Two other leading chocolate brands, a national distributor, and three industry executives have been charged with conspiracy under the Competition Act to fix the prices of chocolate in Canada.
NestléCanada Inc., Mars Canada Inc., Itwal Ltd. and the three individuals accused plan to fight the charges against them, the Toronto region court heard.
A trial date is set for Oct. 3.
Court heard that Hershey Canada entered into a conspiracy in the latter half of 2007 to lessen competition in the sale and supply of everyday chocolate, including chocolate bars, according to a statement of admission and agreed upon facts read into the record on Friday.
At the time, the four largest chocolate makers accounted for 75.3 per cent of chocolate sales in Canada, a market valued at $840 million, court heard. Hershey’s share was $154 million, or 18.3 per cent. Nestlé was the market leader with 22.6 per cent, court heard.
During the period, senior employees at Hershey and their counterparts at other chocolate companies exchanged competitively sensitive pricing information, either directly or through the distributor Itwal, court heard Friday.
On Nov. 22, 2007, this conduct led to an explicit agreement during a phone call between a senior manager at Hershey and senior officer at Nestlé, court heard.
During the call, the Nestlé officer alluded to a previous conversation in which Nestlé had disclosed its pricing plans, court heard. In response, the senior manager at Hershey said Hershey planned to follow suit, court heard.
The maximum fine at the time the alleged offences occurred was $10 million, the court heard.
The Competition Bureau agreed to a lesser penalty because Hershey co-operated with investigators under the bureau’s leniency program, court heard.
Hershey was the second company to step forward after chocolate maker Cadbury Adams Canada brought the matter to the bureau’s attention in 2007. Cadbury Adams received immunity from prosecution.
Hershey did not raise its prices in 2007, has expressed its remorse and fired the individuals involved, lawyer Martin Low, a partner at McMillan, told the court.
Hershey also previously paid $5.3 million to settle a class-action lawsuit arising out of the price-fixing allegations, Low noted.
The individuals accused of participating in the alleged price-fixing scheme are Robert Leonidas, former president of Nestlé Canada Inc., Sandra Martinez, former president of confectionary for Nestlé Canada, and David Glenn Stevens, president and chief executive officer of Itwal Canada.
Original Article
Source: thestar.com
Author: Dana Flavelle
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