Lindt got chocolate price hikes wrong, chairman says after CEO's ouster

Lindt Misjudged Chocolate Price Increases, Chairman Admits After CEO Ouster

Lindt & Sprüngli Faces Challenges After Price Hikes and CEO Departure

Market Response to Price Increases

ZURICH, Oct 24 (Reuters) - Lindt & Sprüngli has struggled because it misjudged how consumers would respond to price increases, the chair of the Swiss chocolate maker said, days after the company ousted its CEO over concerns about its performance.

In an interview with the NZZ am Sonntag newspaper, Executive Chairman Ernst Tanner said the firm, whose shares have tumbled more than 25% this year after recent outlook cuts, was largely suffering because it had misread the market in Germany.

Impact of Cocoa Prices and Consumer Reaction

"We misjudged how customers would respond to price increases. After cocoa prices reached historic highs from 2024 onwards, we wanted to pass on those additional costs. In doing so, we overestimated how much we could raise prices without hurting demand," he said. "For some consumers, our products clearly became too expensive in recent months."

Company Performance Across Regions

"Lindt & Sprüngli as a whole, however, is not in crisis," Tanner added, arguing the company's shares are now undervalued. "In the Americas and the Far East, we'll achieve our growth targets of 6% to 8% this year as well."

Leadership and Future Strategy

Tanner's Continued Role

Tanner, 80, who was CEO from 1993 to 2016 and has been chairman for over three decades, rejected the suggestion that he should stand down, saying he had important work to do to get Lindt back on track.

"Once that's been achieved, I look forward to turning to the next phase of my life," he said.

Measures to Restore Growth

Price Adjustments and Sales Strategy

Tanner said the company had already cut some prices as it seeks to lift sales volumes, and would have more scope to do so once cocoa prices returned to more normal levels.

Job Security and Cost Management

He said there would not be group-wide job cuts and that the firm wanted to keep growing.

Still, he said thrift was required and that bonuses would be affected in the Germany-Switzerland-Austria region as targets had been missed.

(Reporting by Dave Graham; Editing by Nia Williams)