EU investigates Mondelez over pricing and trade practices

Photo: EPA Margrethe Vestager

EU has launched an investigation of trade practices of the food giant Mondelez due to concerns linked to trade and pricing practices, BBC reported.  The European Commission has said that Mondelez restricted trade across borders between EU countries which resulted in higher prices for some products. Mondelez confirmed the on-going investigation and said it would "work constructively" with the Commission.

In the EU single market, retailers and traders try to buy products where they are cheaper and trade them in countries where the prices are higher. This tends to push the prices down in the more expensive countries. However, the formal investigation will look at whether the US snack giant limited where traders could buy and sell products to particular sales territories.

The Commission will also look into whether Mondelez raised prices or limited volumes for firms that traded across the EU. It will probe whether Mondelez paid or compensated firms so they wouldn't make that kind of cross-border trade, and whether it refused to supply certain traders to restrict imports.

EC Executive Vice-President Margrethe Vestager, in charge of competition policy, said: "Chocolates, biscuits and coffee are products consumed by European citizens daily. We are opening a formal investigation to see whether Mondelez, a key producer of these products, might have restricted free competition in the markets concerned by implementing various practices hindering trade flows, ultimately leading to higher prices for consumers."

"We will work constructively with the European Commission as it conducts its review." Commission investigators made a series of raids on Mondelez premises in November 2019 after concerns were raised that prices for food and drinks products significantly varied across EU member states”, Mondelez said.

In May 2019 the Commission fined beer giant Anheuser-Busch InBev €200m (£176m) for using similar methods to ensure that cheaper beer from the Netherlands and France could not be sold in Belgium. In 2019, Mondelez sales reached $25.9bn, data about 2020 is still to be reported.

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