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Sunday, June 23, 2024

European Commission fines Mondelēz €337.5 million for cross-border trade restrictions

The European Commission has fined Cadbury maker Mondelēz International for restricting cross-border sales of Chocolate, coffee and biscuit products between EU member states.

The multinational was fined 337.5 million for its engagement in restrictive practices which was deemed to undermine competition throughout the region.

In particular, the Commission found that Mondelēz engaged in 22 anticompetitive agreements or concerted practices, in breach of Article 101 of the Treaty on the Functioning of the European Union (‘TFEU’), by:

  • Limiting the territories or customers to which seven wholesale customers (traders/“brokers”) could resell Mondelēz’ products. One agreement also included a provision ordering Mondelēz’ customer to apply higher prices for exports compared to domestic sales. These agreements and concerted practices took place between 2012 and 2019 and covered all EU markets.
  • Preventing ten exclusive distributors active in certain Member States from replying to sale requests from customers located in other Member States without prior permission from Mondelēz. These agreements and practices took place between 2006 and 2020 and covered all the EU markets.

The Commission also found that, between 2015 and 2019, Mondelēz abused its dominant position, in breach of Article 102 of the TFEU, by:

  • Refusing to supply a broker in Germany to prevent the resale of chocolate tablet products in the territories of Austria, Belgium, Bulgaria and Romania where prices were higher.
  • Ceasing the supply of chocolate tablet products in the Netherlands to prevent them from being imported into Belgium, where Mondelēz was selling these products at higher prices.

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 took into account the fact that Mondelēz fully cooperated under the cooperation procedure and expressly acknowledged its liability for the infringement of EU competition rules. In respect of this fact, it was given a 15% fine reduction.

 

 

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