Canadian Chocolate Makers Face Price-Fixing Probe

December 23, 2007 8:09 a.m. EST

Toronto, Canada (AHN) - Canadian chocolate makers are being investigated for allegedly fixing the price of confectionery in the Canadian market to the detriment of consumers. Court records unsealed Friday show that top officials of Canadian divisions of Nestle, Mars, Hershey and others colluded in a price-fixing scheme from February 2002 to until only a few weeks ago.

They supposedly transacted secretly in coffee shops, restaurants and even at industry conventions to set prices.

Further, Nestle Canada's chief executive supposedly handed envelopes stuffed with pricing information to a competitor, with strict orders to be discreet in picking up the materials. ITWAL Ltd., a major food distributor, also allegedly sent regularly posted participants.

ITWAL reportedly spearheaded the scheme by forcing retailers to keep prices of chocolate bars or risk a supply stoppage, according to Canadian newspaper The Globe and Mail, quoting court documents. The Associated Press reports that as early as Nov. 28, representatives of chocolate company's Canadian units have confirmed that they were informed of the probe.

The candy makers said they are fully cooperating with authorities. Canada's federal Competition Bureau issued warrants on the corporations as part of its probe on the chocolate industry and the supposed price-fixing.

With the issuance, corporate documents and computer files from Hershey, Mars, Nestle and ITWAL, may be legally seized to determine if there is basis to file cases in courts.

A similar investigation is also ongoing in the U.S. with no less than the Department of Justice at the helm.