Brussels – The European Commission is taking action to enable all EU citizens to have fair access to cookies, coffee, and pampering without trade barriers. Mondelēz International Inc., one of the world’s largest food manufacturers, was fined €337.5 million for violating EU competition rules regarding anti-competitive agreements to restrict cross-border trade and abuse of dominant position in some national markets in the sale of chocolate bars.
“Mondelez did so to maintain higher prices for its products to the detriment of consumers,” is the attack that came today (May 23) from the EU Commission’s executive vice president and head of competition Margrethe Vestager. Recalling how food prices vary across member states – “for chocolate from 10 to 40 percent” – the EU antitrust chief underlined that “Trade over borders of Member States in the internal market can lower prices and increase the availability of products for consumers. This is especially important in times of high inflation.” The U.S.-based multinational Mondelēz is one of the world’s largest producers of chocolate and cookies and owns brands such as Côte d’Or, Milka, Oreo, Ritz, Toblerone, and Tuc, and –until 2015 –Hag, Jacobs, and Velours Noir.
According to European Commission statement, Mondelēz implemented 22 anticompetitive agreements or concerted practices, restricting the territories or customers to which seven wholesale customers could resell its products between 2012 and 2019 (one agreement also included a provision ordering the customer to charge higher prices for exports than for domestic sales) and preventing 10 exclusive distributors active in some member states from responding to sales requests from customers located in other member states without Mondelēz’s prior authorization between 2006 and 2020. The second violation of EU competition rules involves the abuse of the dominant position between 2015 and 2019. More specifically, Mondelēz refused to provide an intermediary in Germany to prevent the resale of chocolate bars in Austria, Belgium, Bulgaria, and Romania, where prices were higher and stopped supplying chocolate bars in the Netherlands to prevent their import into Belgium, where the U.S. multinational was selling the same products at higher prices.
The ultimate goal of Mondelēz was to “avoid that cross-border trade would lead to price decreases in countries with higher prices,” an illegal practice that allowed the multinational food company to “continue to charge more for its products, to the detriment of consumers” in the European Union. The EU Commission concluded that “Mondelēz’s illegal practices prevented retailers from being able to freely source products in Member States with lower prices and artificially partitioned the internal market.” The Commission fined the company €337.5 million.
