BITTER PILL FOR EUROPEAN FIRMS; VITAMIN MAKERS TAKE FINES TO SETTLE PRICE-FIXING CHARGES.Byline: Ben Sullivan Daily News Staff Writer Local vitamin makers cheered a $725 million settlement Thursday in a foiled case of price fixing price fixing n. a criminal violation of federal anti-trust statutes, in which several competing businesses reach a secret agreement (conspiracy) to set prices for their products to prevent real competition and keep the public from benefiting from price competition. by two European chemical firms. ``I don't see a downside to this,'' said Paul Bolar, head of regulatory and legal affairs for San Fernando-based Pharmavite, which markets the NatureMade line of supplements. ``If it helps lower prices, everybody benefits.'' The case involved two of Europe's biggest chemical firms - the Swiss pharmaceutical giant F. Hoffman-LaRoche Ltd. and Germany's BASF AG BASF AG German chemical and plastics manufacturing company. Founded in 1865, BASF (the full German name means “Baden Aniline and Soda Factory”) was part of the chemical cartel IG Farben from 1925 until 1945, when the latter was dissolved by the Allies. - which admitted to engaging in a worldwide conspiracy to raise and fix the prices of certain vitamins. As part of the settlement of criminal charges brought against the companies by the U.S. Department of Justice, the firms agreed to pay fines of $500 million and $225 million, respectively. A third company, France's Rhone-Poulenc SA, must reimburse customers for helping inflate prices, though it will escape prosecution. ``The vitamin cartel is the most pervasive and harmful criminal antitrust conspiracy ever uncovered,'' Assistant Attorney General Joel I. Klein, head of Justice's antitrust division, told a news conference. ``The criminal conduct of these companies hurt the pocketbook of virtually every American consumer - anyone who took a vitamin, drank a glass of milk or had a bowl of cereal.'' Hoffman-LaRoche and BASF BASF Bar Association of San Francisco (since 1872; San Francisco, California) BASF Badische Anilin und Soda Fabrik (German chemical products company) BASF Builders Association of South Florida acknowledged that for almost a decade they ran a sophisticated operation that controlled nearly every aspect of the sale of certain vitamin products, including fixing the price, allocating sales volume and customers, and rigging bids in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . Yearly meetings were even held between the firms to divide the market, Klein said. The conspiracy lasted from January 1990 to February 1999 and affected the vitamins most commonly used as nutritional supplements Nutritional Supplements Definition Nutritional supplements include vitamins, minerals, herbs, meal supplements, sports nutrition products, natural food supplements, and other related products used to boost the nutritional content of the diet. or to enrich human food and animal feeds - vitamins A, B2, B5, C, E and beta carotene be·ta car·o·tene also be·ta-car·o·tene n. The isomeric form of carotene that is widely distributed in nature and most efficiently converted to vitamin A by the body. , the government said. Hoffman-LaRoche sold $3.3 billion worth of vitamins during the conspiracy, while BASF sold $1.6 billion worth of vitamins covered by the price-fixing agreement and Rhone-Poulenc's sales totaled between $500 million and $600 million, the Justice Department said. Vitamin wholesalers like Pharmavite and Chatsworth-based Natrol Inc. depend on suppliers such as Hoffman-LaRoche and BASF for the raw materials that go into their pills and capsules. Even in cases without collusion, when supply of certain products is limited by one or two players, prices are inevitably affected, local officials said. ``As everybody in the industry, we've been affected,'' said Dennis Jolicoeur, chief financial officer at Natrol. When ``a handful or less'' of suppliers exist ``there's certainly been a sense that there hasn't been much flexibility or difference in their prices.'' As part of its case, the government also charged Kuno Sommer Sommer is a surname, from the German and Danish word for the season "summer". It may refer to:
The Associated Press contributed to this article. PUNISHING PRICE FIXERS Two European companies agreed Thursday to pay $725 million in fines for vitamin price-fixing, according to the U.S. Justice Department Largest price fixing fines F. Hoffman-LaRouche, Switzerland, vitamins, 1999 -- $500 million BASF, Germany, vitamins, 1999 -- $225 million SGL Carbon, Germany, graphite electrodes for steelmaking, 1999 -- $135 million UCAR UCAR University Corporation for Atmospheric Research UCAR Unmanned Combat Armed Rotorcraft UCAR Utility Cost Analysis Report International, U.S. graphite electrodes, 1998 -- $110 million Archer Daniels Midland The Archer Daniels Midland Company (NYSE: ADM), is a conglomeration based in Decatur, Illinois. ADMoperates more than 270 plants worldwide, where cereal grains and oilseeds are processed into numerous products used in food, beverage, nutraceutical, industrial and animal feed , U.S., citric acid citric acid or 2-hydroxy-1,2,3-propanetricarboxylic acid, HO2CCH2C(OH)(CO2H)CH2CO2 and lysine lysine (lī`sēn), organic compound, one of the 20 amino acids commonly found in animal proteins. Only the l-stereoisomer appears in mammalian protein. (feed additive:. -- $100 million SOURCE: Department of Justice Research/Pat Carr; Graphic/Lee Hulteng/Knight Ridder Tribune CAPTION(S): Photo, Chart PHOTO (Color) Deputy Attorney General Gary Spratling, right, and Attorney General Janet Reno announce fines against two European vitamin makers. Ron Edmonds/Associated Press CHART: PUNISHING PRICE FIXERS Research/Pat Carr; Graphic/Lee Hulteng/Knight Ridder Tribune |
|
||||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion