Toblerones, Pampers and the retreat from currency hedging

3 January 2017/No Comments
By Nick Dunbar

Confectionery maker Mondelez attracted attention last October when it reduced the amount of chocolate provided to UK consumers of its Swiss-made Toblerone bar while keeping the packaging the same size. The company defended the move as an attempt to avoid passing on rising prices – caused by sterling’s plunging exchange rate in the wake of Brexit.

The new UK Toblerone bar contains 10% less chocolate in the same size package
The new UK Toblerone bar contains 10% less chocolate in the same size package

The story is a symptom of a broader trend: multinational companies are retreating from traditional currency hedging techniques in the wake of unprecedented volatility. Consumer goods giant Procter & Gamble is a good example.

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