The Competition Bureau has laid criminal charges against three companies for their role in fixing the price of chocolate confectionery products in Canada.

The bureau uncovered evidence suggesting that Nestle Canada Inc., Mars Canada Inc. and ITWAL Limited, a network of wholesale distributors, conspired, agreed or arranged to fix prices of Canadian chocolate products which is a criminal offence under the Competition Act.

Three individuals were also charged: Robert Leonidas, former President of Nestle Canada; Sandra Martinez, former President of Confectionery for Nestlé Canada; and David Glenn Stevens, President and CEO of ITWAL.

The accused face a possible fine of up to $10 million and/or imprisonment for a term of up to five years.

"We are fully committed to pursuing those who engage in egregious anti-competitive behaviour that harms Canadian consumers," said John Pecman, Interim Commissioner of Competition. "Price-fixing is a serious criminal offence and today's charges demonstrate the Competition Bureau's resolve to stop cartel activity in Canada."



Debra fleck is the chocolatier and co-owner of Epiphanie Chocolates in Calgary.

She opened her store back in 2008 and says she was surprised to hear that some members of her industry are now facing charges.

“I was surprised to hear that because they’re huge companies and they’re all fairly independent companies of each other so to get that kind of news was a bit of a surprise to me,” said Fleck.

She says her business is not affected by the announcement because the companies involved deal in a different type of product.

“What we do is so different like they do the really kind of cheap bars at the store so that’s really what they specialize in. What we specialize in is using the really high-end chocolate, the better cocoa beans in making a very different product compared to the chocolate bars,” said Fleck.

The Bureau says it became aware of the conduct through its Immunity Program which provides incentives for business organizations and individuals that come forward and cooperate with the Bureau's investigations.



In a statement on its website, Nestle Canada said it would “vigorously defend” the charges, adding that it operates “with the highest ethical business standards.”

The allegations date back to 2007 and earlier, according to the company.

A fourth company, Hershey’s Canada, has also been implicated; however, because it cooperated in the investigation, the bureau is recommending it receive lenient treatment.

Meanwhile back at the chocolate shop in the Beltline, Fleck says hopefully the announcement will make consumers more aware of the product they are using and make a change to a more honest and quality product line.

“It’s just not right that they’re doing that, that they’re price fixing. When you see that happening, it is unfair. It’s unfair to the other people out in the market that are competing in that level of confectionary,” said Fleck. “Hopefully it will make people question what kind of chocolate they’re eating and then get disgruntled with the fact that there’s price fixing with these chocolate bars and maybe get them to go into the phone book or on the Internet and find businesses such as ours and try the better line product.”

To secure a conviction, the bureau must prove competitors agreed to fix prices and that the agreement was likely to have an undue economic effect on the market.

(With files from ctvnews.ca)



