Advisories May 24, 2024

Antitrust / Food & Beverage Advisory: European Commission Fines Global Foods Supplier €337.5 Million for Blocking Cross-Border Sales

Executive Summary
Minute Read

Our Antitrust and Food & Beverage teams examine how the European Commission’s hefty fine is a warning against anticompetitive behavior for companies operating in the EU.

  • The EC found anticompetitive agreements that limited distribution among EU Member States
  • The fine is being used as an example of how competition law can ease the cost-of-living crisis
  • The EC suggests brands should check their contracts or risk fines of their own

The European Commission (EC) fined Mondelēz International Inc. €337.5 million after concluding that the company had infringed EU competition rules by restricting the cross-border sales of certain products between EU Member States. According to the EC, this resulted in higher prices for consumers. Formal proceedings were launched in January 2021 following inspections of the company’s premises in Austria, Belgium, and Germany in November 2019.

The EC found that Mondelēz entered into several anticompetitive agreements or concerted practices with the following effects:

  • Limiting the territories to which some wholesale customers could resell products within the EU.
  • Preventing exclusive distributors from responding without Mondelēz’s consent to customers’ sales requests from other Member States.

In addition, the EC found that Mondelēz abused its dominant position by:

  • Refusing to supply a broker in Germany to avoid the resale of chocolate tablet products in the more expensive territories of Austria, Belgium, Bulgaria, and Romania.
  • Terminating the supply of chocolate tablet products in the Netherlands to halt the import of these products in Belgium, where Mondelēz was charging higher prices.

Background of EU Competition Rules

EU competition rules serve to protect the EU’s single market by allowing free cross-border trade of goods and services between Member States. Amongst others, the rules prohibit practices such as artificially partitioning the internal market and restricting cross-border trade. In addition, engaging in fixed or minimum resale practice maintenance constitutes a per se illegal practice under EU rules.

Warning to Other Branded Foods Producers

Some politicians had called for national and EU action, including on concerns that international must-have brands are exploiting strong market positions to extract profits from Europe. 
The EC’s executive vice president and commissioner for competition, Margrethe Vestager, stated she hoped this case and the sizeable fine of almost €340 million send a very clear signal to the retail sector that the EC won’t accept anticompetitive behaviour.

She said the case should serve as a warning to other brands – dominant or not – that supply-refusals and anticompetitive agreements would attract hefty sanctions. The inquiry was an example of how competition law could help ease the cost-of-living crisis that has seen retail prices soar in recent years. Vestager invited brands to check their contracts or risk hefty sanctions, and she announced more cases were to come.

In 2020, the EC fined Anheuser-Busch InBev €200 million for illegally restricting cheaper imports to Belgium.

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Media Contact
Alex Wolfe
Communications Director

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