Canada chocolate price fixing: Mars charge dropped, but Nestlé case resumes

The Public Prosecution Service of Canada yesterday said it had dropped the case against Mars Canada, ITWAL Ltd. and its president and CEO David Glenn Stevens and Nestlé Canada’s former president of Confectionery, Sandra Martinez.

However it will continue to pursue Nestlé Canada and ex-Nestlé Canada president Robert Leonidas.

The prosecution service gave no reason for the stay against certain parties in a press release​​ yesterday. ConfectioneryNews has asked for its rationale but it said it could not discuss further as the matter remains before the court.

Mars told ConfectioneryNews: "We are pleased that criminal proceedings against Mars Canada have been stayed," but said it could not comment any further.

Nestlé Canada's vice president of corporate affairs said in a statement:"Nestlé Canada will continue to vigorously defend against the charges. At Nestlé Canada, we pride ourselves on operating with the highest ethical business standards."​

Cadbury tip-off​

The case stems for a 2007 tip off from Cadbury where it alleged it had colluded with Nestlé, Mars, Hershey and a retail distributor to artificially raise chocolate prices in Canada in 2007.

Cadbury, now owned by Mondelēz International, was given immunity from prosecution as the initial whistleblower. Hershey last year pleaded guilty of price fixing​​ and was handed a lenient $4m fine after cooperating with competition authorities.

Mars and Nestlé were both criminally charged, along with Leonidas, Martinez and retail distributor ITWAL Limited and its president and CEO David Glenn Steven. Some of the those charges have now been stayed.

Civil case settlements​

Mars and Nestlé already settled a class action civil lawsuit​​ in Canada on chocolate price fixing allegations brought by private consumers in 2008. Mars agreed to pay C$3.2m (US $2.5m) and Nestlé C$9m (US $7.1m), but both denied wrongdoing. Hershey Canada and Cadbury settled the lawsuit earlier for C$5.3m (US $4.2m) and C$5.7m (US $4.5m) respectively.

The four chocolate giants were also accused of price fixing in the US in a class action lawsuit in Pennsylvania that alleged the confectionery firms could not have achieved parallel price increases in Canada without agreeing to fix prices together in the US. That case was dismissed​​, but the claimants which include retailers such as Kroger and Safeway, have appealed.​​

In 2013, eleven chocolate companies, including Nestlé, Kraft (now Mondelēz), were fined over €60m ($82m) for colluding to raise chocolate prices in Germany.​​ Mars escaped penalty as one of the whistleblowers.