CHOCOLATE-MAKERS are in trouble again.
Now, both Canada and Germany are out to stop companies like Mars, Nestle, Kraft Foods, Cadbury and Hershey from antitrust activities.
Competition watchdog authorities are investigating these chocolate candy manufacturers and suggest that they have formed cartels, conspiring to keep prices artificially high for years.
Ethic Soup first wrote about chocolate price-fixing in a post 10 months ago. At that time, Mars, Hershey, Nestle and Cadbury controlled 75 percent of the U.S. chocolate market and had 87 different antitrust suits against them. They were accused of holding secret meetings where they conspired to raise chocolate prices.
PRICEFIXING SPREAD TO RETAILERS
Now other countries are joining the charge because the same thing seems to be happening in their countries -- only it's spread even further, involving retailers too.
Last week,The Globe and Mail (Toronto) reported that:
"Pretty much anyone who bought a chocolate bar between 2001 and 2008 is part of a class action lawsuit alleging that Canada's biggest producers of confectionery products conspired to keep prices artificially high for most of the previous decade."
In addition to alleging the companies conspired to fix the prices of chocolate products, the class action further alleges representatives of the companies held secret meetings to discuss prices and penalized stores that undercut the recommended retail prices by limiting the supply of chocolates available to them.
LARGE RETAILERS INVOLVED
Last month, Cadbury agreed it would pay $5.7 million to have itself removed as a defendant in the lawsuit. In addition, the company is providing the plaintiffs with valuable data to help with the litigation against the other defendants, according to lawyers working on the class action.
In Europe, German antitrust officials are presently probing some of the country's largest supermarkets and retailers over suspected cases of price-fixing chocolate -- both at the production and resale levels, reports Spielgel (DE). German antitrust investigators believe as many as 24 companies set illegal minimum prices on products.
SURPRISE SEARCHES
In January, investigators launched an unexpected search of the offices of some of the largest names in Germany's retail sector. Spiegel reports that 56 German Cartel Office employees and 62 police officers visited offices of Metro, a retail giant in Germany and the country's largest supermarket chains. They also visited offices of chocolate-maker Mars.
"Investigators learned about a meeting of several sweets manufacturers and suspected a chocolate cartel had been forged," reports Spiegel. "Ensuing searches at the German headquarters of Kraft in Bremen made the company nervous -- and officials confessed to the competition authority that illegal fixing had taken place."
This story reminds me of the MillerCoors energy drink, Sparks, with its alcohol and caffeine ingredients. A coalition of Attorneys General from 13 states investigated MillerCoors for selling and marketing the drink to youth. Last December the brewer made a deal with the AG's to stop selling Sparks.
ADDICTIVE INGREDIENTS
Isn't chocolate addictive too, like alcohol and caffeine? In fact, chocolate-makers are adding caffeine to many of their candy bars. It's all about addiction. If you get your customers hooked, they'll be your customers forever and keep coming back for more -- even when you collude to fix the prices higher and higher. Just sayin'...it's only candy.
Other Articles on Chocolate in Ethic Soup:
TO READ "DON'T MESS WITH CHOCOLATE" CLICK HERE.
TO READ "CHOCOLATE PRICEFIXING: HERSHEY, MARKS, NESTLE CADBURY" CLICK HERE.
TO READ "AMID ANTITRUST PRICEFIXING CHARGES MARS GIVES CANDY AWAY FREE" CLICK HERE.
by Sharon McEachern
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