´óÏó´«Ã½

If you're lucky enough to have an Easter egg today or over the weekend, spare a thought for the people in the big and complex business that brought it to you.

This was meant to be a good business in a recession, but it's looking less that way now.

The idea was that, in an economic downturn, people would replace their designer label splending splurge of recent years, by seeking simpler pleasures in chunk-sized bites and bite-sized chunks.

Chocolate futures surged to a 24-year high in January, helped up there by indications out of the Ivory Coast that the cocoa crop supply might not be so strong. The London futures market has continued to look relatively healthy - relative, that is, to the Germans.

The so-called "German grind" - referring to the processing of cocoa into butter and cake, which is then made into powder - is a vital sign of how the international chocolate business is faring.

And figures out on Thursday show a drop by 21% in volumes, to 80,400 tonnes. That could make a lot of chocolate bunnies.

It's claimed in Germany that the most prominent problem is a sharp drop in demand from Russia and eastern Europe. These countries are supplied from Germany, with around a third of the European cocoa grind, but sharp currency shifts have hit that trade.

So what's happening to explain strong futures but falling demand? Reuters reports commodity traders' claims that the futures price is driving a sharp increase in stocks, up from a normal upper limit of around 15,000 tonnes to a level as high as 70,000 tonnes now.

The other factor is that the quality of chocolate seems to be falling, in that consumers are opting for lower concentrations of cocoa bulked up with more vegetable oil. Luxury brands are being replaced with supermarket own brands and the like.

Cadbury, the British market leader, remains positive about prospects through the recession, but wary of consumers trading down.

In an annual report published last week, the company also flagged up its concerns that health concerns are going to put pressure on its image, profile and sales, so it's trying to get into what it calls "fortified/functional confectionary" plus "good-for-you" and "wellness" products, encouraging consumers to be "treatwise".

There's also environmental pressure on the market, with Mars, makers of the Galaxy bar, announcing today that the chocolate bars are going rainforest-friendly within two years.

Meanwhile, the big growth area in confectionary is not the brown stuff but chewing gum. Cadbury has nearly 30% of the $20 billion global gum market, behind Mars-Wrigley, and that has been growing at 7% per year over the past four years.

That's got to be bad news for pavements.