The Canadian divisions of Nestle, Mars, Hershey and other candy companies teamed up in a price-fixing scheme in the country's C$2 billion (US$2 billion) chocolate bar industry, according to court documents.
The documents unsealed by an Ottawa judge on Friday allege that senior executives at Hershey Canada Inc, Mars Canada Inc and Nestle Canada Inc met secretly at coffee shops, restaurants and conventions to set prices.
The conspiracy was led by major food distributor ITWAL Ltd, the documents said.
In one case, the chief executive officer of Nestle Canada handed envelopes stuffed with pricing information to a competitor, instructing the person not to be seen picking up material in his office, the documents say.
The allegations come from two search warrants obtained by Canada's federal Competition Bureau authorizing officials to seize thousands of corporate documents and computer files from Hershey, Mars, Nestle and ITWAL.
The seizure was part of an investigation focused on illegal price-fixing in chocolate products, but could expand to other types of candy depending on what was uncovered, John Pecman, the bureau's assistant deputy commissioner, said at the time.
Representatives of Canada's Hershey, Cadbury and Nestle confirmed on Nov. 28 that the companies were served papers and were cooperating with the investigation. Officials from the chocolate companies could not be reached for comment on Saturday.
According to court documents, more than 30 agents were involved in the investigation of price-fixing, a practice that allegedly began in February 2002 and continued until last month.
Canadian newspaper the Globe and Mail reported on Saturday that the bureau alleged that the collusion was initially coordinated by ITWAL. According to the court documents, ITWAL worked with the chocolate companies to force retailers to stop cutting prices for chocolate bars, which usually sell for about C$1. Stores that did not comply were cut off, the documents alleged.
None of the allegations have been proven.
Canadians buy about C$2.3 billion in chocolate and candy every year, according to the Confectionery Manufacturers Association of Canada. Cadbury Adams Canada Inc, Nestle, Hershey and Mars control two-thirds of the chocolate market in Canada and make popular products such as Kit Kat, Oh Henry! and Snickers.
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