Canada charges chocolate makers Mars, Nestle with price fixing

TORONTO (REUTERS) - Canada has charged two of the world's biggest chocolate makers, Nestle SA and Mars Inc with colluding to fix the price of their products, the country's competition watchdog said on Thursday.

Canada's Competition Bureau also said that the Canadian arm of Hershey Co was expected to confess to fixing prices, but recommended it get lenient treatment because it cooperated with the investigation.

Nestle could not immediately be reached for comment, but Mars said in a statement that it intends to vigorously defend itself against the allegations.

Hershey released a statement expressing regret for its actions and laying the responsibility at the feet of now-departed employees.

"The current Hershey Canada senior management team as well as The Hershey Company and its management had no involvement in this conduct," the statement said.

The charges come after a five-year investigation by the Canadian law enforcement agency.

The criminal charges are the latest development in a scandal that has already resulted in a major class-action suit. Hershey, Mars and Nestle all agreed to settlements as part of that suit.

A similar class-action suit in the United States is still making its way through a Pennsylvania court.

The Competition Bureau said it also charged three individuals: Robert Leonidas, the former chief executive of Nestle Canada; Sandra Martinez, former Nestle Canada president and David Glenn Stevens, president and chief executive of national grocery distributor ITWAL Limited.

ITWAL Limited, a national network of independent wholesale distributors, has also been charged.

Because their alleged price fixing occurred before the recent amendments to Canada's competition laws, the three executives face the old penalty of up to five years in prison if convicted. The companies and the executives could each be fined up to US$10 million (S$12.5 million) if found guilty.

Join ST's Telegram channel and get the latest breaking news delivered to you.