EU launches price-fixing probe against Mondelez

EU launches price-fixing probe against sweets giant Mondelez

Mondelez is one of the largest producers of chocolate, biscuits and coffee in the world

Representative image. Credit: iStockPhoto

The EU's powerful antitrust authorities opened an in-depth probe on Thursday into allegations of price-fixing by Mondelez, the global confectioner of major snack brands, including Toblerone, Oreo and Cadbury.

"We are opening a formal investigation to see whether Mondelez, a key producer of these products, might have restricted free competition" in Europe, EU competition chief Margrethe Vestager said in a statement.

Mondelez is one of the largest producers of chocolate, biscuits and coffee in the world, with sales in Europe worth tens of billions of euros every year, the European Commission said.

The EU alleges that the global giant has schemed to limit the sales of its iconic products from one European country to the other in an infringement of the bloc's single market rules.

The EU executive said it suspected Mondelez had used contracts to ban traders from making these products available to other countries at potentially cheaper prices.

This would have allowed the company to charge higher prices, but also limit the availability of the products on offer elsewhere.

The suspicions led EU investigators to carry out a series of raids in Mondelez offices across Europe in November 2019.

Beer giant Anheuser-Busch InBev was recently convicted of using similar methods by ensuring that cheaper beer from the Netherlands and France could not be sold in Belgium.

The world's biggest brewery group was fined 200 million euros for the practices, which included changing the design and size of beer cans to make them unavailable for cross-border sales.

In 2019, Mondelez sales reached $25.9 billion worldwide and the company is due to unveil its financial results for 2020 later on Thursday.

Mondelez also owns Philadelphia cream cheese, Tang drink, and Tuc salty biscuits.