Euro Crisis Hurts Chocolate Sales: How Sweet It Isn’t

The euro rose to a seven-week high against the dollar on Tuesday, due to optimism that the European Central Bank will take action in the form of making “mass purchases of Spanish and Italian debt.” Both Spain, where unemployment is around 25 percent, and Italy are in a recession.

A glance at some other data suggest that this optimism may be short-lived.

In a letter to investors, chocolatier Lindt & Sprungli said that even though pretax profits had risen 12 percent, “increasingly severe government debt levels” and “subdued economic performance” were affecting sales, as the Guardian notes. Indeed, Lindt used the word “deteriorate” to describe “consumer sentiment,” especially in southern Europe.

The chocolate company is predicting that “conditions seem likely to become still more  challenging in the second half of the year.” Has it already lowered forecasts of chocolate purchases, all those Santas and foil-wrapped balls and coins (euros), during the December holidays?

Moody’s rating agency has declared that the task of “rebalancing the euro zone economy” is half-done. While saying that “adjustments, both in the periphery and the core, have already taken place — in some cases, to a significant degree,” Moody’s concludes that “the correction is at best only half-way complete, depending on the country in question, and could take several years.”

Risk from the ongoing debt crisis is cited as one reason the US could face a double-dip recession, the Standard & Poor’s ratings agency said on Tuesday. S & P now says that the chance that the US economy could fall into another recession is 25 percent, up from 20 percent in February.

The potential for an upcoming “fiscal cliff” and a slowdown in China’s economy were also noted as factors.

However, S & P did say that the U.S. economy would experience “modest growth,” with its gross domestic product increasing 2.1 percent.

So some of us might still be able to get one chocolate snowman, though maybe not a golden bunny too.

 

Related Care2 Coverage

Euro Crisis: A Big, Maybe Bad, Week For Greece

4 Challenges Greece Faces and a Contest

Euro Crisis: Euro Zone Facing Double-Dip Recession

 

 

Photo by Like_the_Grand_Canyon

72 comments

Jim Ven
Jim Ven1 months ago

thanks for sharing.

Jim Ven
Jim Ven1 months ago

thanks for sharing.

debra h.
debra howard4 years ago

having said all i did last comment, i too support fair trade in chocolate as well as everything else we buy-it takes guts and resolve to seek our fair trade items but they are getting easier to find and can be expensive, so i ration mine out-sort of like the sugar fair trade issue and stand made during the british governments fight to end slave-trafficking with it's supporters advocating that sugar for that all important cup of tea be purchased from a fair trade company-look up william willberforce for all this type of info-watch movie amazing grace-it's not too churchy, i promise and is fantastic inside revelation of the actual fight

debra h.
debra howard4 years ago

i used to work for barry callebaut's us devision, brach candy-i worked in the sample/sales support division, so my co-workers and myself were given the the opportunity of getting our hands on the finest chocolates i have ever tasted, these products came from switzerland, although the company maintained manufacturing in other countries-france, austria, sweden, the ivory coast,etc. the ivory coast chocolate was controversial because of the government and the harvesting conditions-sarottie was one of the best i have ever tasted in my 55 years of eating chocolate-if you want to buy excellent chocolate at good prices here in the us, look for availability in your area for Aldi, which is a german company, who bought from barry callebaut at one time(may still do)cause i personally prepared the demonstration/sale packages for aldi-the us manufactures are sorely lacking in their ability to produce fine chocolate, partly because they have mostly centered on milk chocolate, which is not the favorite in europe and on the african continent...chocolate is somewhat important to consumers because of it's treat and feel good value-you just have to shop around

Nimue Pendragon

Until recently Lindt chocolates were selling at half price at Woolworth, for many months.

Vicky Pitchford
Vicky P4 years ago

haha, Chocolate is the least of everyone's concerns there, but yum, love it, if it didn't have so many calories and fat, I would eat it daily

Cristina Calloni
Cristins Calloni4 years ago

if you pay less inchocolotats...you received less quality....py more and good brand and you received the best .

Cristina Calloni
Cristins Calloni4 years ago

Well in the market we have all kind of quality of chocolats....all depend how much we willing to pay....cheaper with palm oil and originals and too expensis product

paul m.
paul m4 years ago

Thanks

paul m.
paul m4 years ago

Thanks