Why Isn’t Chocolate Cheaper?

With gasoline prices, we’ve said “up like a rocket; down like a feather:

Similarly, a plunge in cocoa futures won’t make chocolate cheaper.

Cocoa Price Plunge

• “Roses are red.
• Violets are blue.
• If cocoa is cheaper,
• Why isn’t chocolate too?”

from PBS

The Price Hike

Caused by disease (like swollen shoot virus), too little rain, too much rain, and tariffs, cocoa prices shot upward during 2024 and then again in 2025. As a result, German chocolate lovers paid 18.9% more during 2025.

The Price Plunge

More recently, although, cocoa futures prices plunged by 70%, U.S. chocolates were 14% more expensive during the beginning of this year.

You can see the steep 2025 price dive:

Asking why cocoa bean prices descended, the answer on the supply side includes Ecuador’s new cocoa bean growers. Then, on the demand side, a new recipe from Reese’s that (some say) changed the chocolaty taste and past high prices meant less need for cocoa beans.

But still, chocolate prices remain up. The reasons could be that Hershey’s long term contracts locked in higher prices and they worry that growers’ weather conditions could again worsen. In addition, they don’t want to upset the “consumer inertia” that has grown accustomed to more expensive chocolate.

Our Bottom Line: Oligopoly

It all sounds like typical oligopoly behavior.

Along a competitive market continuum, as we move to the right, corporations become more powerful. On a competitive market structure continuum showing ascending firm power, oligopolies are closest to monopoly because of their size and pricing power:

With just three or four but usually no more than eight companies dominating market share, oligopolies are very large firms that enjoy economies of scale, pricing power, and product differentiation. So yes, like Coke says it is different from Pepsi, and Lays tries for the crunchier chip, Hershey and Mondelez make memorable products. And, because it is an oligopoly, Mondelez, the maker of Oreos and Cadbury had the power to absorb price decreases in the U.K. and Germany.

My sources and more: Our past look at chocolate took us to pricier cocoa beans. Then, we got the up-to-date facts from Axios and PBS.

Please note that several of today’s sentences were in a previously published econlife post.