Meijer Inc. Sues Chocolate-Makers

April 12, 2008
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WALKER — Meijer Inc. has joined more than 50 companies and consumers in filing lawsuits accusing major chocolate-makers of conspiring to fix prices, in the wake of investigations in Canada, Germany and the U.S.

Meijer spokeswoman Stacie Behler said the 181-store retailer based in Walker would have no comment on the lawsuit, filed last month in federal court in Philadelphia.

The U.S. Department of Justice is investigating price-fixing allegations, spokeswoman Gina Talanova said. Canada’s Competition Bureau and the German Federal Cartel Office also are reportedly investigating similar accusations in those countries.

“The Antitrust Division is investigating the possibility of anti-competitive practices in the chocolate manufacturing industry,” Department of Justice spokeswoman Gina Talamona said.

The investigations have prompted retailers and consumers to file federal lawsuits across the country. Some may be combined under class-action status, but the Meijer suit is not among them, said David P. Germaine, a Chicago corporate litigation and antitrust lawyer representing Meijer. He declined to comment further.

Among the retailers suing chocolate manufacturers are Kroger Co., CVS Corp., Walgreen Co. and Rite Aid Inc., which all do business in Michigan.

Chocolate had a $10.6 billion share of $18.9 billion in manufacturers’ sales in the confectionery industry in 2007, the National Confectioners Association reported. While the number of chocolate pounds sold in the U.S. by manufacturers went up by just 0.3 percent last year, manufacturers’ sales figures grew by 2.9 percent, according to the association’s Web site.

Retail sales growth for the $29.1 billion candy industry has slowed recently, especially at grocers. Chocolate claimed a $16.3 billion share of retail sales last year. Drug stores have seen the highest rate of sales growth recently, compared to grocers and mass merchandisers.

Meijer’s lawsuit contends that The Hershey Co., Mars and Nestle conspired to set prices on chocolate candy. It accuses the companies of “conducting covert, secret conspiracy communications or meetings in the United States, Canada or Europe” starting in 2002, with the first signs of slower sales growth. The lawsuit claims the chocolate-makers did not compete “on the sale of chocolate confectionery products to particular accounts or geographic area” and says they eliminated “discounts, rebates or allowances.”

The filing does not detail losses suffered by Meijer due to the alleged price-fixing, but asks for a jury trial and an injunction.

According to the Pittsburgh Tribune-Review, Giant Eagle, another retailer suing the manufacturers, bought $189.3 million in chocolate products over five years. Giant Eagle is a four-state supermarket chain with 223 outlets.

Requests for comment from Hershey, Mars and Nestle were unsuccessful.

Blaming higher costs for milk and cocoa, Hershey, Mars and Nestle most recently increased prices by 4 percent to 13 percent in December and January. 

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