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Price fixing

Nestlé drops appeals for chocolate cartel fines in Germany

By Oliver Nieburg+

20-Jan-2017
Last updated on 20-Jan-2017 at 11:39 GMT2017-01-20T11:39:33Z

Nestlé has stopped contesting fines for its part in two price fixing cases. ©iStock/jeancliclac
Nestlé has stopped contesting fines for its part in two price fixing cases. ©iStock/jeancliclac

Nestlé Deutschland has withdrawn appeals in two cases for which it was fined for colluding to fix prices in Germany.

Eleven chocolate companies including Nestlé were fined around €62m ($66m) in 2013 for colluding to raise chocolate prices in Germany in 2007.

In a separate case, Nestlé was fined €20m ($21m) in 2013 for exchanging sensitive competitive information that led to price rises on chocolate and other CPG products with Kraft Foods Deutschland GmbH, Unilever Deutschland Holding AG and Dr. August Oetker Nahrungsmittel KG.

Nestlé contested the fines, but has now dropped its appeals in both cases, according to the Germany’s federal competition agency Bundeskartellamt.

The eleven companies

Eleven companies colluded to raise chocolate prices in 2007, according to German authorities: Nestlé, Kraft (now Mondelēz), Bahlsen, Griesson de Beukelaer, Storck, Katjes Fassin, CFP Brands, Süßwarenhandels, Feodora Chocolade, Piasten and Zentis. Mars and Ritter escaped financial penalty as the initial whistleblowers.

Nestlé: 'Allegations are not justified'

But the company says it still questions the allegations against it.

Alexander Antonoff, vice head of corporate communications, at Nestlé, told ConfectioneryNews: “We believed – and still believe - that the Federal Cartel Office’s allegations are not justified, and we fundamentally disagree with the way in which the authority has applied the competition act in this case.

"However, we take note of recent case law of the European Courts on the substantive analysis of information exchange cases and the German Federal Court of Justice on the methodology of calculating fines in antitrust cases in Germany. In light of these judgments, Nestlé Deutschland AG has decided to withdraw its appeals filed with the Higher Regional Court of Düsseldorf.”

Court papers claim Nestlé increased prices for brands such as KitKat, Lion and Smarties by an average of 10% at the start of 2008 and also downsized many of these products following discussions with other companies.

No appeals from other companies are pending in either case.

Canada price fixing allegations

Nestlé has previously been accused of price fixing in other geographies.

The company was alleged to have colluded with Mars and Hershey retail distributor ITWAL to artificially increase chocolate prices in Canada between 2002 and 2008.

Hershey pleaded guilty of price fixing  and was handed a lenient $4m fine in 2013 after cooperating with authorities.

Canadian authorities dropped the criminal case against Nestlé Canada and its former CEO Robert Leonidas last year, while the case against Mars was dropped earlier.

Nestlé separately settled a civil case in Canada on similar allegations for C$9m (US $7.1m), but denied wrongdoing. Hershey, Cadbury and Mars also paid to settle the suit.

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