Chocolate companies to pay $23.2M in price-fixing class action
LONDON, Ont. -- Here's a bit of sweet news for some chocolate lovers.
Four of the largest chocolate producers in Canada have agreed to pay more than $23 million to settle a class-action lawsuit alleging price-fixing and price maintenance in the Canadian market.
The defendants -- Cadbury Adams Canada Inc., Hershey Canada Inc., Nestle Canada Inc. and Mars Canada Inc., as well as distributor ITWAL Limited -- all deny the allegations.
However, they have settled to avoid the expense, inconvenience and distraction of further protracted litigation, says a statement released Monday by lawyers in the case.
The settlements, which reflect a compromise of disputed claims, have been approved by the courts in Ontario, British Columbia and Quebec as being fair, reasonable and in the best interests of class members, says the release.
It says together the defendants have paid $23.2 million for the benefit of all persons who bought Cadbury, Hershey, Nestle and/or Mars chocolate products in Canada between Feb. 1, 2001 and Dec. 31, 2008.
The release says the courts in Ontario, British Columbia and Quebec have also approved a method for distributing the settlement amounts, less fees and expenses, to consumers and commercial purchasers with chocolate product purchases between Oct. 1, 2005, and September 30, 2007.
It says consumers who purchased at least $1,000 in chocolate products between Oct. 1, 2005, and Sept. 30, 2007, will be eligible to make a claim for direct monetary compensation.
They don't need purchase records in order to make a claim, although consumer claims that are not supported by purchase records are capped at $50. And, says the release, to make up for the fact that not all consumers will have made the threshold level of $1,000, 10 per cent of the available settlement will be distributed to several non-profit organizations to promote competition and consumer education and advocacy in Canada.
The deadline for filing a claim to receive direct compensation is December 15, 2013.
The release says persons who believe they might qualify for direct compensation can obtain more information at chocolateclassaction.com.
In June, Hershey Canada Inc. pleaded guilty to its role in fixing the price of chocolate products in Canada and was fined $4-million.
The Competition Bureau said the Mississauga, Ont.,-based company admitted in the Ontario Superior Court of Justice that it conspired, agreed or arranged to fix the price of chocolate confectionery products in Canada in 2007.
The company has also agreed to co-operate with federal prosecutors.
Charges have also been laid against Nestle Canada and two of its former executives; Mars Canada, and national wholesale network ITWAL Ltd., as well as ITWAL's chief executive officer.
Nestle, Mars and Itwal Ltd. have said they intend to defend themselves against the charges. A trial date is set for Oct. 3.