Manufacturers such as Mondelez, which have operations in Switzerland, have reported gains as part of the Swissco organisation
A long-running investigation into Mondelēz International has seen the business fined €337.5 million for what the EU Commission has described as ‘hindering the cross-border trade of chocolate and biscuits’ between Member States, breaching the bloc’s competition rules, writes Neill Barston.
The verdict on the manufacturer of major global brands including Toblerone, Oreo and Côte d’Or, Milka and Ritz, explored its business practices across Europe, and it was found to have made 22 trading infringements across the continent.
In this instance, the infringements essentially meant member states were blocked from buying supplies of the firm’s products from another state, which could have been as much as up to 40% cheaper in another country. The verdict against the company is reported within the top 10 highest ever anti-trust fines within the trading bloc.
According to the Commission, its investigation, spanning operations covering a seven-year period from 2012 into suspected anticompetitive practices covering the EU, began back in November 2019, and involved inspecting premises of Mondelēz in Austria, Belgium and Germany. Its formal proceedings in January 2021.
Notably, the European authority asserted that it remained committed to ensuring that the Single Market continued to operate smoothly, and that it would move against anti-competitive commercial measures regarding territorial supply constraints which the case against Mondelez has centred upon.
In a statement responding to the ruling, the global snacking group stated that the case concerned historical and isolated incidents, ‘most of which were remedied well in advance of the Commission’s investigation’.
Investigation’s findings
However, the European body found that Mondelēz breached EU competition rules through engaging in anticompetitive agreements or concerted practices aimed at restricting cross-border trade of various chocolate, biscuit, as well as coffee products; and also ‘by abusing its dominant position in certain national markets for the sale of chocolate tablets.’
Revealing specific incidents, the Commission said that the company had limited territories or customers to which seven wholesale customers (brokers) could resell Mondelēz’ products. One agreement also included a provision ordering Mondelēz’ customer to apply higher prices for exports compared to domestic sales. These agreements and concerted practices took place between 2012 and 2019 and covered all EU markets.
Other actions noted in the infringements included preventing ten exclusive distributors active inMember States from replying to sale requests from customers located in other Member States without prior permission from Mondelēz. These agreements and practices took place between 2006 and 2020 and covered all the EU markets.
The Commission also found that the company had refused to supply a broker in Germany to prevent the resale of chocolate tablet products in the territories of Austria, Belgium, Bulgaria and Romania, where prices were higher.
It is also alleged to have ceased the supply of chocolate to the Netherlands to prevent it from being sold in Belgium, where it was being marketed at a higher rate.
As the Commission concluded that “Mondelēz’s practices prevented retailers from being able to freely source products in Member States with lower prices” and artificially partitioned the internal market.
