Cadbury owner Mondelez fined €337.5m by EU for anti-competitive practices

Cadbury and Toblerone owner Mondelez has been fined €337.5million by the European Union for anti-competitive behaviour.

The confectionery giant, formerly Kraft Foods, was discovered to have unlawfully restricted cross-border trade of certain products and ‘abused its dominant position’ in the chocolate market.

Consequently, consumers paid more for chocolate, biscuits, and coffee, according to Margrethe Vestager, the EU’s competition commissioner.

A European Commission investigation found that Mondelez reached deals with seven brokers and traders between 2012 and 2019, limiting the customers and countries to which they could resell Mondelēz products.

One of these agreements contained a provision requiring a wholesale customer to impose higher prices on exports than domestic sales.

Another ten exclusive distributors were banned from responding to sale requests from customers in other EU countries without Mondelez’s authorisation.

Regulators additionally said Mondelez curbed parallel trade – the importing of goods from one country and exporting them to a higher-priced country.

The Belvita biscuits and Oreo cookies maker refused to supply a German broker with chocolate tablet products so they would not be resold in Austria, Belgium, Bulgaria, and Romania.

In tandem, it banned the same products in the Netherlands in order to prevent their export into Belgium.

The EU said curbing parallel trade could reduce product diversity and hurt shoppers because suppliers and manufacturers could charge higher prices.

‘Therefore, restrictions to parallel trade amount to non-regulatory barriers to a better functioning of the Single Market and are among the most serious restrictions of competition,’ it added.

The European Single Market is designed to facilitate the freedom of goods, services, capital and movement between EU member states, as well as European Free Trade Association members Norway, Switzerland, Liechtenstein, and Iceland.

Vestager said the trade bloc is designed to keep prices low, enhance competition, and bolster consumer choice.

‘We are determined to uphold the fundamental freedoms in the EU and to ensure that EU citizens have access to the biggest variety at the lowest prices that the market can offer,’ she remarked.

The EU’s fine against Mondelez comes amid a widespread cost-of-living crisis and criticism that food companies are making bumper profits from price hikes.

A Mondelez spokesman said the fine related to ‘isolated incidents, most of which ceased or were remedied well in advance of the commission’s investigation.’

They added: ‘This historical matter is not representative of who we are and the strong culture of compliance for which we strive.

‘At Mondelez International, we place the strongest emphasis on integrity and respect for the laws of the countries in which we operate.’