Sweet conspiracy? Nestle, Mars charged with chocolate price-fixing in Canada
Published Thursday, June 6, 2013 12:37PM EDT
Last Updated Thursday, June 6, 2013 8:21PM EDT
Three companies are facing conspiracy charges over their alleged role in fixing chocolate prices in Canada, the Competition Bureau announced Thursday.
The bureau uncovered evidence suggesting that Nestle Canada Inc., Mars Canada Inc. and ITWAL Limited, a network of wholesale distributors, conspired, agreed or arranged to fix prices of Canadian chocolate products – a criminal offence under the Competition Act.
Three individuals were also charged: Robert Leonidas, former President of Nestle Canada; Sandra Martinez, former President of Confectionery for Nestlé Canada; and David Glenn Stevens, President and CEO of ITWAL.
The accused face a possible fine of up to $10 million and/or imprisonment for a term of up to five years.
"We are fully committed to pursuing those who engage in egregious anti-competitive behaviour that harms Canadian consumers," said John Pecman, Interim Commissioner of Competition, in a statement. "Price-fixing is a serious criminal offence and today's charges demonstrate the Competition Bureau's resolve to stop cartel activity in Canada."
In a statement on its website, Nestle Canada said it would “vigorously defend” the charges, adding that it operates “with the highest ethical business standards.”
The allegations date back to 2007 and earlier, according to the company.
A fourth company, Hershey’s Canada, has also been implicated; however, because it cooperated in the investigation, the bureau is recommending it receive lenient treatment.
The bureau first became aware of the price-fixing cartel through its immunity program. The program helps parties receive immunity for providing evidence leading to a referral of evidence to the Public Prosecution Service of Canada or disclosing offences not yet detected by the bureau.
To secure a conviction, the bureau must prove competitors agreed to fix prices and that the agreement was likely to have an undue economic effect on the market.