The maker of one of India's most renowned chocolate brands, Cadbury Dairy Milk, is under fire in Europe. Mondelez, the American confectionary multi-national has been handed with a gargantuan fine of USD 366 million or Rs 3,039 crore by the European Union regulator.
Rigging the EU Market
The company, which has a significant base on the continent, particularly in Britain, has been found to be rigging the market of the old continent. The company that also make the popular cream sandwich biscuits, Oreo, has been accused of causing impediments for other players, thereby truncating competition in the market.
EU authority said that the company had artificially and most importantly, illicitly stalled cross-border sale of products to maintain high prices.
This comes at a crucial juncture as dire economic phenomena such as inflation and 'shrinkflation' (wherein the prices remain the same, while the proportion of the goods is decreased) or 'skimpflation' (where the quality of the goods produced, goes for a toss) are being widely practised and therefore observed.
The company has been accused of trying to maintain its dominant position in the market by levergaing and abusing its power. | Image by TK McLean from Pixabay
Tried To Maintain Hegemony
The economic turmoil in Europe is far more acute than its counterparts across the Atlantic.
This development has been in the making for a while, as the EU commission first looked into the matter, before the pandemic in 2019. The company has been accused of trying to maintain its dominant position in the market by levergaing and abusing its power.
According to a statement obtained by CNN, a Mondelz spokesperson said, "The penalty related to isolated incidents, most of which ceased or were remedied well in advance of the commission’s investigation.” | File Image
According to a recent report, the European chocolate market which is worth USD 47.28 billion is occupied by Nestle, Ferroro, Mars and Mondelez. Here, Mondelez controls 19.74 per cent of the market.
According to a statement obtained by CNN, a Mondelz spokesperson said, "The penalty related to isolated incidents, most of which ceased or were remedied well in advance of the commission’s investigation.”
The company shares also appear to have suffered as a result of this development. MONDELEZ INTERNATIONAL, which is listed on Nasdaq, ended the day's trade on Friday, May 24 with a 0.80 decline. In fact, the company shares have slumped 4.22 per cent in the past five days, taking the value of shares to USD 68.30.
