How Inflation Ruined A Chocolate Bar

Now that the presidential election is finally over, can we talk about something that actually matters?
I’m referring of course to Tobleronegate, meaning the uproar surrounding the Swiss-based (but US-owned) chocolate company, Mondolez International. The company has widened the gaps between the segments of its iconic chocolate bar, reducing its total volume by some 10 percent. Although the reaction has something of an Old Coke-New Coke air to it, one can easily see it as a sign of the inflationary times, an effect of worldwide money creation coordinated by the leading central banks, with Toblerone being just one of many victims.
The economics of the decision shouldn’t surprise an actual student of economics. Since inflation is always and everywhere a monetary phenomenon, and since the world’s central banks have been pumping new money into the global economy at unprecedented rates for several years, we should expect an upward pressure on prices. In a Facebook post, Toblerone explained that it was forced into changing its product in response to ‘higher cost of numerous ingredients,’ adding that
…we had to make a decision between changing the shape of the bar, and raising the price. We chose to change the shape to keep the product affordable for our customers, and it enables us to keep offering a great value product.

This post was published at Ludwig von Mises Institute on December 1, 2016.