The Bitter Truth of the Chocolate Conspiracy
Canada is investigating a number of high-profile chocolate giants for allegedly trying to cut themselves a sweet deal through price-fixing in the multi-trillion dollar chocolate industry. This conspiracy, run by a powerful dark and sinister group known as the Chocalistas, will make bank fraud look like a picnic.
Canada's Competition Bureau served search warrants on several major bar makers this week requiring them to turn over reams of documents on their pricing arrangements.
Regulators are probing alleged price-fixing by affiliates of Nestle, Cadbury, Hershey, Mars and others, according to media reports.
"The bureau is investigating alleged anti-competitive practices in the chocolate confectionery industry," Marilyne Nahum, spokeswoman for Competition Bureau.
"The Superior Court of Ontario has granted search warrants based on evidence that there are reasonable grounds to believe that a number of suppliers in the chocolate confectionery industry have engaged in activities contrary to the conspiracy provisions of the Competition Act," she said.
And just last week, the German Federal Cartel Office raided the offices of seven of leading chocolate companies including Mars Inc., Kraft Foods Inc. and Nestle SA searching for documents. Three months ago, Canada's Competition Bureau searched the offices of several companies, many of the same ones as in Germany.
The Canadian investigation sparked several American lawsuits accusing the world's biggest chocolate companies of violating antitrust laws.
The U.S. Department of Justice declined to confirm it is investigating, yet several companies confirmed receiving inquiries.
The cases detail how informants kept letters for years, showing that Canadian executives exchanged confidential pricing information dating back to 2002 through e-mail, phone and meetings.
Marilyne Nahum, a spokeswoman for the Competition Bureau, declined to discuss the details of the ongoing investigation. The companies could face criminal conspiracy charges, which carry penalties of up to $10 million Canadian dollars and/or five years in prison.
According to affidavits submitted in an Ontario court to obtain search warrants, top executives at Hershey Co., Mars and Nestle met secretly in coffee shops, restaurants and conventions to set prices. The volume of commerce involved is potentially in the billions of dollars per year.
The German Cartel Office has said it suspected the companies had conspired with one another to raise their prices even higher than the increase in the price of raw materials, such as cocoa and nuts, would have demanded. If the office finds evidence of collaboration, the companies face possible fines of up to 10 percent of their annual income.
Mars North America was contacted in early December by the U.S. Justice Department about a preliminary inquiry concerning pricing practices in the U.S. chocolate confectionery industry, said spokeswoman Alice Nathanson.
She also confirmed German officials visited the company's offices in Viersen last week. In Canada, Mars continues to cooperate the Canadian Competition Bureau's investigation.
Edie Burge, a spokeswoman for Nestle USA, said the company "is aware of a preliminary investigation into marketing practices in the U.S. chocolate industry being conducted by the Department of Justice," and will cooperate with any investigation, but has not been contacted.
A New Jersey confectionery company filed the first lawsuit in late December, charging price fixing by an international cartel of companies -- Hershey and Mars, the leading chocolate companies in the U.S., along with other companies such as Nestle and Cadbury Schweppes PLC.
The confectioners claim that a chocolate cartel raised prices three times since 2003 are planning another hike for 2009.
More to come as our investigations continue ...
Willy Wonka 10/23/2008
Sal
When the Roads and Paths end, learn to guide yourself through the wilderness
Beyond the Path
Sal
When the Roads and Paths end, learn to guide yourself through the wilderness
Beyond the Path
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Sal
When the Roads and Paths end, learn to guide yourself through the wilderness
Beyond the Path
Sal
When the Roads and Paths end, learn to guide yourself through the wilderness
Beyond the Path