HAMBURG 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 percent.
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 totaling 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 their fines.
"Ritter Sport strongly rejects the allegations of unpermitted price agreements and also the allegation of an exchange of information which restricted competition or other behavior 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.
(Editing by Keiron Henderson and David Goodman)