The EU hits Oreo manufacturer Mondelez with an antitrust fine of EUR 337.5 million

The EU on Thursday imposed a 337.5 million euro ($366 million) fine on Mondelez, the U.S. confectioner behind major brands including Toblerone and Oreo, for forcing consumers to pay higher fees by restricting cross-border sales.

Mondelez, formerly Kraft, is one of the world’s largest producers of chocolate, cookies and coffee, with revenues of $36 billion last year.

The EU fined Mondelez “because it restricts cross-border trade in chocolate, biscuits and coffee products within the European Union,” said EU Competition Commissioner Margrethe Vestager.

“This harmed consumers who ended up paying more for chocolate, biscuits and coffee,” she told reporters in Brussels.

“This case concerns food prices. This is a key issue for European citizens, and even more obvious in times of very high inflation, when many of them are facing a cost of living crisis,” she added.

The fine is the ninth largest antitrust fine in the EU and was imposed at a time when food costs are a major concern for European households.

Companies came under the microscope for reporting higher profits despite soaring inflation after Russia invaded Ukraine in 2022, but the trend has since slowed.

The free movement of goods is one of the key pillars of the EU single market.

Mondelez’s brands also include Philadelphia cream cheese, Ritz crackers and Tuc salty cookies, as well as Cadbury, Cote d’Or and Milka chocolate brands.

The EU investigation dates back to January 2021, but suspicions led the bloc’s investigators to raid Mondelez offices across Europe in November 2019.

The European Commission, the EU’s powerful antitrust regulator, said Mondelez “abused its dominant position” by violating EU rules by restricting sales to other EU countries at lower prices.

For example, the Commission accused Mondelez of withdrawing chocolate bars from the Netherlands to prevent them from being resold in Belgium, where they were sold at higher prices.

– “Individual cases” –

The EU said Mondelez restricted traders’ ability to resell products and ordered them to charge higher export prices compared to domestic sales between 2012 and 2019.

According to the commission, between 2015 and 2019, Mondelez also refused to deliver to a trader in Germany to avoid reselling the chocolate in Austria, Belgium, Bulgaria and Romania, “where prices were higher.”

Vestager said that in the EU, prices for the same product can vary significantly – depending on the country – by 10 to 40 percent.

This issue is of great concern to EU leaders.

Greek Prime Minister Kyriakos Mitsotakis, in a weekend letter to European Commission chief Ursula von der Leyen, urged the EU to deal with multinationals and criticized the varying costs of branded basic consumer goods across member states.

Vestager stressed the importance of traders being able to buy goods in other countries where they are cheaper.

“It increases competition, lowers prices and increases choice for consumers,” she added.

Mondelez responded that the fine was related to “historical, isolated incidents, most of which had stopped or been remedied long before the commission’s investigation.”

“Many of these incidents were related to business transactions with brokers, which are typically conducted through sporadic and often one-off sales and a limited number of small distributors developing new business in EU markets where Mondelez has no presence or no relevant product launch.” – he added in a statement.

Last year, the giant put aside EUR 300 million while waiting for a penalty.

“No further measures to finance the fine will be necessary,” he said.

once/rmb/rl