Sweet and Sour? Anthony Ward shakes up the Cocoa Bean Market

Written and Analysed by Susan Moger

When asked the greatest challenge a politician can face, Harold Macmillan replied “Events, dear boy, events”. This is a comment with which senior leadership teams in the confectionery sector in Europe will no doubt identify, on learning the recent news of a raid on the world’s supply of cocoa beans.

It is unlikely that they would have anticipated the effects of the activities of Anthony Ward, a commodity trader specialising in cocoa, whose hedge fund Amajaro has bought £650m ($992m) worth of cocoa beans, 7% of the world’s supply [July 16th, 2010].

According to The Telegraph: Anthony Ward, 50, bought 241,000 tons of cocoa beans and now owns enough to manufacture 5.3 billion quarter-pound chocolate bars. Mr Ward, who is worth around £36 million, holds so much of the market he could force manufacturers to raise the price of Britain’s favourite chocolate bars. The former Chairman of the European Cocoa Association has amassed up to 15 per cent of the word’s cocoa stocks in the last ten years. The cocoa beans from his latest trade are expected to be kept in warehouses in The Netherlands, Hamburg, London, Liverpool or Humberside and are the equivalent of the entire supply of the commodity in Europe.

Ward’s acquisition may have the effect of increasing cocoa prices substantially. The next African cocoa harvest is not due until later September and October this year, and many firms are looking to source supplies for the manufacturing run leading up to the lucrative Christmas and New Year markets.

With a West European Confectionery market worth Euros 44.6 billion in 2008, and a very complex relationship with retailers in terms of products already developed and pre-sold, leadership teams face a tricky balance between delivery of products and the protection of their margins during one of the key demand and profitability-raising periods of the year.

One industrialist who is a former advisor to the UK government on restrictive practices did not feel the issue should focus on what Ward had done, commenting “I think it is too easy to blame an individual for taking advantage of a market opportunity. If he didn’t, wouldn’t someone else have done so? It’s necessary to look at the whole system, and what could and should be done about it.”

Ward’s activities have led some to dub him ‘Chocfinger’ (Financial Times, July 24th p.11) and they have invested the possibly rather prosaic world of confectionery manufacture with a new drama and intrigue. His activities certainly show all those involved in any leadership activity in any sector that external events can have an impact which isn’t anticipated and which can’t necessarily be ameliorated. Taleb called such events Black Swans in his book of the same name.

It remains to be seen whether the confectionery manufacturers’ dealings in sweet commodities will turn sour this Christmas.

Students of Leadership

What lessons might be learned from this story? What can be learned from earlier attempts to corner a market? Are there governance and ethical considerations to be taken into account? What does the story tell us about entrepreneurship?


Courtesy of the Amajaro Board. Image downlaoded from the corporate website [Anthony Ward is 2nd from the right].


One Response to Sweet and Sour? Anthony Ward shakes up the Cocoa Bean Market

  1. […] all of you who missed this news tidbit, Anthony Ward bought 1 billion dollars worth of Cocoa beans (about 7% of the worlds supply.) with the express purpose of hoarding them to drive price of chocolate up. This isn’t the first […]

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