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German agency applies "sweet fines"

Thursday, January 31 15:47:49

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 totalling 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. ( C) Reuters