Hershey

Federal antitrust complaint claims Hershey conspired with the world's largest chocolatiers to fix prices in the U.S

Tuesday, April 17, 2012 by: Ethan A. Huff, staff writer
Tags: Hershey, price fixing, chocolate

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(NaturalNews) Americans appear to be eating less processed chocolate products than they used to, which has led to a steady decline in the overall growth rate of the chocolate products market. And a new complaint filed in federal court alleges that The Hershey Company, America's largest chocolatier, has been conspiring with several of the world's other largest chocolatiers to fix prices in the United States in response.

Associated Wholesale Grocers (AWG), a retailer-owned cooperative representing the grocery industry, says that on three separate occasions, Hershey colluded with Mars, Nestle, and Cadbury to collectively increase chocolate prices all at the same. These illegal price fixings allegedly occurred in 2002, 2004 and 2007.

"In the face of this drop in demand and the prospect of declining revenue, defendants colluded in order to increase their prices, revenues and profits," says the complaint. "Starting in late 2002, pursuant to an unlawful agreement to fix prices, defendants engaged in a series of coordinated price increases on their chocolate candy products in the United States."

According to the filing, Mars was the first company to raise its prices in 2002, hiking up the prices of its regular-sized candy bars 10.7 percent that year, and its multi-pack bars by 22 percent. A few days later, Hershey also jacked the prices of its regular-sized bars by 10.7 percent, as well as its king-sized bars by 13.6 percent and its ten-pack bars by 15.4 percent. And just days after that, Nestle reportedly made similar price hikes.

Such activity allegedly took place again in 2004 and in 2007, with each of the companies claiming that the hikes were due to increased costs associated with raw materials and transportation. But AWG says these claims were a lie, and that the chocolate giants were merely trying to preserve their own profits and relevancy in a slowly-dying market.

"Defendants' repeated public assertions that the price increases resulted from increased input costs were false and pretextual," says the complaint. "The price increases resulted from an express agreement among defendants and their co-conspirators to fix, raise, stabilize, and maintain prices on chocolate candy products in the United States."

Hershey, Mars, Nestle, and Cadbury all use genetically-modified ingredients in their chocolate products

Beyond allegations of illegal collusion, it is important to note that each of the companies that is the subject of the new complaint uses genetically-modified (GM) ingredients in its chocolate candy products. Hershey, for instance, continues to use GM sugar and soy in its U.S. chocolate products, despite having switched to non-GM ingredients for the European market (http://www.naturalnews.com/030826_Hersheys_GMOs.html).

And Nestle, the world's largest food and nutrition company, openly admits that it uses GMOs in its American product lines on its Frequently Asked Questions, defending this use with fradulent claims that GMOs actually improve health.

Sources for this article include:

http://www.courthousenews.com/2012/04/13/45587.htm
http://www.naturalnews.com/030826_Hersheys_GMOs.html
http://www.community.nestle.com/Pages/faq.aspx

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