Mondelez 2012 Annual Report Download - page 19

Table of Contents
Item 3. Legal Proceedings.
We routinely are involved in legal proceedings, claims, and governmental inspections or investigations (“Legal Matters”) arising in
the ordinary course of our business.
Competition authorities in certain Member States of the European Union have ongoing investigations into possible anticompetitive
activity in the fast moving consumer goods (“FMCG”)
sector, which includes products such as chocolate and coffee. On January 31,
2012, the German Federal Cartel Office (“FCO”) issued a press release stating that it had discontinued proceedings against our
wholly owned subsidiary, Kraft Foods Deutschland GmbH (
“KFD”), based on a settlement agreed between KFD and the FCO
following the FCO’s finding of an exchange of competitively sensitive information. The FCO also imposed fines against a former
KFD employee, as well as several other producers of confectionery. Due to KFD’s cooperation with the FCO in the matter, the fine
to resolve the matter against KFD was reduced to € 21.7 million.
A compliant and ethical corporate culture, which includes adhering to laws and industry regulations in all jurisdictions in which we
do business, is integral to our success. Accordingly, after we acquired Cadbury in February 2010 we began reviewing and
adjusting, as needed, Cadbury’s operations in light of applicable standards as well as our policies and practices. We initially
focused on such high priority areas as food safety, the Foreign Corrupt Practices Act (“FCPA”) and antitrust. Based upon Cadbury’
s
pre-acquisition policies and compliance programs and our post-acquisition reviews, our preliminary findings indicated that
Cadbury’s overall state of compliance was sound. Nonetheless, through our reviews, we determined that in certain jurisdictions,
including India, there appeared to be facts and circumstances warranting further investigation. We are continuing our investigations
in certain jurisdictions, including in India, and we continue to cooperate with governmental authorities.
As we previously disclosed, on February 1, 2011, we received a subpoena from the SEC in connection with an investigation under
the FCPA, primarily related to a facility in India that we acquired in the Cadbury acquisition. The subpoena primarily requests
information regarding dealings with Indian governmental agencies and officials to obtain approvals related to the operation of that
facility. We are cooperating with the U.S. and Indian governments in their investigations of these matters.
As we previously disclosed, on March 1, 2011, the Starbucks Coffee Company (“Starbucks”) took control of the Starbucks
packaged coffee business (“Starbucks CPG business”) in grocery stores and other channels. Starbucks did so without our
authorization and in what we contend is a violation and breach of our license and supply agreement with Starbucks related to the
Starbucks CPG business. The dispute is in arbitration in Chicago, Illinois. We are seeking appropriate remedies, including payment
of the fair market value of the supply and license agreement, plus the premium this agreement specifies, prejudgment interest
under New York law and attorney’s fees. Starbucks has counterclaimed for damages. Testimony and post-hearing briefing in the
arbitration proceeding are completed. We await the arbitrator’s decision. Kraft Foods Group remains the named party in the
proceeding. Under the Separation and Distribution Agreement between Kraft Foods Group and us, Kraft Foods Group will direct
any recovery awarded in the arbitration proceeding to us. We will reimburse Kraft Foods Group for any costs and expenses it incurs
in connection with the arbitration.
While we cannot predict with certainty the results of these or any other Legal Matters in which we are currently involved, we do not
expect that the ultimate costs to resolve any of these Legal Matters, individually or in the aggregate, will have a material effect on
our financial results.
Item 4. Mine Safety Disclosures
Not applicable.
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