07/24/2014 03:14 EDT | Updated 09/23/2014 05:59 EDT

Mars hikes chocolate prices, following Hershey's lead

Mars Inc., the snack company that makes M&M's, Snickers and their eponymous chocolate bar, said Thursday it will raise consumer prices for its products by an average of seven per cent to offset rising costs.

It's the first time the company has moved to hike prices since 2011.

The move comes after Hershey Co., the largest seller of chocolate in the U.S., said last week it would also raise prices by an average of about eight per cent.

"In the three years since our last price increase, in March 2011, we have invested significantly in the category and have experienced a dramatic increase in our costs of doing business," Mars said.

Globally, Mars is the third biggest confectionery business next to Nestle and Cadbury, which is owned by consumer goods conglomerate Mondelez International.

Nestle chief financial officer Wan Ling Martello warned during a conference call in March that "there will be pricing" action in the company's confectionery business.

The cost of cocoa, a key ingredient in chocolate, has seen a meteoric rise in the past year, having climbed more than 50 per cent since last March to $3,198 per tonne on Thursday. But so far, that's not playing out in prices at stores. Statistics Canada put out data earlier this week showing the consumer price for confectionaries like chocolate bars actually decreased by 1.2 per cent in the 12 months ending in June.

Meanwhile, wholesale prices for dairy and various sweeteners have also increased for manufacturers in recent months.