Global Processing

German Candy Makers Raided

February 13, 2008
The Associated Press reported recently that the German Federal Cartel Office raided the offices of seven candy and chocolate makers amid allegations of a conspiracy to fix prices.

Silke Kaul, a spokeswoman for the agency said the companies -- including the German offices of Mars, Kraft Foods Inc., Nestle SA, and Ritter -- had agreed at the beginning of the year to raise prices.

The Kraft Foods office in Germany confirmed it had been searched. Nestle headquarters in Vevey, Switzerland, was not familiar with the allegations.

Troesch attributed the rise in chocolate prices to the massive increase -- between 30 percent and 100 percent -- in the price of raw materials in the past year.

The Cartel Office said it suspected that the companies had conspired with one another to raise their prices even higher than the increase in the price of raw materials, such as cocoa and nuts, would have demanded.

If the Cartel Office finds evidence of collaboration, the companies face possible fines that could amount to 10 percent of their annual income.

The investigation may also broaden, according to Kaul.

Late last year, Canadian regulators opened an investigation of Nestle, Cadbury, Hershey and others to determine if the companies had collaborated in the nation''s multibillion-dollar business of chocolate bars.

Canada''s Competition Bureau served search warrants on several major bar makers, requiring them to turn over reams of documents on pricing arrangements.