This simply couldn't be worse news for two multinational giants in the global chocolate product market. Authorities in Canada have charged the food giants Nestle and Mars, together with a network of independent wholesale distributors, in an alleged conspiracy to fix prices of chocolates. Hershey is also involved - but they appear to have confessed to the illegal price-fixing activities and will be hoping for relatively lenient treatment in return for cooperating with the Canadian authorities.Price-fixing is illegal - plain and simple. But it's also unethical. To be caught out price-fixing is to be caught acting against the interests of consumers. Not a good place to be if you are a global brand that values its reputation.Nestle and Mars have both denied the alleged behaviour and have vowed to fight the legal action:Nestlé said in a statement:“Nestlé Canada will vigorously defend these charges. At Nestlé Canada, we pride ourselves on operating with the highest ethical business standards.” Mars issued a similar promise to fight the allegations.Time will tell whether price fixing has actually taken place.But what is price-fixing?

Price fixing is an agreement between participants on the same side in a market to buy or sell a product, service, or commodity only at a fixed price, or to control the market so that the price is maintained at a given level by controlling supply and demand.

Price fixing requires a conspiracy between some sellers or buyers - each of whom is likely to be able to exert some significance over supply and/or demand through their market share. Price fixing is commonly associated with industries which have a competitive structure that can be described as an oligopoly.