NEWLY-RELEASED court documents allege that the Canadian divisions of Nestle, Mars, Hershey and others teamed up in a price-fixing scheme in the multi-billion-dollar Canadian chocolate bar market.

Court documents in the case, unsealed by an Ottawa judge on Friday, allege that senior executives at Hershey Canada Inc, Mars Canada Inc and Nestle Canada Inc met secretly in coffee shops, restaurants and at industry conventions to set prices.

The allegations are contained in two search warrants granted last month to Canada's federal Competition Bureau as part of an investigation into the chocolate industry. The warrants authorized officials to seize thousands of corporate documents and computer files from Hershey, Mars, Nestle and ITWAL Ltd, a major food distributor. No charges have been filed.

The documents allege the chief executive of Nestle Canada handed envelopes stuffed with pricing information to a competitor, instructing the person not to be seen picking up the material in his office. ITWAL's president also allegedly sent regular updates to participants.

Representatives of Canada's Hershey, Cadbury and Nestle confirmed to the Associated Press on November 28 that the companies were served papers and were cooperating with the probe. Officials from the chocolate firms could not be reached for comment last Saturday.

The alleged collusion is reported to have begun in February 2002 and continued until a few weeks ago.

In the United States, Nestle USA and Mars Inc said last week they will cooperate with a separate Justice Department inquiry into the pricing practices of several chocolate makers in the US.

Alice Nathanson, a spokeswoman for Mars Inc, said the company has been contacted by the department's antitrust division "regarding their inquiry concerning pricing practices in the US".