Trumpenomics

[LuFins Dad]

That doesn’t add up.

[jon-nyc]

I saw another report that said processed cocoa used in Reese’s has a 25% tariff.

[89th]

Haha I think I’ll trust my friend who is like 2 levels below their CFO

[LuFins Dad]

@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%.

[LuFins Dad]

@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?

[89th]

Oh you are certainly using statistics, but you do not have insight into the Hershey operations and costs, so in that case I’ll trust the person who literally is in charge of knowing their financials.

[89th]

In other words, I defer to his statistics.

[LuFins Dad]

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.

[89th]

Could be other parts of the company have increased costs due other tariffs (import taxes) so the price is going up accordingly.

[LuFins Dad]

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.

[89th]

You’re right