- Mondelez was found to have illegally restricted trade in certain products.
- Belvita owner also ‘abused his dominant position’ in the chocolate market
The European Union has fined Mondelez, owner of Cadbury and Toblerone, €337.5 million for anti-competitive behavior.
The confectionery giant, formerly Kraft Foods, was found to have illegally restricted cross-border trade in certain products and “abused its dominant position” in the chocolate market.
As a result, consumers paid more for chocolate, biscuits and coffee, according to Margrethe Vestager, EU competition commissioner.
Sanction: Mondelez, owner of Toblerone, has been fined 337.5 million euros by the European Union
An investigation by the European Commission found that Mondelēz reached agreements with seven brokers and dealers between 2012 and 2019, limiting the customers and countries to which they could resell Mondelēz products.
One of these agreements contained a provision that required a wholesale customer to impose higher prices on exports than on domestic sales.
Ten other exclusive distributors were prohibited from responding to sales requests from customers in other EU countries without authorization from Mondelez.
Regulators also said Mondelez curbed parallel trade – the importing of goods from one country and exporting them to a higher-priced country.
The manufacturer of Belvita and Oreo cookies refused to supply chocolate bars to a German intermediary so as not to resell them in Austria, Belgium, Bulgaria and Romania.
At the same time, it banned the same products in the Netherlands to prevent their export to Belgium.
The EU said curbing parallel trade could reduce product diversity and harm buyers because suppliers and manufacturers could charge higher prices.
“Restrictions on parallel trade therefore amount to non-regulatory barriers to the better functioning of the single market and are among the most serious restrictions on competition,” he added.
The European Single Market is designed to facilitate the freedom of goods, services, capital and movement between EU member states, as well as between European Free Trade Association members Norway, Switzerland, Liechtenstein and Iceland.
Vestager said the trade bloc is designed to keep prices low, improve competition and strengthen consumer choice.
“We are determined to defend fundamental freedoms in the EU and ensure that EU citizens have access to the widest choice at the lowest prices the market can offer,” he said.
The EU fine against Mondelez comes amid a widespread cost of living crisis and criticism that food companies are making huge profits from price increases.
A Mondelez spokesperson said the fine concerned “isolated incidents, most of which ceased or were remedied long before the commission’s investigation.”
They added: ‘This historic matter is not representative of who we are or the strong compliance culture we strive for.
“At Mondelez International, we place the greatest emphasis on integrity and respect for the laws of the countries in which we operate.”