ZURICH (Oct 24): Lindt & Sprüngli has struggled because it misjudged how consumers would respond to price increases, the chair of the Swiss chocolate maker said, days after the company ousted its CEO over concerns about its performance.

In an interview with the NZZ am Sonntag newspaper, executive chairman Ernst Tanner said the firm, whose shares have tumbled more than 25% this year after recent outlook cuts, was largely suffering because it had misread the market in Germany.

"We misjudged how customers would respond to price increases. After cocoa prices reached historic highs from 2024 onwards, we wanted to pass on those additional costs. In doing so, we overestimated how much we could raise prices without hurting demand," he said. "For some consumers, our products clearly became too expensive in recent months."

"Lindt & Sprüngli as a whole, however, is not in crisis," Tanner added, arguing that the company's shares are now undervalued. "In the Americas and the Far East, we'll achieve our growth targets of 6% to 8% this year as well."

Tanner, 80, who was CEO from 1993 to 2016 and has been chairman for over three decades, rejected the suggestion that he should stand down, saying he had important work to do to get Lindt back on track.

"Once that's been achieved, I look forward to turning to the next phase of my life," he said.

Tanner said the company had already cut some prices as it seeks to lift sales volumes, and would have more scope to do so once cocoa prices returned to more normal levels.

He said there would not be group-wide job cuts and that the firm wanted to keep growing.

Still, he said thrift was required and that bonuses would be affected in the Germany-Switzerland-Austria region as targets had been missed.

Uploaded by Liza Shireen Koshy