Swiss food company Nestlรฉ has raised the prices of its popular KitKat chocolate bars in the United States and Canada by 10 percent as it tries to recover costs from recent changes to the federal tax system.
The move comes as Nestlรฉ is also facing pressure from a supply shortage in the affected markets. The company said it was adjusting prices in the two countries to reflect the new rate, which is generally lower than the current rate. The company said the higher prices would not materially impact its financial performance.
The Swiss food giant said it raised prices by 6.5% in the first half of this year.
McDonald's and Coca-Cola also announced price increases for their products this week.
Businesses are facing rising costs for resources such as fuel, wages, and ingredients for their products, and prices for UK consumers are rising at the fastest rate in 40 years.
Nestlรฉ, which also makes Cheerios and Smarties, had already raised prices by 3.1% in the last three months of 2021.
The company's chief executive, Mark Schneider, said the price increases were done in a "responsible manner".
“We reduced the impact of unprecedented inflationary pressures and supply chain constraints on expenses through disciplined cost control and operational efficiency,” he added.
Price increases were highest in North America, at 9.8%, compared to 4.9% in Europe.
Nestlรฉ said organic sales increased 8.1% in the first half of this year. The company raised its organic sales growth forecast for this year to between 7% and 8%.
Net profit fell 11.7% to 5.2 billion Swiss francs, or $5.4 billion, including tax increases and write-downs on property and equipment in Russia.
In March, Nestlรฉ stopped investing in Russia and withdrew its famous brands from the country after the invasion of Ukraine.
However, the company still sells essential products there, such as infant formula and medical nutrition products.
The war in Ukraine has further increased the cost of fuel and food, with Britain's inflation rate - the rate at which prices are rising - rising to 9.4% in June, its highest level in more than 40 years.
Some companies are also forced to raise wages to attract and retain employees, with job vacancies aplenty.
McDonald's said on Wednesday it had raised the price of a cheeseburger for the first time in more than 14 years - by 99p to 1.19, or more than £1 in Britain.
It came after beverage giant Coca-Cola told Bloomberg that its global prices had risen by an average of around 5%.
Earlier this week, Amazon also announced it had raised prices for UK customers due to rising costs, with the price of its main subscription service rising by £1 a month from September.
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