GERMANY: Nestle to appeal price-fixing fine
Nestle is one of 11 confectionery companies to have been handed fines
Nestle has said it will appeal a decision by Germany's federal competition agency to impose a fine for agreeing anti-competitive price increases in the country.
The Swiss food giant is one of 11 confectionery companies to have been handed fines totalling EUR60m (US$81.4m) for price fixing offences. Others include the German unit of Kraft Foods and Alfred Ritter.
The fines resulted from searches of company offices in February 2008 after the German subsidiary of Mars Inc filed a leniency application in return for assistance into the investigation.
"In 2007, prices for important raw materials for the production of chocolate, such as milk and cocoa, increased significantly," Bundeskartellamt president Andreas Mundt said.
"Some of the companies wanted to make sure that they could directly pass on their increased costs to the consumers. Instead of finding an entrepreneurial solution, the companies opted for illegal measures. Competition with rivals was simply eliminated and customers burdened with coordinated price rises."
Nestle Deutschland said it was notified of the fine by the Federal Cartel Office on 30 February and said it believes the allegations "are not justified".
"We fundamentally disagree with the way in which the authority has applied the competition act in this case," a spokesperson for the company said. "We will, therefore, file an appeal with the Higher Regional Court of Düsseldorf and seek an annulment of the decision."
Kraft Foods Deutschland and Alfred Ritter were found to have agreed between March and September 2007 to increases the price for bars of chocolate, sending recommended prices 15-25 percent higher in 2008.
A spokesperson for Kraft told just-food it had agreed a "mutual settlement" with the competition agency but declined to comment further.
Alfred Ritter did not return a request for comment at the time of going to press.
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