Company hit by the rising price of cocoa beans
Lir Chocolates. Stock image
Pre-tax profits at Co Meath-based luxury chocolate maker Lir Chocolates plummeted by 85pc to €236,714 last year as the owners were unable to keep pace with the spiralling global price increases in the cocoa bean in 2024.
New accounts show the owners of Lir Chocolates Ltd were left counting the price of the record highs of the cocoa bean as pre-tax profits declined by €1.34m to €236,714.
The sharp drop in profits came as revenues increased by 19pc to €41.7m as the firm made efforts to pass on some of the price increases of cocoa beans to their customers.
In April of last year, globally the price of cocoa prices peaked and briefly exceeded a record of $12,000 per tonne and by late 2024, prices were around $8,177 per tonne, more than a threefold increase on the 2022 price of $2,300 per tonne.
In their report, the directors for Lir Chocolates lament that “the price increases (in the cocoa bean) were so rapid and frequent that they could not be passed on to our customers quickly enough resulting in a delay in implementing selling price increases”.
The directors state that the 2024 performance was “severely impacted by sharp unprecedented increase in the cocoa bean price”, which is the main raw material in the production of chocolate.
“These prices were driven by several key factors – adverse weather conditions leading to reduced crop yields, rising production and transportation costs exacerbated by global inflation and fears of potential crop shortages in future seasons fuelling speculative price increases.”
They state that the demand for cocoa remains strong, supporting higher prices.
“Despite ongoing challenging conditions, the company expects to return to profit levels closer to those seen in previous years with a full recovery of chocolate prices anticipated in 2025,” the directors state.
Each year at its Navan plant, Lir produces over 100 million individual chocolates.
The drop in profits would have been even greater but for Lir Chocolates recording a gain of €461,361 arising from “a supplier settlement claim”.
A breakdown of the company’s revenues show that the UK is the company’s biggest market accounting for 69pc or €28.83m in revenues while Republic of Ireland revenues accounted for 8pc or €3.44m in revenues.