EU imposes 337.5 million Euro Antitrust Fine on Oreo maker Mondelez

On Thursday, the EU imposed a 337.5 million euro ($366 million) fine on Mondelez, the US confectioner behind well-known brands like Toblerone and Oreo, for inflating consumer prices by restricting cross-border sales. Margrethe Vestager, the EU's competition commissioner, stated that Mondelez was penalized for limiting the trade of chocolate, biscuits, and coffee within the EU, which forced consumers to pay higher prices. This action, she explained, has negatively impacted consumers during a time of high inflation and cost-of-living crises.

The fine, the EU's ninth-largest antitrust penalty, comes amid heightened concern over food costs for European households. Mondelez, previously known as Kraft, is one of the world's leading producers of chocolate, biscuits, and coffee, generating $36 billion in revenue last year. The investigation, dating back to January 2021, included raids on Mondelez offices across Europe in November 2019.

The European Commission found that Mondelez abused its dominant market position by restricting sales to lower-priced EU countries, thereby violating the EU's single market principles. For instance, Mondelez withdrew chocolate bars in the Netherlands to prevent their resale in Belgium, where prices were higher. Between 2012 and 2019, the company also limited traders' resale capabilities and enforced higher export prices compared to domestic sales. From 2015 to 2019, Mondelez refused to supply a trader in Germany to avoid lower-priced chocolate being resold in Austria, Belgium, Bulgaria, and Romania.

Vestager emphasized that allowing traders to purchase goods in cheaper countries increases competition, lowers prices, and expands consumer choice. The issue is significant enough to prompt Greek Prime Minister Kyriakos Mitsotakis to urge the EU to address price discrepancies for branded essential goods across member states in a letter to European Commission chief Ursula von der Leyen.

Mondelez responded by stating the fine pertained to "historical, isolated incidents" that were mostly resolved before the commission's investigation. The company noted that many incidents involved dealings with brokers and small-scale distributors in markets where Mondelez had a limited presence. Mondelez had already set aside 300 million euros in anticipation of the fine and stated no further financial measures would be needed to cover it.