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Belgian Chocolate: Is Its Reputation Melting?

(c) Sky News 2012

Belgium's reputation as the world's chocolate capital could be melting as emerging markets develop a sweet tooth and the recession continues to bite.

The region became the base for the industry shortly after the Spanish explorer Cortes returned from Mexico with cocoa pods from Mexico in the 17th century.

Three hundred chocolate companies are based in Belgium, which have a combined turnover of nearly £2bn every year.

While the commodities analyst Mintel suggests the global market for chocolate has held steady in 2012 at roughly £52bn, the market in Western Europe shrank by 5%.

More worryingly for many of the Belgian craftsman, who buy their chocolate already ground and cooked before adding their own ingredients, processing has shifted away from factories in neighbouring Germany and the Netherlands.

Statistics from the European Cocoa Association show that processing in Europe fell by 17% over the summer.

It is not just the recession, the economic model is changing: demand for luxury chocolate is growing in emerging economies, but slowly shrinking in richer countries.

So it makes more economic sense for the larger companies to shift production to new markets where labour costs are low and the beans do not have to be shipped to Europe to be processed.

Since the recession, Belgian artisans have been mostly shielded from a dip in local demand by growing demand in eastern Europe and the so-called BRIC countries.

But there could be problems ahead when they have to pay more to buy processed chocolate from further afield.

There certainly is not an air of impending crisis.

We saw a giant chocolate sculpture of a hippopotamus draw gasps in Grand Sablon, the "quality street" where most of the famous chocolate houses have a flagship shop.

There was also the unveiling of the world's longest ever structure built purely from chocolate in the Gare du Midi near the railway platform where Eurostar trains rumble in from London.

The 34 metre long sculpture of a vintage steam train was checked by inspectors from the Guinness Book of World Records to ensure it was solid chocolate and not bulked out using cheaper ingredients.

The tourism minister Christos Doulkeridis told Sky News that he believed Belgium will keep its chocolate crown.

"We don't want to be the first one just in chocolate. We want to be the first one in chocolate of quality," he said.

The test will be whether the country can continue to maintain its reputation as a marque of quality in the teeth of foreign competition.