UPDATE 1-Canada charges chocolate makers Mars, Nestle with price fixing

Thu Jun 6, 2013 4:46pm EDT

By Peter N Henderson

TORONTO, June 6 (Reuters) - Canada has charged two of the world's biggest candy makers, Nestle SA and Mars Inc, with colluding to fix the price of chocolate, the Canadian competition watchdog said on Thursday.

Canada's Competition Bureau recommended lenient treatment for the Canadian arm of Hershey Co, which cooperated with the investigation. Hershey said it had reached a deal with the bureau, and would plead guilty to a single count of price fixing.

Both Mars and Nestle said they intend to "vigorously defend" themselves against the allegations.

In its statement Hershey expressed regret for its actions and blamed workers who had already left the company.

"The current Hershey Canada senior management team as well as The Hershey Company and its management had no involvement in this conduct," the statement said.

The Competition Bureau has been probing the allegations of price fixing for five years in a scandal that has already resulted in a major class-action suit. Hershey, Mars and Nestle all agreed to settlements as part of that suit.

A similar class-action suit in the United States is still making its way through a Pennsylvania court.

The Canadian Competition Bureau has also charged ITWAL Limited, a national network of independent wholesale distributors, as well as three individuals: Robert Leonidas, the former chief executive of Nestle Canada; Sandra Martinez, former Nestle Canada president and David Glenn Stevens, president and chief executive ITWAL Limited.

The three executives face up to five years in prison if convicted, while the companies and the executives could each be fined up to $10 million.

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