Brach on the Block?

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Brach on the Block?

Switzerland's Barry Callebaut AG, the world's largest chocolate maker, wants to sell U.S. candy maker Brach's, according to a Reuters report.

Barry Callebaut supplies chocolate to makers of Nestle, Hershey and Cadbury chocolate candy. It posted a 4.1-percent rise in group sales to $2.7 billion for the first nine months of its 2006-2007 fiscal year, below analysts' expectations.

"Brach's is suffering from strong competition and the fact that the candy market in the USA is not growing," the company said in a statement. "If we decide to sell, the process would last more than six to eight months."

The company is looking at a joint venture or a partial or full sale of the Brach's business, which makes products such as fudge nut goodies and peanut butter clusters, and that a sale would be the most favorable outcome.

"We have received nearly a dozen statements of interest," the company said.

In other news, Callebaut expected higher cocoa prices in the medium term and said demand for dark chocolate was growing globally as consumers become aware of the health benefits of chocolate with a higher cocoa content. The company said it was confident it would reach its financial targets for the three-year period ending in the 2007-2008 fiscal year, but reiterated higher commodity prices would weigh on the outcome.

"Higher milk prices will also weigh, but are expected to be partly offset by price increases," the company said.