, Hershey's CFO. 

The tariffs are the latest challenge for confectionary companies as they struggle with high cocoa prices due to growing challenges from weather, disease and robust consumer demand.

Hershey, Mondelēz International and others increased prices in 2024 to offset the run-up in costs for the ingredient. While cocoa prices have come down from their record highs last year, they remain elevated.