Britain loves chocolate.

We’re estimated to consume 8.2kg each every year, a good chunk of it at Christmas, but the cost of that everyday luxury habit has been rising fast.

Whitakers have been making chocolate in Skipton in north Yorkshire for 135 years, but they have never experienced price pressures as extreme as those in the last five.

“We buy liquid chocolate and since 2023, the price of our chocolate has doubled,” explains William Whitaker, the real-life Willy Wonka and the fourth generation of the family to run the business.

“It could have been worse. If we hadn’t been contracted [with a supplier], it would have trebled.

“That represents a £5,000 per-tonne increase, and we use a thousand tonnes a year. And we only sell £12-£13m of product, so it’s a massive effect.”

Whitakers makes 10 million pieces of chocolate a week in a factory on the much-expanded site of the original bakery where the business began.

Automated production lines snake through the site moulding, cutting, cooling, coating and wrapping a relentless procession of fondants, cremes, crisps and pure chocolate products for customers, including own-brand retail, supermarkets, and the catering trade.

Steepest inflation in the business

All of them have faced price increases as Whitakers has grappled with some of the steepest inflation in the food business.

Cocoa prices have soared in the last two years, largely because of a succession of poor cocoa harvests in West Africa, where Ghana and the Ivory Coast produce around two-thirds of global supply.

A combination of drought and crop disease cut global output by around 14% last year, pushing consumer prices in the other direction, with chocolate inflation passing 17% in the UK in October.

Skimpflation and shrinkflation

Some major brands have responded by cutting the chocolate content of products – “skimpflation” – or charging more for less – “shrinkflation”.

Household-name brands including Penguin and Club have cut the cocoa and milk solid content so far they can no longer be classified as chocolate, and are marketed instead as “chocolate-flavour”.

Whitakers have stuck to their recipes and product sizes, choosing to pass price increases on to customers while adapting products to the new market conditions.

“Not only are major brands putting up prices over 20%, sometimes 40%, they’ve also reduced the size of their pieces and sometimes the ingredients,” says William Whitaker.

“We haven’t done any of that. We knew that long-term, the market will fall again, and that happier days will return.

“We’ve introduced new products where we’ve used chocolate as a coating rather than a solid chocolate because the centre, which is sugar-based, is cheaper than the chocolate.

“We’ve got a big product range of fondant creams, and others like gingers and Brazil nuts, where we’re using that chocolate as a coating.”

A deluge of price rises

Brazil nuts have enjoyed their own spike in price, more than doubling to £15,000 a tonne at one stage.

On top of commodity prices determined by markets beyond their control, Whitakers face the same inflationary pressures as other UK businesses.

“We’ve had the minimum wage increasing every year, we had the national insurance rise last year, and sort of hidden a little bit in this budget is a business rate increase.

“This is a small business, we turn over £12m, but our rates will go up nearly £100,000 next year before any other costs.

“If you add up all the cocoa and all the other cost increases in 2024 and 2025, it’s nearly £3m of cost increases we’ve had to bear. Some of that is returning to a little normality. It does test the relevance of what you do.”

Warner Bros is reportedly set to reject a hostile $108bn (£81bn) takeover bid from Paramount, with one of the prospective buyer’s financing partners confirming it’s pulled out of the offer.

A spokesman for investment firm Affinity, owned by Donald Trump‘s son-in-law Jared Kushner, told Sky News’ US partner network NBC News “the dynamics of investment have changed significantly”.

It had backed Paramount’s bid, along with funds from Saudi Arabia and other Middle Eastern countries.

Bloomberg and The Wall Street Journal report the Warner Bros Discovery board are set to advise shareholders to reject Paramount‘s bid – paving the way for Netflix, which had struck a $72bn (£54bn) deal.

If the takeover goes through, it would give the streaming giant the rights to hit Warner franchises like Harry Potter, Batman, and Game Of Thrones, as well an extensive back catalogue of classic films.

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It is the latest twist in a takeover saga where the winner will acquire a huge advantage in the streaming wars.

In June, Warner announced its plan to split into two companies – one for its TV, film studios and HBO Max streaming services, and one for the Discovery element of the business, which primarily comprises legacy TV channels that show cartoons, news, and sports.

Netflix agreed a $27.75 per-share price with the firm, which equates to the $72bn purchase figure deal to secure its film and TV studios, with the deal giving the assets a total value of $82.7bn.

However, Paramount said its offer would pay $30 (£22.50) cash per share, representing $18bn (£13.5bn) more in cash than its rival offered. The offer was made directly to shareholders, asking them to reject Netflix’s deal, in what is known as a hostile takeover.

The Paramount deal would involve rival US news channels CBS and CNN being brought under the same parent company.

Read more:
Why is Warner Bros for sale and how is Trump involved?

The US government will have a big say on the final deal, with the winning company likely facing the Department of Justice’s (DOJ) Antitrust Division, a federal agency which scrutinises business deals to ensure fair competition.