Oreos Costing You More Now? It's Not Just Inflation

You're not alone if you've been spending more on Oreos lately. Mondelez International MDLZ, the company behind Oreo and other beloved snacks such as Sour Patch Kids, Ritz Crackers, Milka, and Toblerone, has attributed its price hikes to inflation, higher commodity prices and transportation shortages. However, a closer look at their financials reveals another side of the story.

According to the company report, Mondelez's profit nearly doubled in 2023 compared to 2022, with figures at $4.9 billion versus $2.7 billion. This significant increase in profit, which coincided with the period of price hikes, raises questions about the actual reasons behind the price increases and whether they are solely due to inflation and other external factors.

Adding to the complexity, Mondelez was fined €337.5 million ($365.7 million) by EU antitrust regulators for obstructing cross-border trade of chocolate, biscuits, and coffee products within the EU. This sanction is part of the European Commission's broader efforts to crack down on companies that impose territorial supply constraints on distributors and retailers. This practice limits competition and can lead to higher consumer prices.

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The Commission found that Mondelez engaged in anti-competitive practices and abused its dominant market position, violating EU antitrust laws. Interestingly, Mondelez's fine was reduced by 15% after the company acknowledged its wrongdoing.

"We are determined to uphold fundamental freedoms in the European Union and to ensure that European citizens have access to the biggest variety at the lowest prices that the market can offer," stated EU antitrust chief Margrethe Vestager during a press conference.

These developments paint a more intricate picture of the factors influencing Oreo's pricing. While Mondelez cites external economic pressures, their financial gains and legal challenges suggest additional underlying reasons for the increased costs passed on to consumers. This is crucial information for all consumers, as it helps with understanding the dynamics of the market and the factors affecting the prices of popular snacks and other consumer products.

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Corporate Price Gauging: The Hidden Driver Behind Rising Grocery Bills

Corporate price gouging has become a pressing issue. Major grocery chains and major corporations use inflation as a cover to increase consumer prices and boost their profits. This practice impacts the wallets of everyday Americans and contributes to the nation's soaring inflation. This directly affects people's purchasing power and the country’s overall economic stability. 

Sen. Elizabeth Warren, a prominent advocate for consumer rights, has accused Kroger, P&G, and Tyson Foods of leveraging inflation as an excuse to raise prices on essential goods, thereby fattening their profit margins. Her efforts to expose and combat this practice emphasize the seriousness of the issue and the need for regulatory intervention.

"The nation is dealing with inflation at its highest level in decades, much of it driven by corporate greed and anticompetitive behavior, and the federal government must use every tool available to prevent price gouging and reduce prices for Americans," the senator wrote to the Department of Justice, urging them to take action against corporations hiking consumer prices. 

The actions of these corporations highlight a disturbing trend in which the guise of inflation is used to mask opportunistic price hikes. This has led many people to change their consumer practices. For example, up to 73% of Gen Zers have adjusted their spending habits in response to rising prices, with no end in sight.

This behavior undermines consumer trust and contributes to the broader issue of economic inequality as these companies report soaring profits, the average American faces escalating costs for everyday necessities.

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