Trumpenomics
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@jon-nyc said in Trumpenomics:
That’s odd… A 10% tariff on cocoa imports shouldn’t result in a 30% price increase. As the cost of the material is only a fraction of the production and marketing cost, it should be less than 10% overall. There’s more to that story.
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That doesn’t add up.
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@jon-nyc said in Trumpenomics:
I saw another report that said processed cocoa used in Reese’s has a 25% tariff.
That still doesn’t account for a 30% price increase.
The wholesale costs of cacao right now is $.15 per ounce. Hershey’s milk chocolate is 11% cacoa, or $.02 (rounding up) of cacao in every ounce. Reese’s PB cups have roughly 1.5 ounces of milk chocolate per cup, or $.03. There’s 2 cups per pack, so that’s $.06 of cacao per package. A 30% tariff on cacao would account for another $.02 per pack. Retail pricing on Reese’s are $1.99 per pack. A $.02 increase would be a 1% increase, not 30%.
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@89th said in Trumpenomics:
Haha I think I’ll trust my friend who is like 2 levels below their CFO
Isn’t it funny how in the DC Crime thread you discount anecdotal evidence in favor of official statistics, but in this case you discount statistics in favor of personal anecdotes?
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It’s not rocket science. The price of cacao is the price of cacao. The roasting and processing of the beans to cocoa powder or liquor generally yields 1-1 ratio. Hershey using 11% cocoa or cacao % in their milk chocolate is well established, as is the 1.5 oz of milk chocolate per Reese’s.
I don’t know the cost of processing, costs for the peanut butter, or costs for actually creating the cups, packaging, or marketing the products, but that’s irrelevant. The questions is how much does the cost of the cacao tariffs and the cost of cacao itself contribute the to 30% price increase. The answer is not much.
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I’ll try one more time…If you’re talking about the ingredients, it doesn really matter. The actual costs of the ingredients, per unit, are small fractions of the actual costs for these items. The vast majority of-vast majority of the overhead for these goods will be labor, packaging, transport, and marketing. Especially when you are talking about the volume of production these guys have. Those are items that aren’t generally affected by the tariffs. But… The tariffs make a wonderful excuse for substantial price increases.
