Canadian watchdog charges Nestle, Mars for fixing chocolate prices

Canadian regulators have charged two of the world's biggest chocolate companies, Nestlé and Mars, together with a network of independent wholesale distributors with criminal offences for allegedly conspiring to fix prices of chocolates.

The  five-year investigation by Canada's Competition Bureau that was triggered by a whistleblower that uncovered "evidence suggesting that the accused conspired, agreed or arranged to fix prices of chocolate products," the Competition Bureau said in a statement.

The Competition Bureau has charged Nestlé Canada Inc, Mars Canada Inc and ITWAL Limited (ITWAL), a national network of independent wholesale distributors.

The watchdog has also charged three individuals, Robert Leonidas, former president of Nestlé Canada, Sandra Martinez, former president of Confectionery for Nestlé Canada; and David Glenn Stevens, president and CEO of ITWAL.

If convicted, the three will be fined up to $10 million and up to five years imprisonment.

Hershey Canada Inc., also part of the price fixing cartel, will  receive lenient treatment since it cooperated with the investigation and has agreed to plead guilty at a hearing on 21 June in exchange for leniency.

Details of the price fixing will emerge during Hershey Canada's hearing, but according to several reports, the cartel colluded to raise prices for chocolate bars sold across Canada from 2002 to 2008, including Kit Kat, Coffee Crisp, Aero, Twix, Snickers, Bounty and M&M.

"We are fully committed to pursuing those who engage in egregious anti-competitive behaviour that harms Canadian consumers," said John Pecman, Interim Commissioner of Canada's Competition Bureau.

"Price-fixing is a serious criminal offence and today's charges demonstrate the Competition Bureau's resolve to stop cartel activity in Canada," he added.

Mars, Nestle and ITWAL said they intend to "vigorously defend" themselves against the allegations.

"Mars Canada intends to vigorously defend itself against these allegations. It is Mars Canada's policy not to comment on pending litigation and we are therefore unable to make any additional comments in relation to this matter, which is now before the court," Mars Canada said in a statement.

In 2008, Nestle, Mars and others were part of a similar price-fixing probe in Germany, where the cartel increased chocolate and confectionery prices by 25 per cent.

Nestle was among the other chocolate and confectionery companies, who were fined a total of $83 million, while Mars escaped paying any fines since it cooperated with the investigation.