The Canadian branches of Nestlé and Mars were both slapped with criminal charges yesterday, with Canada's Competition Bureau accusing both of price-fixing the chocolate market following a 5-year investigation. Hershey was also party to the scheme, which dates to 2007 and earlier, but the bureau recommended leniency because it cooperated with investigators, Reuters reports. "Price-fixing is a serious criminal offense," the Competition Bureau said, promising "to stop cartel activity in Canada." Two former top Nestlé executives were charged individually as well, as was the wholesale distributor Itwal and its CEO.
Court documents describe a series of secret meetings between top Nestlé, Mars, and Hershey executives to set prices. Nestlé Canada's CEO also allegedly shared envelopes full of pricing details with one competitor, warning the competitor not to be seen retrieving them, the Toronto Star reports. Hershey says it promptly reported the scheme to regulators and never implemented a planned price hike. Hershey will plead guilty to one count of price fixing on June 21. The maximum penalty the accused face: a fine of up to $10 million as well as a prison term of up to five years. (Read more Nestle stories.)