"Anti-competitive" vitamin producer practices subject of Justice Dept. investigation.
This article was originally published in The Tan Sheet
Executive Summary
"ANTI-COMPETITIVE" VITAMIN PRODUCER ACTIVITIES UNDER FEDERAL INVESTIGATION, according to a statement issued by the Justice Department the week of Nov. 17. Justice's Antitrust Division is looking into the possibility of anticompetitive activities by bulk vitamin companies and has convened a grand jury in Dallas to review evidence. The investigation reportedly concerns possible price-fixing and collusion in the wholesale vitamin industry.
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"ANTI-COMPETITIVE" VITAMIN PRODUCER ACTIVITIES UNDER FEDERAL INVESTIGATION, according to a statement issued by the Justice Department the week of Nov. 17. Justice's Antitrust Division is looking into the possibility of anticompetitive activities by bulk vitamin companies and has convened a grand jury in Dallas to review evidence. The investigation reportedly concerns possible price-fixing and collusion in the wholesale vitamin industry. The leading supplier of bulk vitamins worldwide, Hoffmann-La Roche, said it is aware of the investigation but is not aware of being a target and has received no subpoena or request for information regarding its bulk sales practices. The company also said it has a "rigorous" business practice policy in place requiring employee compliance with antitrust laws. With a 40% worldwide share of the bulk vitamins market, Roche supplies products for the vitamins and dietary supplement, food, beverages and cosmetics industries as well as for animal products. BASF Corp., which holds about 20% of the worldwide market, also said it is "aware" Justice had convened a grand jury investigation and that "the general subject matter has to do with allegations of antitrust violations involving the vitamin industry." The company has "not been officially contacted by the Department of Justice and [has] no information about the allegations or the status of the grand jury," BASF added. Both Roche and BASF are based in Europe. While the Justice Department has engaged in no recent probe of the bulk vitamin industry, it has been involved over the past few years in a broad investigation of price-fixing for other ingredients in food and animal feeds. In March, the government announced plea agreements with Roche and another Swiss company, Jungbunzlauer AG, in which the companies admitted participating in an international conspiracy to fix prices and allocate market share for citric acid worldwide. The agreement involved criminal fines totaling $25 mil. U.S.-based Archer Daniels Midland agreed in October 1996 to plead guilty to conspiring to fix prices of citric acid and lysine. ADM also agreed to pay $100 mil. in fines, the largest single criminal antitrust fine. Citric acid is a flavoring and preservative used in foods, beverages, drugs and cosmetics. Lysine is an amino acid used as a feed additive. Haarmann & Reimer, a U.S. subsidiary of Bayer AG, also was involved in the citric acid investigation and fined $50 mil. |