Dec 23, 2007 12:02 am US/Eastern
Chocolatiers Accused Of Price Fixing In Canada
TORONTO (AP) ―
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Newly released court documents allege that the Canadian divisions of Nestle, Mars, Hershey and others teamed up in a price-fixing scheme in the multibillion-dollar Canadian chocolate bar market.
Nestle
Newly released court documents allege that the Canadian divisions of Nestle, Mars, Hershey and others teamed up in a price-fixing scheme in the multibillion-dollar Canadian chocolate bar market.
Court documents in the case, unsealed by an Ottawa judge Friday, allege that senior executives at Hershey Canada Inc., Mars Canada Inc. and Nestle Canada Inc. met secretly in coffee shops, restaurants and at industry conventions to set prices.
The allegations are contained in two search warrants granted last month to Canada's federal Competition Bureau as part of an investigation into the chocolate industry. The warrants authorized officials to seize thousands of corporate documents and computer files from Hershey, Mars, Nestle and ITWAL Ltd., a major food distributor. No charges have been filed.
The documents allege the chief executive of Nestle Canada handed envelopes stuffed with pricing information to a competitor, instructing the person not to be seen picking up the material in his office. ITWAL's president also allegedly sent regular updates to participants.
Representatives of Canada's Hershey, Cadbury and Nestle confirmed to The Associated Press on Nov. 28 that the companies were served papers and were cooperating with the investigation. Officials from the chocolate companies could not be reached for comment Saturday.
The alleged collusion is reported to have begun in February, 2002, and continued until a few weeks ago.
In the United States, Nestle USA and Mars Inc. said this week they will cooperate with a separate Justice Department inquiry into the pricing practices of several chocolate makers in the U.S.
Alice Nathanson, a spokeswoman for Mars Inc., said the company has been contacted by the department's antitrust division "regarding their inquiry concerning pricing practices in the U.S." She said the company will cooperate if the department initiates a formal investigation.
Mars makes Snickers, Twix, M&Ms and other candies, as well as pet food.
Laurie McDonald, a spokeswoman for Nestle USA, said the company "is aware of a preliminary investigation" and will cooperate fully. Nestle USA has not yet received any requests for documents, she said.
Canadian newspaper The Globe and Mail reported Saturday that the Competition Bureau alleges that the collusion in Canada was initially coordinated by ITWAL. According to the court documents, ITWAL worked with the chocolate companies to force retailers to stop cutting prices for chocolate bars. Stores that didn't comply were cut off, the documents alleged.
Canadians buy about $2.3 billion worth of chocolate and candy every year, according to the Confectionery Manufacturers Association of Canada.
(© 2009 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)
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