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Canada charges confectioners with price fixing; Hershey cooperated with investigation

By , - Last modified: June 7, 2013 at 12:19 PM

The Canadian Competition Bureau has filed criminal charges against divisions of Nestlé, Mars and a network of wholesale distributors, alleging they conspired to fix prices, while a Canadian division of The Hershey Co. cooperated in the investigation and is expected to plead guilty.

The bureau yesterday filed charges against Nestlé Canada Inc., Mars Canada Inc. and ITWAL Ltd., the network of national independent distributors, alleging the companies conspired to fix prices of chocolate products in Canada.

The Canadians have also charged three individuals in connection with the price fixing investigation: Robert Leonidas, former president of Nestlé Canada; Sandra Martinez, former president of confectionery for Nestlé Canada; and David Glenn Stevens, ITWAL president and CEO.

Hershey Canada was part of the price fixing discussion, although the company cooperated with Canadian authorities and the bureau recommended that the division of Dauphin County-based Hershey be given “lenient treatment,” according to a bureau statement. Hershey Canada is expected to plead guilty June 21, according to the bureau.

The case goes back to 2007, when the companies were involved in communications about the price of chocolate, said Jeff Beckman, Hershey’s spokesman.

“Hershey promptly reported the conduct to the Competition Bureau, cooperated fully with its investigation and did not implement the planned price increase that was the subject of the 2007 communication, ensuring no impact to consumers,” Beckman said in an email to the Business Journal.

The case does not involve current Hershey Canada’s senior management, and Hershey leadership in the U.S. had no involvement in the conduct, Beckman said.

Hershey Canada said yesterday in a statement it reached an agreement with authorities to plead guilty to one count of price fixing, subject to court approval.

“Hershey Canada regrets its involvement in this incident as the communications were not in keeping with The Hershey Co.’s principles, global business practices and high ethical standards,” the company said in a statement.

If convicted, the other companies and executives face up to $10 million in fines or five years in prison, according to the bureau.

 

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