Lindt to supply chocolate to Canada from Europe to sidestep tariff hit

Swiss chocolate maker Lindt & Spruengli will supply chocolate to Canada made in Europe to avoid Canadian tariffs imposed to counter the higher U.S. customs duties imposed by President Donald Trump.

President Trump announced new 25% tariffs on imports from Mexico and Canada would take effect from Tuesday, with Canadian Prime Minister Justin Trudeau saying Ottawa would respond with immediate 25% tariffs.

Lindt produces 95% of the chocolates it sells in the United States at its five factories in the country, which also supply Canada and could be affected by the U.S. tariffs.

CEO Adalbert Lechner said Lindt was taking action to prevent its business in Canada, one of its top ten markets, from being caught in the cross fire of the trade conflict.

"The volumes that we source currently for Canada can all be shifted to Europe," Lechner said after Lindt reported its full-year results.

At present 50% of the company's chocolates in Canada came from the U.S., and the rest from Europe.

"We are able to source 100% from Europe," Lechner told Reuters.

Lindt, whose products include Lindor chocolate balls, has already built up inventories in Canada from the U.S. to give it time to change its supply chain, which it expects to complete by the middle of the year.

Chief Financial Officer Martin Hug said it would be slightly more expensive to transport chocolate to Canada from Europe but it would cost less than if tariffs were imposed.

Products produced in Europe could also face less of a consumer backlash in Canada than chocolates labelled as made in the United States, Hug said.