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The Chocolate Wars Erupt: Allegations Of A Chocolate Cartel Fixing Prices

Say it ain't so.  Now that Christmas and the rest of the holiday season is over, we learn that Big Chocolate is under siege.  Mars, Nestle, Hershey and Cadbury are all on the Defendants' side of the "v.", named in a class action suit for price-fixing chocolate.

Prices are one thing, but the worst allegation lays out an anathema for chocolate lovers:  "Chocolate is a commodity product that is uniform.  It does not vary materially depending on manufacturer.  The Chocolate produced by any Defendant is fungible with any other Defendant's Chocolate."

Blasphemy.  If the Plaintiffs expect to prove that claim, they'll lose.  It just can't be. 

To make matters worse, the Complaint gives away The Recipe:  "Chocolate is a confectionary product created by processing cocoa beans and other beans with milk, sugar and other ingredients," right there in paragraph 2. 

Haven't they ever seen Charlie and the Chocolate Factory?  Don't they know there are as many different kinds of chocolate as there are days in the year? 

Come on.  Even where the Complaint was filed in New Jersey there are See's Candies, which proves my point.  That store even makes special chocolates in the summer.  Chocolate, as anybody knows, is far from fungible. 

Judges can take judicial notice of that fact.

Now that we've won the case for differences in chocolate, let's talk about the price-fixing allegations.  The Plaintiffs may have a point there, as anyone who's tried to buy the stuff lately knows.  According to the Complaint, the alleged conspirators control more than 80 percent of the $16 billion U.S. chocolate market, and half of the world market.  Supposedly, they also raised prices in concert with one another this year.

$16 billion?  That's a lot of chocolate

But don't get your Snickers in a twist just yet.  The case was just filed December 21, 2007, and there's a long way to go before class certification.  We haven't heard the last of  the chocolate wars. 

Posted by J. Craig Williams on Tuesday, January 01, 2008

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