EU Antitrust investigates on Mondelēz
Possible practices of restricting competition on European national markets
The European Commission has opened an antitrust investigation into Mondelēz, the food giant among the largest producers of chocolate, biscuits and coffee in Europe. The American multinational has come under the spotlight for possible practices of limiting competition on European national markets. The Group owns Saiwa, Toblerone, Hug, Splendid, Oreo and Milka brands, among others.
The European Commission has launched a formal antitrust investigation to assess whether Mondelēz has limited competition in the national markets for chocolate, biscuits and coffee, thereby hindering the cross-border trade of these products between EU member states. This would represent a violation of European antitrust rules. "Chocolates, cookies and coffee are products consumed daily by European citizens", said Executive Vice President Margrethe Vestager, responsible for European competition. "We are opening a formal investigation to see if Mondelēz, a key manufacturer of these products, may have limited free competition in the affected markets by implementing various practices that hinder trade flows, and ultimately leading to higher prices for consumers. Trade in the internal market can lower prices and increase the variety of products offered in member states".
In detail, the commission fears that Mondelēz may have limited the so-called “parallel trade” of chocolates, biscuits and coffee between EU member states through unilateral agreements and practices. In summary, traders and retailers try to buy products on markets where they have lower prices and then resell them on markets with higher prices. This practice generally leads to lower prices in markets where they are higher. The restrictions on parallel trade, the commission explains, can lead to the isolation of a market in which producers or suppliers can charge "higher prices to the detriment of consumers". And it can lead to "less product diversification".
Among the potentially competitive practices that will be examined by the European Commission there are: possible limitations on sales territories, with agreements that determine in which member state a trader can or cannot sell products, and possible restrictions on the languages used on packaging.
EFA News - European Food Agency