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Hershey Boosts Prices by 10% as Costs Rise

By Harry Kimball, Newser Staff

Posted Aug 15, 2008 8:25 PM CDT

(Newser) – Chocolate maker Hershey said today it is raising prices by about 10% to offset the new costs of ingredients, Reuters reports. Commodities like cocoa and peanuts are up between 20% and 45%, it said, yet one analyst called the price hike a "real surprise." The candy giant also predicted lower than expected profit for 2008; stocks were down 4% on the news.

“Commodity costs have been volatile over the last several years and continue to remain at levels that are well above historical averages,” Hershey’s CEO said. “Consumers are likely to see higher every day and promotional retail prices as we implement the price increase and, as a result, we expect volume in the fourth quarter and next year to be lower than previously estimated.”

[Images (4)]

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Hershey's Chocolate Kisses. (AP Photo)

More Hershey's chocolate. (AP Photo)

Hershey's Chocolate World. (AP Photo)

A selection of Hershey bars. (AP Photo)

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We continue to expect that earnings per share-diluted from operations in 2009 will increase, however, at a rate below our long-term objective of 6 percent to 8 percent.
- Hershey

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