Hershey Blocks Cadbury Imports

US consumers can no longer purchase imported Cadbury chocolates, and the “loyalists” of the brand are upset. In the article, “How Cadbury lost the right to sell its own chocolate inthe US,” we learn that, to protect its products, Hershey forced a ban on imported UK confectionary. Consumers quoted in the article “Hershey’s lawsuit sparks British revolt for ‘superior’Cadbury chocolate,” believe the company only pushed the lawsuit because it couldn’t compete with the imported sweets. While this group of consumers is dismayed by the ban, author Bill Saporito reminds us in the article “Quit Whining,Brits! Hershey Had Every Right to Block ‘Real’ Cadbury Bars,” that “Hershey owns the rights to manufacture Cadbury’s products in the U.S.Whereas Hershey competes in an oligopolistic industry, company decision makers may have believed that the ban would lead to an increase in market share for their products. However, the “loyalists” to the imported goods do not view Hershey’s Cadbury products as substitutes. Imported Cadbury is to the chocolate industry as Apple is to the technology industry, so an increase in market share for Hershey’s products is not likely. The “loyalists” to the imported Cadbury brand didn’t think much of the Hershey company to begin with, but now there is a tangible dislike that could lead to a boycott of the company’s products. How do you think the ban will affect the Hershey company?


Dave Tufte said...

Lyn: 50/50

This is really a very odd case: two firms agree on a reasonable contract that benefits them both, and then later on potential consumers become upset at just one of the firms. I bet management is probably stunned that this happened to them.

Personally, I think I can understand the customers' position, and I think that might have been easily anticipated as their dominant strategy. With that as the end game, I have a hard time backing up one level of their extensive-form game to justify why management chose this course. Seems like a blunder to me.

Dave Tufte said...

Oops. This is a post not a comment. Lyn's grade should be 100/100.