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EU Policy. US food giant Mondelēz fined €337.5m for breaching bloc’s antitrust rules

The EU executive has sanctioned the maker of products such as Oreo and Toblerone for restricting cross-border trade of chocolate, biscuits and coffee within the Single Market.
The EU executive has sanctioned the maker of products such as Oreo and Toblerone for restricting cross-border trade of chocolate, biscuits and coffee within the Single Market. Copyright Uncredited/Copyright 2016 The AP. All rights reserved. This material may not be published, broadcast, rewritten or redistribu
Copyright Uncredited/Copyright 2016 The AP. All rights reserved. This material may not be published, broadcast, rewritten or redistribu
By Gerardo Fortuna
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The EU executive has sanctioned the maker of products such as Oreo and Toblerone for restricting cross-border trade of chocolate, biscuits and coffee within the Single Market.

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After a five-year-long investigation, the EU executive found Mondelēz illegally restricted retailers from sourcing their products from member states where prices were lower, allowing the US packaged food company to maintain higher prices.

“This harms consumers who end up paying more for chocolates, biscuits and coffee. It's a key concern to European citizens and even more obvious in times of very high inflation, where many are in a cost of living crisis,” Commission Vice-President Vestager told a press conference today (23 May).

She announced a fine of €337.5mln for Mondelēz for breaching EU antitrust rules that prohibit restrictive business practices and abuse of dominant position – respectively in Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU).

The fine was reduced by 15% as the company cooperated with the Commission in the investigation enabling efficient resolution of the case.

The case concerned commercial practices of Mondelēz undermining so-called parallel trade – when traders buy products in member states where prices are lower to sell them in member states where prices are higher.

“There is a huge potential for parallel trade if it is not restricted. It puts pressure on prices to come down,” said Vestager, responsible for competition enforcement.

Parallel trade is encouraged by the Commission as a means of increasing consumer choice and keeping prices competitive.

Through their practice, which took place between 2006 and 2020, Mondelēz ensured that prices remained high by agreeing with traders whether or not they could sell in specific EU territories – the Commission identified 11 such separate agreements with seven traders.

At the same time, the US company blocked 11 exclusive distributors active in certain member states from selling Mondelēz foodstuffs to consumers located in other EU countries.

The Commission also identified abuse of dominance, in the removal of Côte d’Or chocolate bars from the Dutch market to prevent them from being imported into Belgium, where Mondelēz was selling them at higher prices.

The company also prevented a broker in Germany from buying its chocolates in Germany, where they were cheaper, and reselling them in Austria, Belgium, Bulgaria, and Romania, where prices were higher.

Contacted by Euronews, a Mondelēz spokesperson said that the “decision relates to historical, isolated incidents, most of which ceased or were remedied well in advance of the Commission's investigation.”

Many of these incidents account for a very limited part of Mondelēz International’s European business and were related to business dealings with brokers, which are typically conducted via sporadic and often one-off sales, the Mondelēz spokesperson said.

The company announced that no further measures will be necessary to finance the fine as it made an accrual for this in 2023 already.

Eurocommerce Director General Christel Delberghe welcomed the Commission decision, saying “retailers and wholesalers have been hindered for far too long by the practices of large manufacturers who deny them the freedom to source products where they want to in the Single Market.” 

Delbergh called on the Commission to act generally rather than on single cases such as these.

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