Canada chocolate price fixing saga ends as Nestlé charges stayed

By Oliver Nieburg contact

- Last updated on GMT

Chocolate cartel case stayed against Nestlé Canada and ex-CEO
Chocolate cartel case stayed against Nestlé Canada and ex-CEO

Related tags: Plaintiff, Chocolate, Pleading, Price fixing

The Public Prosecution Service of Canada (PPSC) has dropped chocolate price fixing charges against Nestlé Canada and its former CEO Robert Leonidas.

It brings Canada’s chocolate price fixing saga to an end.

The case stems for a 2007 tip off from Cadbury, which alleged it had colluded with Nestlé, Mars, Hershey and retail distributor ITWAL to artificially raise chocolate prices in Canada between 2002 and 2008.

PPSC took the decision to drop charges against Nestlé independently after Canada’s Competition Bureau referred its investigation to the criminal authority.

The Bureau’s release gave no reason for the decision and ConfectioneryNews has asked for further details.

Catherine O’Brien, vice president corporate affairs, Nestlé Canada, said her company was pleased by the decision.

"Nestlé Canada Inc. had vigorously defended against these charges.  We pride ourselves on operating under the highest ethical business standards and we are very pleased that this chapter is now behind us," ​she said.  

Cadbury and Hershey

In September this year,​ Canadian authorities stayed criminal price fixing proceedings against Mars Canada, ITWAL and its CEO as well as Nestlé’s Canada former president of Confectionery, Sandra Martinez, now global head of the Nestlé’s confectionery unit.

Cadbury, now owned by Mondelēz International, was given immunity from prosecution as the initial whistle-blower. Hershey pleaded guilty of price fixing​  and was handed a lenient $4m fine in 2013 after cooperating with authorities.

Civil cases and US

In 2013, Mars and Nestlé  settled a civil class action lawsuit​  in Canada on chocolate price fixing allegations brought by private consumers in 2008. Mars agreed to pay C$3.2m (US $2.5m) and Nestlé C$9m (US $7.1m), but both denied wrongdoing. Hershey Canada and Cadbury settled the lawsuit earlier for C$5.3m (US $4.2m) and C$5.7m (US $4.5m) respectively.

The four chocolate giants were also accused of price fixing in the US in a class action lawsuit in Pennsylvania that alleged the confectionery firms could not have achieved parallel price increases in Canada without agreeing to fix prices together in the US. That case was dismissed​, but the claimants which include retailers such as Kroger and Safeway, have appealed.

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