Nestlé denies wrong doing in Canadian price fixing row

09-Jun-2013 - Last updated on 05-Jul-2013 at 07:43 GMT

Nestlé Canada has denied acting improperly after being accused of price-fixing

Nestlé Canada has denied acting improperly after allegations of price fixing in the country by the Canadian Competition Bureau. Mars Canada, and the distributors ITWAL have also been charged with competition offences.

A Nestlé spokesperson said: “We have been advised by the Canadian Competition Bureau of charges related to alleged anti-competitive chocolate confectionery practices in Canada against a number of companies, including Nestlé Canada and some of its former members of senior management. These allegations date back to 2007 and earlier.

‘Vigorously defend itself’

“Nestlé Canada will vigorously defend itself against these charges and its lawyers will be working closely with the lawyers representing the former involved managers with the same purpose. Given that legal proceedings are on-going, we are not able to make any further comments at this time.”

The Competition Bureau in Ottawa claimed to have uncovered evidence pointing to price-fixing. It’s investigation had uncovered evidence that the companies had “conspired, agreed or arranged to fix prices of chocolate products”, it alleged.

The bureau had referred the evidence to the Public Prosecution Service of Canada (PPSC) and charges had been made against the accused.

John Pecman, interim commissioner of competition, said: “We are fully committed to pursuing those who engage in egregious anti-competitive behaviour that harms Canadian consumers. Price-fixing is a serious criminal offence and today's charges demonstrate the Competition Bureau's resolve to stop cartel activity in Canada.”

Cartel activity

Mars Canada and ITWAL, a network of independent wholesale distributors, also denied the accusations.

Mars Canada said in a statement: “Mars Canada intends to vigorously defend itself against these allegations. It is Mars Canada's policy not to comment on pending litigation and we are therefore unable to make any additional comments in relation to this matter, which is now before the court.”

The bureau said that the Canadian division of the US confectionary firm Hershey – which had also been accused of price-fixing – was co-operating with its investigation.

Three people have been charged after the investigation. They are: Robert Leonidas, former Nestlé Canada president; Sandra Martinez, the firm’s former president of confectionery; and David Glenn Stevens, ITWAL president and chief executive.

The case is due to be heard in Ottawa later this month.

Chocolate Bar Tempest

Posted by Adrian Sark, 21 June 2013 - 12:23 GMT

Amazing to see the government's priorities! The chocolate bar business is essentially a one button market - the convenience stores that sell the majority of the bars have one button on the register for chocolate bars. Manufacturers who have attempted to 'lead' pricing action or more importantly tried to reduce price have always regretted it as their action disappeared into retail margin.

ITWAL, as the largest wholesaler of chocolate bars, would advise manufacturers of impending price action as they were notified by the trade. That is not price fixing but an attempt to deal with the retail reality.

The fact that this is deemed egregious behaviour by the government is laughable when they refuse to take action on the collusion on pricing in the banking industry for example.

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