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Sunday, May 11, 2008

The Willy Wonka Conspiracy update: the pile-on begins

In “The Willy Wonka Conspiracy,” I reported that...

Chocolate lovers are being encouraged by Merchant Law Group to join the Chocolate Makers Class Action lawsuit against North America's major chocolate producers. Hershey, Mars, Nestle and Cadbury are being investigated by the Competition Bureau for allegedly conspiring to keep chocolate prices artificially high.

Evatt Merchant, the Saskatoon lawyer heading the class action, is inviting anyone who has purchased even a single chocolate bar to participate in the suit.

Read “The Willy Wonka Conspiracy” here.

Today, US law firm Carey & Danis invited American chocolate consumers who purchased products as far back as 2002 from any of the companies named in Canada’s Competition Bureau investigation to contact the firm to “discuss your rights.” While the U.S. Department of Justice has not yet started an official investigation, the lawyers at Carey & Danis are already gearing up for a payday and putting on their best outraged faces. This company’s crusading corporate mission is “aiding victims of corporate abuse, neglect and greed.” (I didn't know "greed" was a crime. What about gluttony?)

Consumers, of course, have no actual right to chocolate, and certainly no right to chocolate at some arbitrarily determined “fair” price. Chocolate companies, on the other hand, have a right to make chocolate and to charge consumers whatever the market will bear for this chocolate. That’s free enterprise. It’s simply a matter of property and contract rights, rights that used to mean something in American and Canadian law.

Here’s how I see this case unfolding:

First, the major chocolate producers will be found guilty of conspiring to sell chocolate at an above market price, which is collusion. (Of course, a market price is the price at which goods clear is a free market, so the notion of an above market price wrongly suggests that there is an objective price.)

Second, the companies will be forced to sell their products at a below market price as punishment. Below market pricing is called predatory pricing, which is a violation of the Competition Act, but this is what some are suggesting could happen. (Of course, the Old Dutch chip people might then have a case against the chocolate people for unfair competition in the junk food space.)

Third, a federal Fat Tax will be introduced that will send chocolate and junk food prices soaring. Nobody in government really cares that chocolate prices are allegedly too high; they care only that the beneficiary of this practice would be private companies and not the government.

You can call this the “too high, too low, just right” prediction.

Posted by Matthew Johnston on May 11, 2008 | Permalink

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Comments

A fair representation of the Anti-Combines Act Matthew. None of the manufacturers that you mention make a decent bar with the exception of the Nestle high end bars. If you want chocolate worth eating you have to pay a premium price for it and it is worth the price. Those who eat the other stuff like candy bars and not chocolate.

Posted by: DML | 2008-05-11 11:10:39 PM


Maybe this could work for fuel prices as well.
HaHaHa. How about soda drinks.

Posted by: Guess What | 2008-05-12 12:30:07 AM


MJ, I was almost believing that the government acts in my best interest. After all, they know what's best for me and always act benevolently on my behalf.

And since the government is so concerned about protecting us from monopolies, surely they would want to protect us from predatory pricing. Oh wait, I forgot about CPP, Helthcare, Airports, Canada Post...

Posted by: TM | 2008-05-12 9:09:23 AM



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