Giant Eagle, other retailers charge chocolate companies with collusion

PITTSBURGH Grocer Giant Eagle last week filed suit against confectionary giants Hershey, Mars, Nestle and Cadbury Schweppes in U.S. District Court Western District of Pennsylvania, charging the companies have been colluding on the pricing of chocolate since 2002 through 2008. “This action arises out of an international conspiracy among the world’s leading manufacturers of chocolate confectionery products [chocolate bars, boxed chocolates and seasonal novelty chocolates, as specified in the complaint] to fix, raise, maintain or stabilize prices for those products in Canada and the United States,” the complaint states, citing ongoing investigations by both the Canadian competition authorities and the U.S. Department of Justice. European authorities, including Germany’s Federal Cartel Office, are also investigating the companies for alleged price fixing, the complaint adds.

The Giant Eagle lawsuit is at least the fourth such lawsuit to be filed this month. In the U.S. District Court Eastern District of Pennsylvania, CVS and Rite Aid filed a joint suit March 21 versus the aforementioned defendants alleging price collusion. Publix filed suit March 10 and Meijer March 7. Kroger, Safeway, Walgreens and Hy-Vee filed a joint suit March 6.

Citing statistics reported by the United States Department of Agriculture, the Giant Eagle complaint places wholesale sales of chocolate candy in the U.S. at approximately $10.2 billion, with retail sales totaling $15.6 billion. A June 2007 report from Matrade New York reported that U.S. chocolate candy sales in 2006 totaled approximately 56 percent of all candy sales, Giant Eagle added. “Defendants collectively control almost 50 percent of the global chocolate confectionery products market, with Hershey controlling 8.2 percent, Nestle 12.6 percent, Cadbury 7.5 percent and Mars 14.8 percent,” the complain reads. “Defendants The Hershey C., Mars, Inc., and Nestle USA collectively possess approximately 80 percent of the U.S. chocolate confectionery products market, with The Hershey Co. possessing about 45 percent, Mars, Inc. about 27 percent and Nestle about 9 percent.”

Giant Eagle has requested a jury trial for the case.