US: Judge quashes price-fix claim against chocolate giants
Mars was one of the firms accused of conspiring to price fix in the US
A class action suit had alleged the companies had conspired to raise chocolate prices in the US between 2002 and 2007.
However, in the district court in Pennsylvania yesterday (27 February), Chief Judge Conner said there was a lack of evidence to suggest the three firms had worked together to engage in price fixing.
"Plaintiffs are before the court with nothing more than speculation as to the who, what, when, where, and how of the communications that allegedly facilitated the parallel price increases. Nothing scandalous or improper has been discovered within our borders, and no evidence permits a reasonable inference of a price-fixing agreement. Plaintiffs offer no meaningful arguments or evidence to counter defendants' legitimate business explanations for the parallel price increases," the court said.
"Accordingly, the court cannot but conclude that defendants' conduct is "as consistent with permissible competition as with illegal conspiracy."
In September, Nestle and Mars were among companies to settle a class action lawsuit in Canada accusing them of price fixing and price maintenance.
The two manufacturers, plus then Kraft Foods subsidiary Cadbury Adams Canada and wholesale distributor ITWAL, agreed to resolve the civil action being brought against them. The firms agreed to pay a total of C$23.2m to settle allegations they colluded to fix the price of chocolate in Canada between 2001 and 2007 - although they denied the claims.
"The defendants deny the allegations and have settled to avoid the expense, inconvenience and distraction of further protracted litigation," a statement read.
In June, Hershey was fined C$4m after admitting it fixed the price of chocolate products in the country as part of the Canadian government's criminal investigation. In 2012, the company also paid C$5.3m to settle the civil case.
In Pennsylvania, Chief Judge Conner, reflecting on the affair in Canada, noted the US claim against Hershey, Nestle and Mars was "plausible" but ruled in favour of them.
"Initially, plaintiffs' claims of a domestic price-fixing conspiracy were quite plausible. The Canadian trade spend conspiracy raised the specter of Sherman Act violations in our contiguous marketplace. Litigation and merits discovery properly ensued. But, at the end of the day, the probata could not match the allegata".
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