NewsEuropean Commission fines Mondelez $358 million for trade obstruction

European Commission fines Mondelez $358 million for trade obstruction

Milka chocolate is one of the brands owned by Mondelez International
Milka chocolate is one of the brands owned by Mondelez International
Images source: © Adobe Stock | Rafael de Matos Carvalho

8:19 AM EDT, May 23, 2024, updated: 8:57 AM EDT, May 23, 2024

The European Commission has imposed a fine of €337.5 million (approximately $358 million) on Mondelez International, the owner of brands such as Côte d'Or, Milka, and Oreo. The fine was issued for obstructing trade in chocolate, cookies, and coffee products between EU countries, as the American company violated EU competition rules.

The EC's investigation revealed that Mondelez International breached competition regulations by engaging in agreements restricting the trade of chocolate, cookies, and coffee products between EU nations. Mondelez is one of the world's largest producers of chocolate and cookies and has owned the coffee brand Jacobs since 2015.

"Prices for food differ between Member States. 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. In today’s decision, we find that Mondelēz illegally limited cross-border sales across the EU. Mondelez did so to maintain higher prices for its products to the detriment of consumers. We have therefore fined Mondelēz €337.5 million," said Margrethe Vestager, EC Vice-President in charge of competition policy, in Brussels.

"Illegal practices." EC justifies the decision to fine

The corporation, among other actions, refused to supply an intermediary in Germany to prevent them from reselling chocolate products in Austria, Belgium, Bulgaria, and Romania, where prices were higher. They also halted the supply of chocolate products to the Netherlands to prevent their import into Belgium, where the products were sold at higher prices.

The EC determined that these illegal practices prevent retailers from sourcing products in member states at lower prices and cause an artificial division of the internal market.

The 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. Mondelēz' aim was to avoid that cross-border trade would lead to price decreases in countries with higher prices. Such illegal practices allowed Mondelēz to continue charging more for its own products, to the ultimate detriment of consumers in the EU, the Commission assessed.

In determining the acceptable amount, the EC considered the severity and duration of the violations and the value of the corporation's sales. Additionally, it acknowledged that the company cooperated during the investigation and admitted to violating EU competition rules, resulting in a 15% reduction of the fine.

We have contacted the Mondelez press office for a statement regarding the European Commission's decision to impose a fine. We are waiting for a response.

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