OFFICIAL CORRECTION-UPDATE 1-Germany fines Nestle, Ritter, others for fixing chocolate prices

Thu Jan 31, 2013 8:44am EST

* Over 60 million euros of fines imposed by cartel office

* Price increases agreed as commodity costs rose

* Mars unit cooperates with investigation

By Michael Hogan

HAMBURG, Jan 31 (Reuters) - Germany's federal competition agency said on Thursday it has imposed over 60 million euros of fines for anti-competitive behaviour on 11 chocolate and confectionery firms for agreeing price increases.

The fines imposed on individual companies were not given.

"The investigation had been started after a witness leniency application was received from Mars GmbH which will receive no fine under the agency's regulations for rewarding assistance," the agency said in a statement.

The fines followed searches of company offices made in February 2008, the agency said. Mars GmbH is the German unit of the U.S. food major Mars.

Agency president Andreas Mundt said in a statement: "In 2007, raw materials prices for chocolate production such as milk and cocoa rose sharply. Companies obviously wanted to be sure that they could pass these costs onto consumers.

"Competition with competitors was quickly switched off and consumers were burdened with price increases."

Fines totalling 21.7 million euros were on Thursday announced after Kraft Foods Deutschland GmbH, the German unit of U.S. group Kraft, and German chocolate maker Alfred Ritter GmbH & Co. KG agreed price increases for chocolate bars between March and September 2007, the agency said.

Recommended chocolate prices in 2008 were raised by 15-25 percent, the agency said.

Fines totalling 19.5 million euros were imposed as a result of talks about chocolate prices between Alfred Ritter, Mars GmbH and Nestle Kaffee und Schokoladen GmbH, part of Swiss group Nestle it said.

In early 2008 average price increases of about 10 percent followed, it said.

Ritter said in a statement it would appeal.

"Ritter Sport strongly rejects the allegations of unpermitted price agreements and also the allegation of an exchange of information which restricted competition or other behaviour which was to the detriment of consumers," Ritter said.

"The company rejects this decision and will therefore appeal against the fine."

Competitors also exchanged information about planned price increases and negotiations with retailers between 2004 to early 2008 in the commercial conditions working group of the German sweet producers' association, the agency said. The sweet producers' association is unrelated to Germany's national confectionary association, the BDSI.

Companies participating in the working group included Ritter, Bahlsen GmbH & Co. KG, Griesson de Beukelaer GmbH & Co. KG, Storck GmbH & Co. KG, Katjes Fassin GmbH + Co. KG, CFP Brands Süßwarenhandels GmbH & Co. KG, Feodora Chocolade GmbH & Co. KG, Piasten GmbH & Co. KG und Zentis GmbH & CO. KG.

Kraft Foods Deutschland spokeswoman Barbara Blohberger said: "We can confirm that a mutually agreed process has been completed after which we will pay a fine."

She declined to say how large the fine would be.

No one was immediately available for comment at Nestle Deutschland.