The Wall Street Journal-20080212-Germany Raids Offices of Candy Makers

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Germany Raids Offices of Candy Makers

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Associated Press

The German Federal Cartel Office raided the offices of seven candy and chocolate makers amid allegations of a conspiracy to fix prices.

The agency alleges that the companies -- including the German offices of Mars Inc., Kraft Foods Inc., Nestle SA and Alfred Ritter GmbH -- agreed at the beginning of the year to raise prices, said Silke Kaul, a spokeswoman for the agency.

The cartel office said it suspected the companies conspired with one another to raise prices higher than a recent increase in the price of raw materials would have demanded. "We made the decision on the basis of intensive market analysis," Ms. Kaul said. The raids took place Thursday.

The Kraft Foods office in Germany confirmed it had been searched. "We are cooperating with the cartel office. We are contributing our part to a speedy investigation," Kraft spokeswoman Silke Troesch said yesterday.

Ms. Troesch attributed the rise in chocolate prices to the increase -- between 30% and 100% -- in the price of raw materials in the past year.

A representative at Nestle headquarters in Vevey, Switzerland, wasn't familiar with the allegations. "What, precisely, their contention is, I don't know," said Francois-Xavier Perroud, a spokesman for Nestle.

Mars and Ritter had no comment on the German probe.

If the cartel office determines any wrongdoing, the accused companies could face fines of up to 10% of their annual income.

In November, regulators in Canada began an investigation into price- fixing allegations on the part of the Canadian divisions of Hershey Co., Cadbury Schweppes PLC, Mars and Nestle SA.