Real Inflation hits 16.7% for chocolate lovers

Loughton_Monkey

Inflation hits 16.7%

Or at least it does for Cadbury's Chocolate bars.

http://www.bbc.co.uk/newsbeat/12346546

Cadbury is cutting the size of its Dairy Milk bar and is blaming "economic reasons" for the decision to downsize.

The firm says it's having to slash the size of its products because if it didn't, prices would have to rise.

It means that a 140g bar of Dairy Milk, which costs 99p, is reduced to 120g and has two fewer squares.

"We have taken this decision because of a number of economic factors including ingredient costs"
Cadbury owner, Kraft Foods

Nothing particularly startling in this we might think. But I would be interested to learn if others share my own curiosity with what's going on here:

1. Firstly, we have the usual trite BBC journalism that allows Cadbury to use weasel words like "economic reasons". It's a bit like asking why a particular train was late, and getting the response "Timing issues".

2. Secondly, does anyone know if Cadbury's Chocolate is a constituent of the official RPI/CPI index? And if so, will the index reflect this 16.7% price rise or do what most of us do, and buy an alternative brand that has not increased as much.

3. Thirdly, isn't this rather an 'expensive' way to introduce a price rise? It is brainlessly obvious that the cost of producing a chocolate bar must include not only a cost of the ingredients, but additionally a 'unit cost per bar'. On top of this, there must be additional costs to Cadbury for a bit or re-tooling, re-design, etc. associated with the change in bar size. So it appears to me that instead of simply passing on the additional cost of ingredients in the form of, say, a 10% price increase, they deliberately choose to increase unit costs to the extent that they now require a more substantial rise of 16.7%

But most importantly, I am now losing sleep as I absolutely dread the thought of a significantly smaller 'Easter Chocolate Bunny' from Mrs Loughton Monkey this year - when I would much prefer one of the same size as last year - albeit at an additional cost to my good lady. I find the whole thing intolerable.

Graham_Devon

I can believe it.

creme eggs, 58p!!

Generali

Loughton_Monkey wrote: »

2. Secondly, does anyone know if Cadbury's Chocolate is a constituent of the official RPI/CPI index? And if so, will the index reflect this 16.7% price rise or do what most of us do, and buy an alternative brand that has not increased as much.

If/when people switch brands, that will change the composition of the CPI/RPI. Economists call it 'the substitution effect'.

The constituents and weightings of the RPI/CPI are governed by the household spending survey. As people realise that Cadbury's product is being bought less and Tesco Milk Chocolate-style Experience Barz are being bought instead, the weighting given to Tesco's tawdry product will be increased and that of Cadbury's most excellent chocolate reduced.

Masomnia

Loughton_Monkey wrote: »

3. Thirdly, isn't this rather an 'expensive' way to introduce a price rise? It is brainlessly obvious that the cost of producing a chocolate bar must include not only a cost of the ingredients, but additionally a 'unit cost per bar'. On top of this, there must be additional costs to Cadbury for a bit or re-tooling, re-design, etc. associated with the change in bar size. So it appears to me that instead of simply passing on the additional cost of ingredients in the form of, say, a 10% price increase, they deliberately choose to increase unit costs to the extent that they now require a more substantial rise of 16.7%.

I work in a shop, and we sell the 99p price marked bars, and often people will say 'Hey, that's good value!', when they see it's 99p. So my guess is that by making the bar smaller rather than changing the price to 116p they're relying on the psychological factor of it being 99p and hoping that the Ordinaries don't notice that the bar is smaller.

Perhaps they reckon the sales they retain doing it that way will make up the costs that you mentioned.

LilacPixie

Nine less balls in a bag of maltesers apparently..

Joe_Bloggs

Very Krafty and monopolistic.
J_B.

IronWolf

I KNEW chocolate bars were smaller than when i was a kid. Sneaky chocolate makers.

vivatifosi

As any chocoholic (eg me) will tell you, Sainsbury and Tesco have regular offers on branded chocolate whether Cadbury, Nestle, Mars or Lindt. It makes me feel better when buying my smaller Ripples/Dairy Milk/whatever to know that I'm getting 3 or 4 for £1 so the unit price is still reasonable. Also, in some strange karmic fashion, the supermarket is screwing over Cadbury which is screwing over me with its smaller bars. As I eat two of my multipack bars (well they are so small now its rude not to) I ponder this and all is right with the world.

markharding557

Shop brand chocolate much cheaper and some stores sell german stuff as well even tesco

FTBFun

I'm confused by this thread.

Cadbury's and chocolate lovers? Shurely shome mistake.

matbe

markharding557 wrote: »

Shop brand chocolate much cheaper and some stores sell german stuff as well even tesco

But its not Dairy Milk is it most own brand choc is !!!!!!