Mondelez, the owner of Cadbury, is reportedly exploring the potential acquisition of US confectionery giant Hershey.

Bloomberg reports that Mondelez has made a preliminary approach regarding a potential merger, but talks are still in the early stages, and there is no guarantee that a deal will be reached.

Last month, Hershey reported a decline in quarterly sales to nearly $3 billion (£2.3 billion) due to weaker demand. In contrast, Mondelez saw a nearly 2% increase in sales, reaching $9.2 billion (£7.2 billion).

The current discussions follow a similar attempt in 2016, when Oreo maker Mondelez sought to acquire Hershey. However, the US chocolate giant rejected Mondelez's $23 billion (£18 billion) offer.

At the start of the year, the industry warned that confectionery products could face imminent price hikes as the climate crisis caused the global cost of sugar to surge.

Extreme weather, including droughts in Thailand and dry spells in India, threatened crops and led to lower production rates in these key sugar-exporting regions.

At the time, Mondelez CEO Dirk Van de Put stated that there would be a “straightforward price increase,” for consumers, emphasising that shrinkflation or reducing product sizes, “won’t solve this inflation at this stage”.

“While the rest of our input cost is largely flat for next year, those two are really causing us to have to increase prices again.”