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- European Union regulators are set to fine Mondelez (NASDAQ:MDLZ) millions of euros for its practice of blocking “parallel” trade between EU countries, a practice that could result in higher prices for European consumers, according to the Financial Times.
- Parallel trade is when a product is sold for a lower price after being brought in from a country where they cost less. By blocking cross-border trade, Mondelez (MDLZ) violated EU law which stipulates that all foodstuffs which are legally on the market in a member state of the EU may be imported into and marketed in other member states even if they do not comply with the national rules in force there.
- The investigation examined restrictions on languages used on packaging that would limit the number of countries where a trader can sell the merchandise, the Financial Times reported.
- If a company is found to have violated the law, regulators can impose a fine of up to 10% of that company’s global turnover. In recognition of the potential for a steep fine, Mondelez (MDLZ) set aside €340M, acknowledging that the actual fine could be higher.
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