The European Commission imposed a fine of 337.5 million euros at Mondelēz International, Inc. (Mondelēz) for preventing cross-border trade in chocolate, biscuits and coffee products between Member States, in breach of EU competition rules, a statement from Commission.

The Commission underlines that it remains committed to removing unjustified barriers to ensure the best functioning of the single market.

Territorial supply restrictions by suppliers are a type of non-regulatory barrier to the smooth functioning of the single market.

The transgression

Mondelēz, based in the US, is one of the largest producers of chocolate and biscuit products in the world. Its portfolio includes well-known chocolate and biscuit brands such as Côte d’Or, Milka, Oreo, Ritz, Toblerone and TUC and until 2015 coffee brands such as HAG, Jacobs and Velours Noir.

The Commission’s investigation found that Mondelēz breached EU competition rules: (i) by entering into anti-competitive agreements or concerted practices aimed at restricting cross-border trade in various chocolate, biscuit and coffee products; and (ii) by abusing its dominant position in certain national markets for the sale of chocolate bars.

In particular, the Commission found that Mondelēz participated in twenty-two anti-competitive agreements or concerted practices, in breach of Article 101 of the Treaty on the Functioning of the European Union (“TFEU”), with:

– Limitation of areas or customers in which seven Wholesale customers (merchants/”brokers”) could resell Mondelēz products. An agreement also included a provision mandating Mondelēz’s client to charge higher prices for exports compared to domestic sales. These agreements and concerted practices took place between 2012 and 2019 and covered all EU markets.

– Prevent ten exclusive distributors operating in certain Member States from responding to sales requests from customers located in other Member States without prior authorization from Mondelēz. These agreements and practices took place between 2006 and 2020 and covered all EU markets.

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

– ‘Refusal to provide mediationor Germany to prevent the resale of chocolate bar products in Austria, Belgium, Bulgaria and Romania where prices were higher.

– Vacation her supply chocolate bar products in the Netherlands to prevent their importation into Belgium, where Mondelēz was selling these products at higher prices.

The European Commission concluded that Mondelēz’s illegal practices prevented retailers from being able to freely source products in Member States with lower prices and artificially ‘fragmented’ the internal market.

Mondelēz’s aim, as the Commission notes, was to avoid that cross-border trade would lead to price reductions in countries with higher prices. Such illegal practices have allowed Mondelēz to continue charging more for its own products, to the detriment of EU consumers.