Oreo, Tuc and Toblerone at inflated prices put Mondelez in trouble. The former American giant Kraft, owner of large brands of packaged sweets, will have to pay a fine of 337.5 million for violating competition. But is the fine really that steep? Mondelez International ended 2023 with net revenues up 14.4% to more than $36 billion. Given that for the fourth quarter of 2023 it stood at 9.3 billion (+7%).
Numbers that make the intervention of the EU Commission much “softer”, which, among other things, had already reduced the fine by 15 percent “through collaboration”.
According to the Commission’s investigations, the company would have hindered the trade and sale of its products between some Member States of the European Union, in violation of the competition regulations in force. In various periods between 2006 and 2020 Mondelez had entered into “anti-competitive agreements or coordinated practices” which, according to the Commission, were “aimed at limiting transnational trade in various chocolate, biscuit and coffee products”; it had also “abused its dominant position in certain national markets with regard to the sale of chocolate bars”. In particular, the company allegedly refused to supply a distributor in Germany to prevent the sale of chocolate in Austria, Belgium, Bulgaria and Romania, where prices were higher; it would also stop supplying these products to the Netherlands to prevent exports to Belgium, where Mondelez sells its products at higher prices.
An example? «The Belgians – explained the vice president of the European Commission with responsibility for Competition, Margrethe Vestager – are great devourers of Cote d’Or chocolate bars (produced by Mondalez). Therefore, the multinational has blocked supplies to the Netherlands to protect the profitable Belgian market, where citizens go crazy for the chocolate produced by the multinational, despite living in the homeland of chocolatiers. I assure you – added Vestager at the press conference – that prices can be quite different in Europe”, with differences between “10% and 40% and sometimes even greater”, therefore there is great potential to compress them, thanks to parallel trade.
Therefore, generally, within the same market, such as that of the European Union, distributors tend to buy products where prices are lower and then sell them where they are higher, with the result of lowering them there too. According to the Commission, the “illegal practices” adopted by Mondelez would have allowed the company to continue to charge more for its products in certain EU countries, to the detriment of consumers.
