EC imposes €337.5m fine on Mondelez for trade obstruction

The European Commission imposed a fine of 337.5 million euros (approximately £291 million) on Mondelez International, the owner of brands such as Cote d'Or, Milka, and Oreo, for obstructing trade in chocolate, cookies, and coffee products between EU countries. According to the Commission, the American company violated EU competition rules.

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

"Prices for food differ between Member States. Trade over the 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.

The corporation, among other things, 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 stopped supplying chocolate products to the Netherlands to prevent their import into Belgium, where they sold their products at higher prices.

The EC found that these illegal practices prevent retailers from freely 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 setting the fine amount, the EC took into account the severity and duration of the violations, as well as the value of the corporation's sales. Additionally, it considered that the company cooperated during the investigation and admitted to violating EU competition rules. As a result, the Commission reduced the fine by 15%.

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