Chocolate price-fixing charges laid
Not too long ago I read an article that the Interim Commissioner of Competition in Canada’s Competition Bureau had laid charges against three companies for price-fixing chocolate confectionary products.
Evidence uncovered and reported by CTV news suggests that Nestle Canada Inc, Mars Canada Inc, and ITWAL Limited (a network of wholesale distributors) had engaged in price-fixing, which is a criminal offense in Canada under the Competition Act. Hershey’s Canada was also implicated, but cooperated with the investigation, so the Competition Bureau recommended that their treatment be far more lenient than the other three companies which are facing criminal charges including imprisonment for the individuals charged and/or a fine up to $10 million.
I remember reading a long time ago (when I was trying out Choklat’s chocolates) that the price of chocolate has risen significantly in recent years, and this makes me wonder if these huge, multi-national companies have a hand in this…
In order for the Competition Bureau to secure a conviction, they must prove that the companies agreed to fix prices, and that the agreement was likely to have an “undue economic effect on the market” according to the CTV article.
The CTV article went on to interview a local independent chocolatiere, who clarified that the companies involved were drastically different from her own company. The companies involved are ‘cheap’ candy bars, and high-end products using better cocoa beans and other ingredients aren’t involved.
My thought is that these huge multi-national companies buy up a huge percentage of the available cocoa beans, and thus if there is price-fixing going on, they are directly impacting the ability for other cocoa bean purchasers to competitively buy the beans, and price their final product.
Read the full article for more information.