Canadian Participant in an International Price-fixing Conspiracy For a Feed Additive Fined $2.25 Million

OTTAWA, September 24, 1999 — The Competition Bureau announced today that the Federal Court of Canada imposed a fine of $2.25 million on Chinook Group Limited, of Toronto, Ontario, for its participation in an international conspiracy to fix prices and share markets for choline chloride.

The amount of the fine results from a decision to seek a reduced sentence, due to the company's early and valuable cooperation with the Bureau's investigation and the difficult financial circumstances of Chinook Group Limited.

The conviction is for an offence, contrary to the Competition Act, which occurred between January 1988 and September 1998.

The parties to the conspiracy produced a majority of the world supply of choline chloride during the offence. They agreed on a scheme designed to allocate market shares, withdraw from certain markets, and to fix and increase the price of choline chloride, also known as vitamin B4, in Canada and abroad. Choline chloride is an important additive widely used in the animal feed industry, primarily for chickens and pigs.

The result of the conspiracy was that a very significant proportion of the Canadian market was insulated from foreign competition and Chinook, a major North American producer and the only Canadian producer of choline chloride, maintained its position as the dominant supplier in Canada.

"Today's conviction further demonstrates the Bureau's determination to prosecute parties involved in international cartels, and to be especially vigilant where such activities raise artificial barriers to trade for Canadian companies and consumers," said Konrad von Finckenstein, Commissioner of Competition. "Domestic and foreign companies are paying increasingly significant penalties in Canada for such illegal activities."

This is one in a series of sentences resulting from the ongoing choline chloride inquiry. On September 17, 1999, Mr. Russell Cosburn, a former Vice-President of Chinook, was sentenced to a nine month prison term, to be served in the community, for participating in this conspiracy. The Court also ordered Mr. Cosburn to perform 50 hours of community service.

On September 22, 1999, BASF Aktiengesellschaft pleaded guilty and was convicted for an offence relating to its forbearance to compete in the sale of choline chloride in Canada. It paid a fine of $1 million.

In addition, on September 22, 1999, BASF and four other companies pleaded guilty to offences under the Competition Act in relation to an international conspiracy affecting the sale and supply of bulk vitamins in Canada and elsewhere.

To date, almost $130 million in fines have been imposed as a result of the Bureau's inquiries into unlawful and covert international arrangements among certain manufacturers and suppliers of feed and food additives, such as bulk vitamins, lysine, choline chloride, citric acid and other products, including sodium gluconate and graphite electrodes.

Copies of the documents filed with the Federal Court are available here:

Chinook Group Limited (Court File number T-1606-99)
Agreed Statement of Facts (PDF: 241 KB)
Indictment (PDF: 51 KB)