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Mars, Nestle, Hershey accused of chocolate price-fixing conspiracy in Canada

Vincent Kessler / Reuters, file

The Canadian divisions of Mars, which makes M&M's, Nestle and Hershey are accused of price-fixing.

Nestle, Mars and Hershey companies in Canada have been charged with conspiring with others to fix the price of chocolate, authorities said.

Nestle Canada and Mars Canada both said they would “vigorously defend” themselves against the claims.

Canada’s Competition Bureau said in a statement that Hershey Canada was expected to plead guilty later this month “for its role in the conspiracy to fix the price of chocolate confectionery products in Canada.”

However, the bureau said that Hershey had “cooperated” with the investigation and it had recommended to prosecutors that it should receive “lenient treatment.”

John Pecman, the interim commissioner of competition, said in the statement the bureau was committed to taking on “those who engage in egregious anti-competitive behavior that harms Canadian consumers.”

“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.

ITWAL Ltd., a national network of independent wholesale distributors, has also been charged along with Robert Leonidas, former president of Nestlé Canada; Sandra Martinez, former president of confectionery for Nestlé Canada; and David Glenn Stevens, president and chief executive of ITWAL.

The Competition Bureau said it became aware of the allegations under a program in which the first party to disclose an offense “may receive immunity” from prosecution.

“Subsequent cooperating parties may receive lenient treatment under the Bureau's Leniency Program,” it added. “These programs provide powerful incentives for business organizations and individuals to come forward and cooperate with the Bureau's investigations.”

The bureau said the accused “face the possibility of a fine of up to $10 million and/or imprisonment for a term of up to five years.”

In a statement on its website, Nestlé Canada said the allegations dated back to 2007 and before. 

“Nestlé Canada will vigorously defend these charges,” it said. “At Nestlé Canada, we pride ourselves on operating with the highest ethical business standards.”

Mars also denied the charges. "Mars Canada intends to vigorously defend itself against these allegations,” it said in a statement. “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.”

Hershey Canada said in a statement that it had "promptly reported the conduct to the Competition Bureau, cooperated fully with its investigation and did not implement the planned price increase that was the subject of the 2007 communications."