Hershey Canada fined $4M for chocolate price fixing

Confectionery giant Hershey Canada Inc. pleaded guilty and was fined $4 million for its role in a chocolate price-fixing cartel.

The company has plead guilty before the Superior Court of Justice in Toronto in relation to the 2007 scheme, the Competition Bureau announced Friday.

Under the Competition Act, price fixing carries a maximum penalty of $25 million and/or 14 years in prison. However, the chocolate confection cartel case fell under the former conspiracy provision, which can lead to a fine of up to $10 million and/or imprisonment for a term of up to five years.

"Price fixing is a serious criminal offence, regardless of whether it is in the chocolate confectionary market or any other industry," said John Pecman, the Competition Bureau's commissioner of competition.

"The collaboration of organizations or individuals is one of our best weapons to bring to light illegal agreements between competitors, which are secretive in nature and very difficult to detect."

Hershey also admitted that senior employees, under the auspices of Hershey, in 2007 communicated with the other members of the alleged cartel to exchange sensitive chocolate pricing information in Canada.

According to the bureau, Hershey has co-operated with the investigation and has agreed to co-operate with subsequent prosecution in return for lenient treatment.

The bureau laid charges against three other companies and three individuals — Nestlé, Mars and ITWAL Ltd., a national network of independent wholesale distributors.

The high-ranking executives charged by the bureau were:

• Former Nestlé Canada president Robert Leonidas.
• Sandra Martinez, former president of confectionery for Nestlé Canada.
• David Glenn Stevens, president and chief executive of ITWAL.

The bureau learned of the scheme through immunity and leniency programs, which lessen the criminal liability of those who reveal information about wrongdoing and co-operate with the bureau's investigation.

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