Hershey, Mars and Nestlé USA have been allowed to scrutinize transaction data from two of their customers that could determine which type of customers have a valid claim for damages in an ongoing US lawsuit alleging that the companies conspired to fix chocolate prices.
The chocolate firms will be allowed to analyze transaction data from two purchasers of their products: M.R. Williams Inc and Farner-Bocken Company, both regional distributors of chocolate that sell to vending machine companies, independent grocers and convenience stores.
The data could help determine which types of customers were affected by the alleged price hikes: vending companies, grocery stores or convenience stores.
A $727m case
Around 90 claimants filed the class action lawsuit against the three chocolate firms in May this year, alleging that the companies conspired to raise chocolate prices in the US between 2002 and 2007.
If liable, Hershey, Mars and Nestlé, which together command 75% of the US chocolate market, may have to pay up to $727m in damages.
Before filing the lawsuit, the claimants had held transaction data from M.R. Williams Inc and Farner-Bocken but did not pass it to the defendants despite a court order compelling them to do so.
Expert witness Dr Bruce Owen had relied on the data from M.R. Williams Inc and Farner-Bocken as well as other data from the chocolate companies’ other customers Vistar and SuperValu in his analysis.
The claimants argued that it wasn’t necessary to pass on the data to the chocolate companies because there were millions of transactions that did not contain customer names unlike the Vistar and SuperValu data.
Hand over data, says Judge
US district Judge Christopher Conner ruled on 25 July that the chocolate companies must be able to scrutinize the undisclosed data from the M.R. Williams Inc and Farner-Bocken. He therefore granted a subpoena.
Mondelez International’s Cadbury subsidiary in the US had also been involved in the case, but it settled for $1.3m (€995,863) in December 2011 before the case was filed.
Canada and Germany price fixing
The leading chocolate companies have been embroiled in price fixing allegations in other countries in recent months.
In June, Mars and Nestlé were charged by the Canada’s competition watchdog for allegedly fixing the price of chocolate in Canada. Hershey Canada has already pleaded guilty and has been issued a $4m fine. It says its actions were limited to the Canadian marketplace.
Earlier this year, eleven chocolate companies including Nestlé and Kraft Foods (now Mondelez) were fined over €60m ($82m) for colluding to raise chocolate prices in Germany,
Hershey was not involved in that case, while Mars escaped financial penalty as one of the initial whistleblowers.