William Simpson
The European Union imposed a fine of 337.5 million euros ($366 million) on Thursday on Mondelez, the American confectioner behind big brands including Oreofor restricting sales of products within the bloc of 27 countries.
Mondelez, formerly called Kraft, is one of the world’s largest producers of chocolate, cookies and coffee, with revenues of $36 billion last year.
The EU fined Mondelez “because it has been restricting cross-border trade in chocolate, biscuits and coffee products within the European Union,” said EU competition commissioner Margrethe Vestager.
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“This hurt consumers, who ended up paying more for chocolate, biscuits and coffee,” she told journalists in Brussels.
“This case has to do with the price of food products. It is a fundamental concern for European citizens and even more obvious in times of very high inflation, where many are in a cost of living crisis,” he added.
The free movement of goods is one of the fundamental pillars of the EU single market.
Mondelez brands also include Philadelphia cream cheese and Ritz crackers, as well as Cadbury and Cote d’Or chocolate brands.
The commission, the EU’s powerful antitrust regulator, said Mondelez “abused its dominant position” in violation of the bloc’s rules.
It said the confectioner engaged in “anti-competitive agreements or concerted practices” between 2012 and 2019, including limiting the ability of wholesale customers to resell products and ordering them to charge higher prices to exports compared to domestic sales.
The EU investigation dates back to January 2021, but suspicions led the bloc’s investigators to raid Mondelez offices across Europe in November 2019.
According to the commission, between 2015 and 2019, Mondelez also refused to supply a trader in Germany to avoid reselling chocolate in Austria, Belgium, Bulgaria and Romania, “where prices were higher”.
It also stopped the supply of certain chocolate products in the Netherlands “to prevent them from being imported into Belgium, where Mondelez sold these products at higher prices”.
Mondelez, however, insisted that the fine was related to “historical and isolated incidents, most of which ceased or were remedied long before the commission’s investigation.”
“Many of these incidents were related to commercial negotiations with brokers, which are typically conducted through sporadic and often one-off sales, and with a limited number of small-scale distributors developing new business in EU markets where Mondelez is not present or is not present to sell the respective product”, he added in a statement.
The giant set aside 300 million euros for the fine last year.
“No other measures will be necessary to finance the fine,” he stated.
