This has been out for a while now, but I was reminded today of Hershey’s recent decision to stop using cocoa butter in most of their “chocolate” products.

What’s going on here? On Friday, TODAY consumer correspondent Janice Lieberman reported that Hershey’s has switched to less expensive ingredients in several of its products. In particular, cocoa butter — the ingredient famous for giving chocolate its creamy, melt-in-your-mouth texture — has been replaced with vegetable oil.

The removal of cocoa butter violates the U.S. Food and Drug Administration’s definition of milk chocolate, so subtle changes have appeared on the labels of the Hershey’s products with altered recipes. Products once labeled “milk chocolate” now say “chocolate candy,” “made with chocolate” or “chocolatey.”

Setting aside for a moment the outrage that one of America’s oldest chocolate companies is, essentially, no longer making chocolate, this situation is an interesting reminder of the dangers of competing on price. For a while now, Hershey’s has been on the cheap side of the chocolate coin; they’re the ones you grab for half a buck or 85 cents at CVS when you need a quick fix. Meanwhile, people spend upwards of $2.50 a bar for Lake Champlain or other high-end chocolates (my current favorite is Divine 70% Dark) when they want something really good.

So what happens when inflation hits? Instead of being able to raise prices to accomodate, you get cheaper ingredients. Which, in the case of cocoa butter, turns out to be very much The Wrong Decision.

It’ll be interesting to see how this plays out; meanwhile, I sense an opportunity for the folks out there making real chocolate to demonstrate to the penny-pinchers why it’s worth it to splurge on the good stuff.