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23 May 2024

European Commission looking into chocolate pricing

By Agencies

The European Commission has asked for information on pricing practices by candymakers, a signal that regulators across the globe are taking a broader look into allegations of an industry-wide price-fixing scheme.


In its annual report released on Tuesday, The Hershey Co said it has fielded a request for information from the European Commission. A spokeswoman for Mars Inc also said on Tuesday that the company received a request from the body in mid-January. Both companies said they are cooperating, and declined to say what kind of information was requested.


Hershey said it and other companies are named in about 50 civil antitrust suits in the United States and three in Canada on behalf of consumers and distributors in connection with price-fixing allegations.


The company’s annual report contains the first indication that European regulators are now looking at the US candymaker, which does only a small portion of its business in Europe. While the United States’ approximately $16 billion (Dh58.72 billion) candy market is the biggest in the world, Europeans eat more candy and chocolate per person than people anywhere else.


Hershey, the largest US candymaker, “is cooperating with the government investigations and inquiries and intends to defend the lawsuits vigorously,” it said in an eight-sentence statement on the matter.


Hershey, which makes Hershey’s Kisses and Reese’s brands, said the lawsuits should not have a “material adverse effect” on the company’s finances or operations.


Mars, which makes the world’s best-selling brands Snickers and M&Ms and is America’s second-biggest candymaker, has a much larger presence in Europe.


An investigation by Canada’s Competition Bureau into price-fixing allegations against the Canadian divisions of Nestle SA, Cadbury Schweppes PLC, Hershey, Mars and others became public in November.


Since then, candymakers have said the US Department of Justice is conducting an inquiry. Last week, the German Federal Cartel Office accused seven candy and chocolatemakers, including Mars, Nestle and Kraft Foods Inc, of a conspiracy to fix prices. (AP)