Chocolate price fixing continues
We've reported about price fixing by Big Chocolate both in the US and in Europe. Now some real action i slikely, thanks to teh retailers that sell chocolates to consumers.
Now the big vendors (including Hershey, Mars, Nestlé, and Cadbury Schweppes, along with Canadian candy distributor Itwal) are being hit with price-fixing lawsuits by retailers. Among the plaintiffs are department store chain Meijer; super market chains Safeway, Kroger, Giant Eagle and Publix; floral chain Hy-Vee; and pharmacy chains Walgreen, CVS Pharmacy, and Rite-Aid, according to a Wall Street Journal story ("Retailers' Lawsuits Accuse Candy Makers of Fixing Prices", 4/1/08).
The article cites on one of the 50 odd lawsuits:
"The chocolate confectionery product market was ripe for collusion," the lawsuit says. "In addition to the collective market power exercised by the defendants...defendants' profits from these products have suffered in recent years because of increasing health concerns, and changing consumer preferences, with respect to chocolate consumption."
In one case cited, Hershey, Nestlé and Mars all demanded 16% to 17% piece hikes in the same month. The vendors all claim that the price rises are totally coincidental with no overt agreements between companies.
The article cites another lawsuit that describes chocolate as "the prize of youngsters and the secret craving of adults. But chocolate is big business. The business of manufacturing, pricing and marketing chocolate confectionery products is susceptible to the same kinds of sinister market forces that infect other businesses as well."
Antitrust probes are happening at the government level, but clearly it is mostly big companies that can get antitrust relief versus other big company. While government antitrust is moribund, company-versus-company antitrust is still alive and kicking in the US.
This does not, of course, mean any lower prices for consumers. Whatever money changes hands will be most likely between big companies. At best, consumers are likely to get a free coupon for a couple of Three Musketeers or Butterfingers.
