* Over 60 million euros of fines imposed on 11 companies
* Price increases agreed as commodity costs rose
* Mars unit cooperated with investigation, escaped fine
By Michael Hogan
HAMBURG, Jan 31 Germany's federal competition
agency has hammered 11 chocolate and confectionery companies
with 60 million euros ($81.4 million) of fines for agreeing
anti-competitive price increases.
Chocolate maker Alfred Ritter and the German units of U.S.
group Kraft Foods and Switzerland's Nestle
were among those fined by the BKA, which said that some of the
illegal agreements pushed up chocolate prices by as much as 25
The fines followed searches of company offices made in
February 2008 after the German subsidiary of U.S. food group
Mars offered its assistance in the investigation in return for
leniency from the BKA. As a result, Mars GmbH will not be fined,
the agency said.
"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 on to consumers," BKA
President Andreas Mundt said in a statement.
"Competition with competitors was quickly switched off and
consumers were burdened with price increases."
Fines totalling 21.7 million euros were announced on
Thursday after Kraft Foods Deutschland GmbH and Alfred Ritter
were found to have agreed between March and September 2007 to
increases the price for bars of chocolate, sending recommended
prices 15 to 25 percent higher in 2008.
A further 19.5 million euros in fines were imposed as a
result of talks in 2007 between Alfred Ritter, Mars GmbH and
Nestle Kaffee und Schokoladen GmbH. Price increases of about 10
percent followed in early 2008, the BKA said.
The agency did not give a breakdown on the remainder of the
60 million euros in fines.
Both Ritter and Nestle said that they intend to challenge
"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.
A Nestle Deutschland spokesman said: "We believe that the
allegations made by the cartel office are unjustified and we are
fundamentally not satisfied with the methods and manner with
which the agency has interpreted the competition law."
However, 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 comment on the size of the fine.
The BKA said that 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 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 and Zentis GmbH & CO. KG.
The sweet producers' association said that it and the
companies affected would appeal. "At no time were agreements
made that broke competition law," the association's chairman,
Helwig Gruyters, said.