By Jon Hood
June 14, 2010
Canada gets an occasional jealous stare from its neighbors to the south for its comprehensive health care system and clean city streets, but soon Canadians might really have something to brag about: free chocolate.
A class action suit brought against several chocolate companies is potentially nearing its completion, as the Supreme Court of British Columbia ruled on Friday that a proposed settlement could proceed. The suit, filed in 2008, claims the Canadian arms of several chocolate manufacturers -- including Nestle, Hershey, Mars, and Cadbury Adams -- colluded to artificially inflate the price of such candy staples as M&Ms;, Oh Henry!, Smarties, and Caramilk bars.
The suit portrays the defendants as dark underlords of the candy world, alleging that representatives from each company secretly met to discuss the conspiracy, and that the companies withheld their products from stores that sold candy at lower-than-recommended prices.
The settlement offer was made solely by Cadbury Adams, which said it would be willing to pay $5.7 million to extricate itself from the proceedings. Cadbury also agreed to provide potentially valuable information about the other three defendant companies. None of those companies is on board with the offer, and Hershey has announced that it is appealing the judge's decision to let the settlement go forward.
Still, attorneys for the plaintiffs are optimistic.
"We were able to negotiate a very favorable settlement," said Luciana Brasil, an attorney involved in the proceedings. "If we're able to ultimately resolve all the claims against the other parties, then all [plaintiffs] are going to potentially benefit. Whether that will mean a direct financial benefit or some other kind of benefit, we don't know."
But Charles Wright, another lawyer involved in the suit, said the average consumer has lost so little money in the alleged scheme that he wouldn't even be entitled to a single candy bar.
"It's going to take a lot of chocolate bars to make the claim big enough to make it worth anybody's while to evaluate it individually," Wright said.
The suit, which grew out of an investigation by Canada's Competition Bureau, was brought on behalf of any person who bought one of the subject products in Canada between 2001 and 2008.