On Wednesday, U.S. Middle District Chief Judge Christopher C. Conner dismissed the price-fixing allegations brought against the three largest chocolate producers in the USA: Hershey Company, Mars Inc. and Nestle U.S.A. Inc.
In all, 91 grocery, drug stores, and other businesses that purchase chocolate products from the 3 major brands had brought lawsuits that were consolidated for action by the court. The suits claimed collusion based on nearly identical price increases among the three in 2004, 2004, and 2007.
However, the judge asserted that the fact that price-fixing is “feasible” in a market dominated by just 3 major players, that doesn't mean it occurred. He also cited the fact that prices for cocoa went up 53% in 2002-2007.
The judge’s reasoning in dismissing the case should alert the business bringing the suit to the burden of proof they'll have to meet. The numbers alone don’t tell the story, as the simultaneous increase in prices of chocolate products can be explained as a normal business response to rising costs of production and materials. The judge indicated that the facts indicate no illegal cooperation, "The record reveals that (the companies) were frequently surprised by both the timing and amounts of their competitors' increases."
None of the companies here admitted fault, in contrast to a similar suit in Canada. In that case, while Mars and Nestle maintained their innocence, Hershey Canada admitted to at least one instance of price-fixing. That's something the plaintiffs may want to latch onto if they appeal, as they may decide to do.