Canadian Manufacturing

Hershey, others agree to pay $23M in Chocolategate class-action

Companies also charged by federal Competition Bureau in alleged price-fixing scheme



LONDON, Ont.—A host of Canadian candy bar companies have settled class-action lawsuits in a case of alleged chocolate price-fixing.

According to lawyers involved in the case, defendants Cadbury Adams Canada Inc., Hershey Canada Inc., Nestlé Canada Inc. and Mars Canada Inc. paid a combined $23.2-million in order to resolve the matter outside court.

The defendants deny the allegations, but settled “to avoid the expense, inconvenience and distraction of further protracted litigation.”

The settlements were approved by the courts in Ontario, Quebec and British Columbia.

As part of the settlement, consumers and commercial purchasers who bought Cadbury, Hershey, Nestlé and Mars products between Oct. 1, 2005, and Sept. 30, 2007, will be eligible to make a claim for compensation.

According to the lawyers, it is not necessary to have purchase records in order to make a claim, although consumer claims that are not supported by purchase records are capped at $50.

Consumers who have not have made the threshold level of purchases required to make a claim for compensation will be indirectly compensated through a distribution of 10 per cent of the available settlement funds to the following national non-profit organizations: Consumers Association of Canada; Public Interest Advocacy Centre; Phelps Centre for the Study of Government and Business (University of British Columbia); Centre for Interuniversity Research and Analysis of Organizations; and Rotman Institute for International Business (University of Toronto).

Any settlement money received by the organizations will be used to fund food and nutritional programs across Canada.

The deadline for filing a claim to receive direct compensation is Dec. 15, 2013.

In June, Hershey will agreed to pay a $4-million fine after pleading guilty to working with other companies to fix the price of chocolate products.

Nestle, Mars and distributor ITWAL Ltd. were also charged by Competition Bureau as part of the case.

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