TORONTO Regulators have launched an investigation into allegations that the Canadian divisions of Nestle, Cadbury, Hershey and others have teamed up in a price-fixing scheme in the multibillion-dollar Canadian business of chocolate bars, company officials confirmed Wednesday.
Canada's Competition Bureau went to the offices of Nestle in Canada, but spokesman Francois-Xavier Perroud said he could not release any other details.
"I can confirm that the competition bureau has started an investigation of virtually all major chocolate producers in Canada," Perroud said. "I can confirm that we are fully cooperating with the authorities. You will appreciate that I cannot comment on an ongoing investigation."
Canada's Competition Bureau served search warrants on several major bar makers this week, requiring them to turn over reams of documents on their pricing arrangements, investigators told The Globe and Mail of Toronto.
"We can confirm that we are investigating alleged anticompetitive practices in the chocolate confectionery industry," said John Pecman, the bureau's assistant deputy commissioner in the criminal matters branch. "The volume of commerce affected here is definitely potentially in the billions of dollars per year."
Pecman said an Ontario court recently "granted search warrants based on the evidence that there are reasonable grounds to believe that a number of the suppliers in the chocolate industry have engaged in activities contrary to the conspiracy provisions, that's a cartel, of the Competition Act."
The investigation is focused on chocolate products but could expand to other types of candy depending on what, if anything, is uncovered, he said.
"There are no conclusions of wrongdoing at this time," Pecman said. "We're just at the investigative stage."
Canadian investigators contacted Hershey on Monday, said Kirk Saville, a company spokesman in Hershey, Pa.
"We are cooperating fully with Canadian authorities," Saville said. "At this point we do not have any details and are unable to comment on this matter. However, it is a strict policy of the Hershey Co. to operate ethically and comply with all applicable laws."
Other companies confirmed the investigation and said they were working with Canadian authorities.
"We are aware of it, but all we can say is that we can't comment on any ongoing investigation, but we are cooperating with any inquiries," Cadbury spokesman Simon Taylor told The Associated Press on Wednesday in London.
Canadians buy about $2.3-billion worth of chocolate and candy every year, according to the Confectionery Manufacturers Association of Canada.