The European Commission is set to impose a hefty fineworth millions of euros on Oreo maker Mondelez International [MDLZ:US] for blocking cross-border sales, as reported by Reuters on April 16. The fine stemsfrom an EU antitrust investigation in 2021, targeting Mondelez’s alleged obstruction of “parallel” trade among EU countries. Specifically, the company allegedlyrestricted retailers from procuring products outside their own markets, such as those with lower manufacturing costs, by restricting languages used on packaging or limiting available volumes. Such practices may push up prices and limit choices for customers in Europe.According to people familiar with the matter, the Commission will order the company to end anti-competitive practices, as they may harm consumers,especially at a time of high inflation.

As the investigation coming to an end, Mondelez is in talks with the Commission to resolve the antitrust case. The snack maker has set aside EUR340m to settle the investigation while acknowledging that the final penalty could surpass this amount significantly. If found breaching the EU competition law, the firm could facefines of up to 10% of its global turnover. Mondelez’s case is similar to another anti-competition lawsuit in 2019 when multinational beverage and brewing companyAB InBev [ABI:BB] was fined EUR200m for preventing Belgian retailers from importing cheaper Jupiler and Leffe beer from the Netherlands and France. At the time, the Commission asserted distortion of competition and abuse of market dominance by the company.

Sources:

https://www.reuters.com/business/retail-consumer/eu-fine-mondelez-blocking-cross-border-sales-ft-reports-2024-04-16/

https://www.ft.com/content/d2abf5ca-4e54-4450-b8ed-1d9e239289f8

https://www.reuters.com/markets/europe/mondelez-sets-aside-300-mln-euro-resolve-eu-antitrust-probe-2023-02-03/

https://www.retaildetail.eu/news/food/mondelez-braces-itself-for-heavy-fine/