Ferrero’s Italian subsidiary has reported a 13.3% fall in net profit for the full year due to rising raw material costs.
The company confirmed to ConfectioneryNews.com that net profit for the financial year ending 31 August 2012 amounted to €95.9m ($130m), compared to €110.7m ($150m) for the same period last year.
Raw material price hike
“This was largely influenced by the increase of the cost of certain raw materials.”
Confectioners across Europe have reported supply constraints for sugar as the EU ponders extending sugar quotas until 2020.
The European Sugar Users Association (CIUS), to which Ferrero is a member, recently said that the quota system had led EU beet sugar production to fall 20% short of EU demand, causing a 47% price hike between October 2010 and October 2012.
The Agricultural Committee of the European Parliament recently voted to extend sugar quotas until 2020 rather than abolish them in 2015. The decision is not final and a vote will be made at a plenary session in Parliament in March. A final decision must be made by June.
Ferrero was however able to keep sales afloat in Italy. It recorded a 1.9% increase in revenues in Italy to €2.55bn ($3.45bn) during the year.
“The performance was particularly positive for the brands Estathé, Nutella and Kinder Bueno, which have ensured a significant hold of volumes on the domestic market, increasing respectively by + 4.3% + 2.8% and +1.7% compared to the previous year,” said the company.
“Such growth shows an ability to adapt to the needs of the market, despite the current difficult economic situation and the continuing decline in consumption,” it continued.
Ferrero owner Michele Ferrero was recently named the wealthiest Italian by data consultancy Wealth-X, which said the chocolate tycoon had a net worth of $21.7bn.