Sunday, April 20, 2008

The Candy Biz Ain't Sweet

The largest candy companies are under attack on multiple fronts for alleged price-fixing:
Giant Eagle filed a federal lawsuit last week that accuses major chocolate makers of conspiring to fix prices to limit competition, according to published reports. The Hershey Co., Mars Inc., Nestlé and Cadbury Schweppes are defendants in the suit that alleges that the companies fraudulently claimed higher material costs and raised prices by more than 15% around the same time period. The suit cites the Canadian Competition Bureau’s ongoing investigation of the companies. The bureau allegedly uncovered communications between executives at the chocolate makers as they made plans to jointly raise prices, according to reports.
In addition to the Canadian investigation and Giant Eagle's suit, I've seen reports of suits by other major retailers (CVS, Meijer, Kroger, etc) and also consumer groups.

That there would be price increases at the same time would not be surprising, given that the product price is dependent to a great extent on commodity prices for ingredients. If though there are memos, as alleged, then that's another matter.

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