Antitrust Regulators Look Into U.S. Chocolate Prices
(Bloomberg) - U.S. antitrust regulators are making inquiries about pricing practices in the chocolate industry, makers of the confectionary said.
Mars Inc., the maker of M& Ms, was contacted by the Justice Department and plans to cooperate with officials ``if they initiate an investigation,'' spokeswoman Alice Nathanson said yesterday in a statement.
Nestle SA's U.S. unit said it was aware of a preliminary inquiry into chocolate marketing practices and planned to ``cooperate fully,'' according to a company statement.
Chocolate makers, which are being probed in Canada over price-fixing allegations, are struggling to maintain profits as the price of milk rises. Milk futures on the Chicago Mercantile Exchange have jumped 51 percent since the start of the year as demand for U.S. dairy exports, especially from China and Latin America, outpaced production.
``We have not received any document requests,'' Vevey , Switzerland-based Nestle, the world's largest food company, said in the statement. Nestle makes KitKat and Coffee Crisp chocolates.
Nestle raised the prices of dairy products by 8 percent in the nine months through September.
The inquiry was reported earlier yesterday in the Wall Street Journal.
``We can't comment on legal matters, including ongoing investigations,'' Cadbury Schweppes Plc spokeswoman Luisa Girotto said. ``We would cooperate in any investigation.'' London-based Cadbury, the world's biggest confectionary company, sells chocolate brands such as Dairy Milk and Fruit & Nut in Canada.
Hershey Co. spokesman Kirk Saville declined to comment. The company is based in Hershey, Pennsylvania. In April, Hershey raised prices for the first time in two years, with Reese's Peanut Butter Cups and its namesake chocolate bars increasing 4 percent to 5 percent.
Hershey rose 34 cents to $39.43 at 4:04 p.m. in New York Stock Exchange composite trading. Nestle gained 4 Swiss francs to 519.5 in Zurich. Cadbury increased 8 pence to 639 pence in London.
The Justice Department in Washington declined to comment. Canadian authorities said last month they were investigating allegations that companies were fixing prices for chocolate bars. Hershey and Nestle confirmed they had been contacted by Canadian investigators.