June 21. 2024. 5:22

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EU Commission fines US confectionary giant Mondelez €337.5 million

The European Commission fined US confectionery giant Mondelez €337.5 million for engaging in anti-competitive behaviour that artificially inflated food prices and exacerbated the cost-of-living crisis across the EU, the EU executive said on Thursday (23 May).

EU competition chief Margrethe Vestager said that the food giant, which owns multiple household brands including Cadbury, Oreo, and Cote d’Or, illegally restricted cross-border trade and abused its dominant position in the chocolate market from 2006 to 2020.

Based on the Commission’s investigation which began in 2019, “[Mondelez has] been restricting the cross-border trade of chocolate, biscuits, and coffee products within the European Union,” said Vestager.

“[It] illegally restricted retailers from sourcing these products from member states where prices are lower, and this allowed Mondelēz to maintain higher prices. This harmed consumers who ended up paying more for chocolates, biscuits and coffee.”

Vestager added that Mondelez’s attempts to restrict so-called ‘parallel’ trade – whereby traders buy products in low-price regions to re-sell them in places where prices are higher – violated the EU’s “fundamental freedom” of barrier-free cross-border trade.

The EU executive’s vice president and competition Commissioner said Mondelez’s anti-competitive practices compounded EU citizens’ financial anxiety at a time when many are still affected by the impact of high inflation and a widespread cost-of-living crisis.

The European Trade Union Confederation (ETUC) estimated earlier this year that real wages – which account for the negative effect of inflation on salaries – fell by 0.7% across the EU in 2023, after plunging by 4.3% in 2022.

“In households, we see how they are haunted by the cost of living crisis. So this is also part of a broader effort to enforce competition rules in the food retail industry. This is a sector in which we have several ongoing investigations, such as the one in food delivery services and in energy drinks,” she said.

Citizens’ cost of living crisis comes amid bumper profits in many major corporate sectors, with Mondelez itself having reported a gross profit of $13.8 billion in 2023.

In a statement, Mondelez said that the Commission’s decision “relates to historical, isolated incidents, most of which ceased or were remedied well in advance of the Commission’s investigation”.

“This historical matter is not representative of who we are and the strong culture of compliance for which we strive,” it added.

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