Hershey Canada fined $4-million

Pleads guilty to price-fixing

TOrON TO •

has been fined $4-million for its role in a price-fixing chocolate cartel.

The confectioner pleaded guilty to conspiring, agreeing or arranging to fix the price of chocolate products in Canada in 2007 before the Ontario Superior Court of Justice in Toronto and to contravening the criminal conspiracy provision in the Competition Act.

The Competition Bureau had urged prosecutors to give Hershey lenient treatment after the charges were laid this month, the culmination of a six-year investigation. Hershey Canada co-operated with the bureau investigation and said it will co-operate with any subsequent prosecution.

“Price-fixing is a serious criminal offence, regardless of whether it is in the chocolate confectionary market or any other industry,” said John Pecman, commissioner of competition.

“The collaboration of organizations or individuals is one of our best weapons to bring to light illegal agreements between competitors, which are secretive in nature and very difficult to detect.”

Hershey admitted in court that its senior employees spoke with other alleged members of the cartel in 2007 to exchange competitive pricing information.

It said in a statement this month that it regretted its involvement in the incident and was confident the conduct was limited to Hershey Canada and the Canadian marketplace.

“The current Hershey Canada senior management team as well as the Hershey Co. and its management had no involvement in this conduct,” it added.

Chocolate companies Nestlé Canada, Mars Canada Inc., and wholesale confectioner network ITWAL Ltd. have been charged in the scheme as well as robert Leonidas, the former president of Nestlé Canada; Sandra Martinez, former president of confectionary for Nestlé Canada and david Glenn Stevens, chief executive of ITWAL.

Nestlé Canada and Mars Canada have said they will “vigorously defend” the charges.

The competition bureau learned of the alleged cartel by way of a program that offers insiders immunity or leniency if they inform the regulator about an offence and co-operate with the investigation.

Maximum punishment for the crime is a fine of $25-million and a possible prison term of 14 years. Officials said the offence in question took place under the former conspiracy provision, which provided for a fine of up to $10-million and a potential prison term of up to five years.