$50M price-fixing suit filed against Canadian chocolate makers

A class-action lawsuit has been filed alleging several major Canadian chocolate makers are involved in a price-fixing conspiracy, a Toronto law firm announced Tuesday.

The suit filed by Juroviesky and Ricci late last week in the Ontario Superior Court of Justice seeks $50 million in damages, according to Eli Karp, an associate with the firm.

Karp said the suit has one plaintiff but potentially includes any Canadian who has consumed chocolate products since February 2004.

The suit alleges chocolate makers Nestle, Hershey, Cadbury and Mars have conspired to inflate prices by five per cent or more on at least three occasions.

Such collusion would be in violation of Canada's Competition Act and several provincial consumer protection laws.

Karp said the statement of claim alleges that "executives of the four companies exchanged price information with each other" in order to raise prices in a "conspiracy against the Canadian public."

The allegations have not been proven in court.

The firm said in a release that the claim is "the result of an extensive and independent investigation conducted by Juroviesky and Ricci." Karp confirmed such an investigation did take place but could not comment on the length of the probe.

German chocolate makers also accused of fixing prices

Also Tuesday, Hershey revealed it is named in about 50 civil suits in the United States and three in Canada in connection with price-fixing allegations.

Hershey said in a statement that it "is co-operating with the government investigations and inquiries and intends to defend the lawsuits vigorously."

The European Commission has also asked for information on Hershey's pricing practices and the U.S. Department of Justice is conducting an inquiry.

In November, media reports said Canada's Competition Bureau served search warrants on the candy bar makers to investigate a price-fixing scheme

Last week, the German Federal Cartel office accused seven chocolate firms in the country, including Ritter, Kraft, Nestle and Mars of a conspiracy to fix prices.

The companies had allegedly hiked chocolate prices by as much as 12 per cent. Chocolate makers have blamed increased costs for cocoa and milk as the reason for the price rise.

Canadians buy about $2.3-billion worth of chocolate and candy every year, according to the Confectionery Manufacturers Association of Canada.

Karp said chocolate sales in Canada in 2007 were about $1.4 billion.