Hershey Price-Fixing Fine Costs $4 Million

Gina Kashuk

Hersey's price-fixing fine was settled at $4 million (Canadian) after admitting to participating in a price-fixing scheme.

Fox News reports that the company received lenient treatment for it cooperation in an investigation of all antitrust accounts by allowing a plea to be entered into at the Ontario Superior Court.

Hershey is not the only company to recently come under scrutiny in Canada regarding these schemes. Companies such as Mars and Nestle as well as a network of independent wholesale distributors have also been charged by Canadian Authorities. The crack down on chocolate price-fixing has lead to individuals being charged as well; including the former president of Nestle Canada, Robert Leonides, former president of Confection for Nestle Canada, Sandra Martinez and the head of food distribution for ITWAL, Canada, David Glenn Stevens.

Hershey's price-fixing fine is related to the sale of chocolate bars throughout Canada during the years of 2002 and 2008. The suit includes household name brands including Bounty and M&Ms, Coffee Crisp, Snickers, Twix, Kit Kat and Aero bars.

Hershey claimed that the scheme was confined to the Canadian market. The company also stated that in 2007 the executives that were involved were no longer employed by the Hershey, Pennsylvania-based company.

According to official court records, the Canadian subsidiary of the Hershey company became involved in the conspiracy towards the latter half of 2007. Hershey reported that it freely engaged in "competitively sensitive pricing information," either through first hand communications with competitors --- Cadbury, Nestle, and Mars --- or through ITWAL directly, the latter being the largest buyer of chocolate in Canada.

The clandestine arrangement between the companies began to slowly crumble after Cadbury suddenly removed itself from the cartel in late 2007, subsequently causing Hershey to opt out of raising their prices.

Hersey's price-fixing fine is related to their combined take from chocolate sales at drugstores, grocers, convenience stores, and gas stations during this time period was $154 million Canadian, or $147 million US Dollars.

The Competition Bureau first became aware of the scheme through information revealed by both leniency and immunity programs, which minimize any criminal liability of parties who expose information concerning wrongdoing and openly co-operate with any ongoing bureau investigations.