Federal Court Imposes Fines Totalling $88.4 Million For International Vitamin Conspiracies

OTTAWA, September 22, 1999 — The Competition Bureau announced today that the Federal Court of Canada imposed fines totalling $88.4 million for multiple conspiracies to fix prices and allocate market shares for ten vitamin and food additive products sold in Canada.

These are the largest fines ever imposed under the Competition Act and the largest criminal fines in Canadian legal history.

F. Hoffmann-La Roche Ltd of Switzerland, BASF AG of Germany, Rhône-Poulenc S.A., of France and two Japanese corporations, Eisai Co. Ltd. and Daiichi Pharmaceutical Co., Ltd., pleaded guilty and were each convicted for having participated in international conspiracies from January 1990 to February 1999 in breach of Canada's Competition Act.

In addition to these fines, the court imposed a Prohibition Order on each firm prohibiting the commission or repetition of these competition offences for a period of ten years in Canada.

"Every Canadian was affected by the international conspiracies in bulk vitamins," said Konrad von Finckenstein, Commissioner of Competition. "Today's convictions send an important message to business that the Bureau will aggressively pursue the parties involved in international cartels that target Canadian consumers from outside the country. This type of criminal behaviour will not be tolerated."

F. Hoffmann-La Roche Ltd was sentenced to pay a total fine of $50.9 million, of which $48 million was for offences relating to bulk vitamins. The company was also convicted for its role in an unrelated conspiracy on citric acid between 1991 and 1995 and fined $2.9 million for that offence. The conviction on citric acid follows that of ADM, Haarmann & Reimer and Jungbunzlauer who were fined a total of $8.6 million, last year, for their participation in the citric acid conspiracy.

BASF AG was fined $18 million in connection with the vitamin conspiracies. In addition, the Court imposed a $1 million fine for its participation in the choline chloride conspiracy. This conspiracy involved an agreement with other parties not to supply the Canadian market with choline chloride, a feed additive for poultry and swine, from 1992 to 1995.

The Court imposed a fine of $14 million on Rhône Poulenc S.A. with respect to conspiracies relating to vitamins A and E. Two Japanese corporations; Daiichi Pharmaceutical Co., Ltd. and Eisai Co. Ltd. were sentenced to fines of $2.5 million and $2 million respectively for their participation in vitamin conspiracies involving B5 and B6, for Daiichi, and vitamin E in the case of Eisai.

The conspiracies were designed to allocate the sale and artificially raise the prices of certain vitamins and related products, including vitamins A, B2, B5, B6, C, E, Betacarotene and vitamin premixes, the most widely used vitamins in food, animal feed and pharmaceutical products. Sales in Canada of bulk vitamins by the above noted producers were between $650 and $700 million over the period of the conspiracies.

The conviction with respect to citric acid concludes the inquiry relating to this product. However inquiries into choline chloride and bulk vitamins are continuing.

Copies of the documents filed before the Federal Court of Canada, Trial Division, in Toronto are available here:

F. Hoffmann-La Roche Ltd (Court File number T-1665-99)
Agreed Statement of Facts (PDF: 398 KB)
Indictment (PDF: 139 KB)

BASF AG (Court File number T-1664-99)
Agreed Statement of Facts (PDF: 477 KB)
Indictment (PDF: 141 KB)

Rhône Poulenc S.A. (Court File number T-1666-99)
Agreed Statement of Facts (PDF: 209 KB)
Indictment (PDF: 45 KB)

Daiichi Pharmaceutical Co., Ltd. (Court File number T-1668-99)
Agreed Statement of Facts (PDF: 190 KB)
Indictment (PDF: 55 KB)

Eisai Co. Ltd. (Court File number T-1667-99)
Agreed Statement of Facts (PDF: 188 KB)
Indictment (PDF: 38 KB)