Australian confectionery company Yowie Group has warned that newly implemented US tariffs on Chinese goods could will take a hit to its costs.
In a market update on the ASX yesterday (7 April), the group said the 54% tariff on Chinese imports to the US “are likely to have a significant impact on Yowie’s cost base”.
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A 10% baseline tariff for all US imports came into effect came into effect over the weekend, with the additional tariffs due to be effective for a long list of countries including China, the UK, Japan and EU, from tomorrow (9 April).
In response to the tariffs, Yowie, which markets its “surprise-inside-chocolates” in the US and Australia, said it was exploring alternative sourcing options, including potential toy manufacturing within the US.
However, it cautioned that “there can be no certainty that such arrangements can be implemented”.
In February, Perth-based Yowie said it was re-assessing its supply chain due to planned US tariffs on imports from both Canada and China.
While the company manufactures its US-distributed products domestically, it sources the packaging and chocolate for its products from Canada and the toys for its chocolates from China.
According to its latest filing, Yowie currently spends around US$2.5m annually on toys sourced from China.
In addition to the US tariffs impact, the business also warned of a $1.9m hit to annual revenue due to a “major customer” reducing shelf space as a result of changes in category layouts. It said the reduction in “store facings” was “effective immediately”.
Yowie did not name the retailer or specify the affected market.
In its second-quarter fiscal 2025 revenues were $3m, down from $3.2m a year ago. US sales fell 33% to $2.1m, while Australian sales increased to $0.9m from $0.1m.
The ASX filing also included updates on developments related to Yowie’s largest shareholder, Keybridge, which entered administration in February.
Yowie is a major creditor of Keybridge, with a debt of approximately A$6.7m.
A deed of company arrangement has been proposed by Nicholas Bolton, managing director at the investment firm and Yowie CEO since December, the group said.
Under the proposed deed, Yowie expects to receive 100 cents in the dollar within 21 days of implementation, pending creditor approval.
Separately, WAM Active—a Keybridge stakeholder—is proposing a loan to fund the repayment, although the details and funding capability remain uncertain.
Yowie said it “will continue to assess the proposals and will update shareholders as further information becomes available”.
The business also announced several leadership changes. Leo Valle, Yowie’s North America country manager, will retire at the end of the month. Meanwhile, Diesel Schwarze and Daniel Agocs have been appointed as independent non-executive directors, since 1 April.
Schwarze and Agocs bring experience in brand storytelling, logistics, manufacturing, and sales to support the company’s consumer-focused growth and navigate global supply chain challenges, the company said.
Yowie added the appointments would look “to enhance governance, in particular in relation to resolving its recovery of a very material debt from a related party, Keybridge”.
