Info Flash 01/2021 – European Commission opens antitrust investigation on possible territorial supply constraints by Mondelēz
On 28 January 2021, the European Commission opened a formal antitrust investigation to assess whether Mondelēz has restricted competition in various national markets for chocolate, biscuits and coffee by hindering the cross-border trade and supply of these products between EU Member States.
Territorial supply constraints (TSCs) at the core of the EU investigation
The Commission is concerned that Mondelēz may have restricted ‘parallel trade’ of its chocolates, biscuits and coffee between EU Member States through various agreements and unilateral practices aimed at preventing retailers from being supplied from the most price-competitive national markets.
The Commission will investigate the following practices:
- possible limitations of the sales territories within the EU through agreements that determine in which Member State a trader can or cannot sell the products, or that restrict passive sales;
- possible curtailing of parallel trade through agreements that raise prices or limit volumes specifically for customers that trade the products across Member States;
- possible agreements with customers not to engage in parallel trade or not to procure products from parallel trade, inter alia, in exchange for payments or other forms of compensation;
- possible restrictions on the languages used on packaging either unilaterally or through agreements with traders, thereby creating friction on sales to certain other EU Member States;
- possibly refusing to supply certain traders with a view to restricting imports into certain markets.
If proven, the agreements and practices under investigation may breach Article 101 and/or Article 102 of the Treaty on the Functioning of the European Union (TFEU). The Commission will now carry out its in-depth investigation as a matter of priority.
The investigation follows a renewed interest from the European Commission in territorial supply constraints and their elimination, with a recent study and a workshop to which Independent Retail Europe presented its views. It is a sign that DG Competition takes the issue of TSCs very seriously and is ready to take action when presented with possible evidence of such practices.
We will keep members informed of any further development on this case, as well as on EU activities on TSCs.