THE owner of chocolate brand Cadbury's, which has a major factory in Chirk, is facing a formal investigation by the European Commission.

The commission opened the formal antitrust investigation to assess whether Mondelēz has restricted competition in a range of national markets for chocolate, biscuits and coffee by hindering the cross-border trade of these products between European Union Member States.

This would be in breach of EU antitrust rules.

European Commission 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 Mondelēz, 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.

“Trade in the internal market can lower prices and increase the variety of products offered across member states.”

Mondelēz is one of the largest producers of chocolate, biscuits and coffee in the EU, and has sites in both Chirk and Leominster.

The Commission is concerned that the company may have restricted the so-called ‘parallel trade' of its chocolates, biscuits and coffee between EU Member States through agreements and unilateral practices.

Traders and retailers try to procure products in the internal market where the prices are lower and trade them to markets where prices are higher.

This generally leads to price decreases in countries where prices are higher. Restrictions to such parallel trade can lead to the isolation of a national market whereby the manufacturer or supplier can charge higher prices to the detriment of consumers.

Restrictions to parallel trade can also lead to less product diversity.

A Mondelēz spokesman confirmed the firm will work alongside the commission as the review is carried out.

They said: “We learnt about the European Commission's announcement that it has opened a formal investigation into Mondelez International's practices related to the cross-border supply of products within the European Economic Area.

“We will work constructively with the European Commission as it conducts its review.”

The commission will investigate certain potentially anti-competitive practices by Mondelēz.

It will now carry out its in-depth investigation as a matter of priority. The opening of a formal investigation does not prejudge its outcome.