Chocolate and cosmetic prices could soar on Europe’s new cocoa law as companies must prove that every bean they import didn’t contribute to deforestation

Everywhere you look and walk there are cocoa beans. Millions and millions are delivered to similar facilities in West Africa and then shipped to warehouses in Amsterdam; Hamburg; and Antwerp, Belgium, for the world’s top chocolatiers.

Yet a massive change is afoot that threatens to upend this supply chain and jolt prices for sweets, skin-care products and herbal medicines. Starting Dec. 30, the European Union will require companies such as Cargill Inc., Ferrero Group, Nestle SA and Mars Inc. to prove that every bean they import to the continent didn’t contribute to deforestation somewhere else.

That means tracing cocoa from pod to port, a costly mandate for an industry already staggered by declining production and record prices for futures. But no proof means no sale — a significant penalty given the 27-member EU is the biggest buyer from Ivory Coast and Ghana.

“There is a gun to our head to set up systems and get ready,” said Paul Davis, president of the European Cocoa Association industry group. “We expect disruption for about one to two years, and that could mean higher pricing in Europe.”

Every shipment — in bags or in bulk — will have to list the GPS coordinates of the farms where the cocoa was grown, and that information needs to be uploaded into an EU database. Cargill, Ferrero and Nestle said they’re building up their geolocation networks in Ivory Coast, which supplies 44% of the world’s cocoa.

None of the companies contacted would say how much they’re spending on their…