Chocolate Price-Fixing Scandal: Hershey Canada Pleads Guilty, Fined $4 Million

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HERSHEY CANADA PRICE FIXING
Hershey Canada Inc. will pay a $4-million fine after pleading guilty to working with other companies to fix the price of chocolate products. (Scott Eells/Bloomberg via Getty Images) | Getty

OTTAWA - Hershey Canada Inc. will pay a $4-million fine after pleading guilty to working with other companies to fix the price of chocolate products.

Hershey had previously agreed to make the guilty plea and co-operate with the Competition Bureau's investigation into the alleged conspiracy.

It admitted to being involved in fixing the price of chocolate confectionery products in Canada in 2007.

Hershey has also agreed to co-operate with federal prosecutors in return for lenient treatment from the Competition Bureau.

The agency laid charges earlier this month against three other companies and three high-ranking individuals within the businesses.

Also charged by the Competition Bureau are Nestle Canada and two of its former executives, Mars Canada, and national wholesale network ITWAL Ltd. as well as ITWAL's chief executive officer.

The Competition Bureau has a leniency program for the first party to disclose an offence that hasn't been detected, provided it co-operates fully with the agency's investigation and later prosecution.

"Price-fixing is a serious criminal offence, regardless of whether it is in the chocolate confectionery market or any other industry," John Pecman, Commissioner of Competition, said in a statement Friday.

"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."

Under the Competition Act, it is a criminal offence for two or more competitors or potential competitors to conspire, agree or arrange to fix prices, allocate customers or markets, or restrict the output of a product.

The activity in the current case occurred when the maximum penalties were a fine of up to $10 million, a five-year jail sentence or both.

Under newer provisions of the act, however, a conviction could result in a fine of up to $25 million or a prison term of up to 14 years, or both.

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