The accused in a chocolate price-fixing case could face a bitter fate if convicted — millions of dollars in fines for the companies and potential jail time for the individuals.
Canada’s Competition Bureau said Thursday it is laying criminal charges against Nestle Canada Inc., Mars Canada Inc. and ITWAL Ltd., a network of independent wholesale distributors.
Also charged are former Nestle Canada president Robert Leonidas; Sandra Martinez, former president of confectionery for Nestle Canada; and David Glenn Stevens, president and chief executive of ITWAL.
The companies and individuals are accused of conspiracy under the Competition Act.
In separate statements, both Nestle and Mars said they intend to “vigorously defend” themselves against the charges. Both said the allegations date back to 2007 and earlier.
Statements from ITWAL and Hershey were not immediately available.
The bureau says it must not only prove competitors agreed to fix prices, but that the agreement would likely have “an undue economic effect” on the market.
“We are fully committed to pursuing those who engage in egregious anti-competitive behaviour that harms Canadian consumers,” said interim competition commissioner John Pecman.
“Price-fixing is a serious criminal offence and today’s charges demonstrate the Competition Bureau’s resolve to stop cartel activity in Canada.”
The bureau found out about the alleged scheme through its immunity program, under which the first party to disclose an offence or provide evidence may receive immunity, provided it fully co-operates.
Subsequent parties that help out in an investigation may receive lenient treatment.
In this case, the bureau says Hershey Canada Inc. co-operated with its investigation and the agency recommended to prosecutors that the company receive lenient treatment.
The Competition Act’s current conspiracy provision could mean a $25-million fine and/or imprisonment of up to 14 years.
But since the price-fixing took place under an earlier provision, the penalties are less harsh. In this case, the accused face a fine of up to $10 million and/or a prison term of up to five years.
The bureau says proving the law was broken will also be more complicated under the old rules.
