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Teaching activity

In the News Teaching Activity – why are Easter egg prices higher? (Mar 2024)

Elizabeth Veal

25th March 2024

A heatwave in Western Africa, where many of the world’s cocoa beans are produced, is pushing up the prices of chocolate Easter eggs this year.

Climate change is driving up Easter egg prices due to its impact on cocoa production. Heatwaves and drought in countries such as Cote d’Ivoire and Ghana have slashed cocoa yields, leading to a shortage. Cocoa prices have tripled, affecting the costs for chocolate makers and, ultimately, the prices faced by consumers. Farmers, mostly smallholders in West Africa, bear much of the brunt, but it is not good news for Easter egg lovers either. Prices are much higher this year and manufacturers have been finding ways to cut their costs via ‘shrinkflation.’ It seems that consumers are likely to pay more for less for their Easter eggs in 2024.

Some Easter eggs cost 50% more this year and others are smaller, Which? study finds | UK News | Sky News

1 Using a supply and demand diagram, show how rising cocoa bean prices can lead to an increase in the prices of chocolate Easter eggs.

2 Using a cost and revenue diagram, show how the increased cost of cocoa beans affects the profits of chocolate manufacturers, such as Nestle & Mars Wrigley UK. Explain how ‘shrinkflation’ may help them absorb these higher costs.

3 Discuss the likely impacts of climate change on a country such as the Cote d’Ivoire that is highly dependent on cocoa beans for its export revenue.

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Elizabeth Veal

Liz has taught Economics for over 25 years, including several years as Head of Economics at leading schools.

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