German Antitrust Regulator Fines Chocolatiers over Illegal Price-Fixing Cartel
According to a news source, Germany’s Federal Cartel Office (BKA) has
imposed €60 million (US$81.4 million) in fines against 11 chocolate and
confectionary companies, including the German subsidiaries of Kraft Foods
and Nestlé SA, for allegedly establishing a cartel in the late 2000s to fix prices.
While Nestlé has reportedly indicated that it will challenge the fines, claiming
that the allegations are unjustified and that BKA misinterpreted the law, a
Kraft spokesperson has apparently confirmed that the company will pay its
fine.
BKA President Andreas Mundt said, “In 2007 raw materials prices for chocolate production such as milk and cocoa rose sharply. Companies obviously wanted to be sure they could pass these costs on to consumers. Competition with competitors was quickly switched off and consumers were burdened with price increases.” Prices reportedly rose by as much as 25 percent. Company offices were searched after a whistleblower came forward in 2008, and the investigation apparently led to evidence supporting charges that varying combinations of the companies exchanged pricing information in a series of phone calls, traded information under the guise of a German confectionery association and held illegal, anti-competitive meetings. See Reuters and Law360, January 31, 2013.
