Competition Bureau investigation leads to over $4-million in fines for international bulk vitamin conspiracies

OTTAWA, October 16, 2002 — The Competition Bureau announced today that the Federal Court of Canada imposed fines totalling $3.875-million for a conspiracy to fix prices and allocate market shares for the vitamin B3 sold in bulk in Canada. In addition, it imposed a fine of $150,000 on a senior executive for his role in multiple conspiracies to fix prices and allocate market shares for 10 bulk vitamins and food additive products sold in Canada with regard to which eight firms and two individuals were convicted and fined in 1998 and 2000.

Degussa AG of Germany, Lonza AG of Switzerland, Nepera Inc. and Reilly Industries Inc. of the United States pleaded guilty to participating in the international conspiracy, which was initiated in January 1992 and continued until March 1998 in breach of Canada's Competition Act. Also, Dr. Kuno Sommer, a Swiss National and former senior executive at Hoffmann-La Roche Ltd, a Swiss corporation, pleaded guilty for his participation in a series of conspiracies in bulk vitamins throughout the period between January 1991 and December 1997.

"These criminal cartels have forced Canadian consumers to pay higher prices for their everyday staples," said Raymond Pierce, Deputy Commissioner of Competition. "Aggressive action to stop international cartels that target Canadian consumers, and holding those accountable through stringent penalties, is a priority for the Competition Bureau. We will continue to pursue such behaviour by any corporation, domestic or foreign."

Degussa AG was sentenced to pay a total fine of $2.5-million, while Lonza AG was fined a total of $1.1-million. Nepera Inc. and Reilly Industries, Inc. were fined $240,000 and $35,000 respectively for offences relating to vitamin B3. Dr. Sommer was fined a total of $150,000 for his role in the bulk vitamins case.

The total amount for fines imposed by Canadian Courts since September 1999 against the bulk vitamins conspiracies is approximately $95.5-million. During this same period, sales in Canada of the bulk vitamins by the producers convicted to date were between $705- and $750-million.

Copies of the documents have been filed before the Federal Court of Canada, Trial Division, in Toronto. Certified copies of the filed documents may be obtained from the Federal Court Registry - (Court File numbers T-1581, 1582, 1583, 1584-02).

The Competition Bureau is an independent law enforcement agency that promotes and maintains fair competition so that all Canadians can benefit from competitive prices, product choice and quality service. It oversees the application of the Competition Act, the Consumer Packaging and Labelling Act, the Textile Labelling Act and the Precious Metals Marking Act.

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