The European Union has imposed a €337.5 million ($366 million) fine on Mondelez, the American confectionery giant behind popular brands such as Toblerone and Oreo, for restricting cross-border sales and driving up consumer prices. This penalty marks the ninth-largest antitrust fine in EU history and highlights the ongoing concern over food costs amidst high inflation.
Margrethe Vestager, the EU’s Competition Commissioner, announced the fine, stating, “Mondelez has been restricting the cross-border trade of chocolate, biscuits, and coffee products within the European Union. This harmed consumers, who ended up paying more for these products.” She emphasized that the case addresses grocery prices, a critical issue for European citizens, especially during the current cost-of-living crisis.
Mondelez, formerly known as Kraft, is one of the world’s largest producers of chocolate, biscuits, and coffee, with revenues reaching $36 billion last year. The EU’s investigation, which began in January 2021, found that Mondelez had abused its dominant market position from 2012 to 2019 by limiting traders’ ability to resell products and imposing higher export prices compared to domestic sales.
In specific instances, the company withdrew chocolate bars in the Netherlands to prevent their resale in Belgium, where prices were higher. Mondelez also refused to supply a trader in Germany to avoid the resale of products in Austria, Belgium, Bulgaria, and Romania.
Vestager underscored the importance of allowing traders to buy goods in countries where they are cheaper to enhance competition, lower prices, and increase consumer choice. The free movement of goods is a cornerstone of the EU’s single market.
Mondelez brands also include Philadelphia cream cheese, Ritz crackers, Tuc salty biscuits, and chocolate brands Cadbury, Cote d’Or, and Milka. In response to the fine, Mondelez stated that the issues were “historical, isolated incidents” mostly resolved before the commission’s investigation. The company noted that these incidents involved sporadic dealings with brokers and small-scale distributors in markets where Mondelez had little presence.
Last year, Mondelez set aside €300 million in anticipation of the fine and confirmed that no further measures would be needed to finance it.