Cartel Digest

Vitamins

Vitamins
  Overall Cartel Period 1989-1999
  Participants F. Hoffman-La Roche Ltd. and F. Hoffman-La Roche AG; BASF AG; Takeda Chemical Industries Ltd.; Eisai Co., Ltd.; Daiichi Pharmaceuticals Co., Ltd.; Merck KgaA; Degussa-Huls AG; Lonza AG; Nepera Inc.; Reilly Industries; DuCoa LP; Chinook Group Ltd.; Rhone-Poulenc SA; Solvay Pharmaceuticals BV; Aventis SA
  Total Fines (DOJ) $911 million
  Total Fines (EC) €855 million

From 1996 to 1999, regulators in various jurisdictions, including the European Commission (“EC”) and the U.S. Department of Justice (“DOJ”), investigated vitamin manufacturers for alleged cartel activity.  Raw vitamins and vitamin remixes are used to enrich cereals and numerous other processed foods for human and animal consumption.  During the cartel period, the vitamin industry was worth approximately $6 billion, with BASF, Hoffman-La Roche and Rhone-Poulenc (now Sanofi-Aventis) accounting for 75% of the market.  According to regulators, cartel members fixed prices and increases for various vitamin products and allocated sales quotas.  Between 1989 and 1999, regulators found that the members of the cartel—which was referred to as “Vitamins, Inc.”—participated in eight distinct market-sharing and price-fixing cartels.

 

Enforcement Highlights:

  • The EC imposed fines of more than €855 million. Five companies were found not liable by the EC because the five-year statute of limitations had expired under EU law.
  • The DOJ imposed fines of over $910 million.  Executives from companies participating in the cartel have entered plea agreements with the DOJ or have been convicted at trial, resulting in over 100 months of prison time and individual fines totaling over $1.1 million.
  • Hoffman-La Roche’s fine of $500 million is one of the largest fines ever imposed by the DOJ for a single cartel violation.
  • The Federal Court of Canada imposed fines totaling over $94 million CAD, and total fines of $575,000 CAD on three executives.
  • The Korean Fair Trade Commission (“KFTC”) imposed fines of almost ₩4 billion.  It was the second time in the history of the KFTC that the organization imposed fines on foreign companies for cartel activity.
  • Three Australian subsidiaries of global vitamin manufacturers were fined by the Australian Competition and Consumer Commission a total of $26 million AUD. 
Company Conspiracy Period Fine (USD) Plea Date No. of Excluded Individuals Plea Agreement
F. Hoffman-La Roche Ltd. 1/90-2/99 $500 million 05/20/1999 4 Plea Agreement
BASF AG 1/90-2/99 $225 million 05/20/1999 4 Plea Agreement
Takeda Chemical Industries Ltd. 1/91-12/95 $72 million 09/09/1999 N/A  
Eisai Co., Ltd. 1/91-2/99 $40 million 09/09/1999 N/A  
Daiichi Pharmaceuticals Ltd. 1/91-2/99 $25 million 09/09/1999 N/A  
Merck KgaA 1/91-12/95 $14 million 05/09/2000 N/A  
Degussa-Huls AG 1/92-3/98 $13 million 05/05/2000 N/A  
Lonza AG 1/92-3/98 $10.5 million 03/01/1999 N/A  
Nepera Inc. 1/92-7/95 $4 million 05/05/2000 2  
Reilly Industries Inc. 9/94-3/98 $2 million 05/05/2000  
DuCoa LP 1/88-9/98 $500,000 09/20/2002 5 Plea Agreement
Chinook Group Ltd. 1/88-9/98 $5 million 09/29/2002 N/A  
Rhone Poulenc S.A. - Immunity  
Individual Company Prison Sentence Fine (USD) Plea Date Plea Agreement
Kuno Sommer, Director of Worldwide Marketing, Fine Chemicals Division F. Hoffman-La Roche Ltd. 4 months $100,000 07/23/1999 Plea Agreement
Andreas Hauri, Executive VP, Head of Global Marketing F. Hoffman-La Roche Ltd. 4 months $350,000 04/06/2000  
Dieter Suter, President, Fine Chemicals Division BASF AG 3 months $75,000 04/06/2000  
Hugo Strotmann, Group VP, Fine Chemicals Division BASF AG 3 months $75,000 04/06/2000  
Roger Noack, President Nepera Inc. 8 months $50,000 05/05/2000  
John Fischer, President, Basic and International Products DuCoa LP 8 months $20,000 03/02/1999  
Lindell Hilling, President DuCoa LP 12 months $20,000 03/02/1999  
Antonio Felix, VP, Basic Products and International Division DuCoa LP N/A $20,000 03/02/1999 Plea Agreement
Roland Brönnimann , President, Vitamins & Fine Chemicals Division F. Hoffman-La Roche Ltd. 5 months $150,000 08/19/1999  
Reinhard Steinmetz , President, Fine Chemicals Division BASF AG 3.5 months $125,000 04/06/2000  
Daniel Rose, President DuCoa LP 27 months $20,000 07/18/2006 Sentencing Memorandum
John Kennedy, VP, Sales and Marketing Chinook Group Ltd. 12 months $20,000 03/02/1999  
Robert Samuelson, Sales Manager, Chinook Group, Inc. (US Subsidiary) Chinook Group Ltd. No fines imposed 03/02/1999  
David Purpi, VP, Sales and Marketing Nepera Inc. 1 year $100,000 05/05/2000  
Korea
Company Fine Date
F. Hoffman-La Roche Ltd. ₩ 1.9 billion 04/18/2003
BASF AG ₩ 967 million 09/04/2003
Aventis SA ₩ 245 million 04/18/2003
Eisai Co., Ltd. ₩ 184 million 04/18/2003
Daiichi Pharmaceuticals Ltd. ₩ 74 million 04/18/2003
Solvay Pharmaceuticals BV ₩ 5 million 04/13/2003
Australia
Company Fine Date
Roche Vitamins Australia Pty Ltd. $ 15 million 02/28/2001
BASF Australia Ltd. $ 7.5 million 02/28/2001
Aventis Animal Nutrition Pty Ltd. $ 3.5 million 02/28/2001
Canada
Company Fine Date
Degussa AG $ 2.5 million 10/16/2002
Lonza AG $ 1.1 million 10/16/2002
Nepera Inc. $ 240,000 10/16/2002
Takeda Chemical Industries Ltd. $ 5.2 million 03/01/2000
Merck KGaA $ 1 million 03/30/2000
Reilly Industries Inc. $ 30,000 10/16/2002
F. Hoffman-La Roche Ltd. $ 48 million 09/22/1999
Roussel Canada, Inc. $ 370,000 10/26/1999
BASF AG $ 18 million 09/22/1999
Rhone Poulenc S.A. $ 14 million 09/22/1999
Daiichi Pharmaceuticals Ltd. $ 2.5 million 09/22/1999
Eisai Co., Ltd. $ 2 million 09/22/1999
Europe
Company Fine Date
F. Hoffman-La Roche AG € 462 million 11/21/2001
BASF AG € 296.1 million 11/21/2001
Merck KgaA € 9.2 million 11/21/2001
Solvay Pharmaceuticals BV € 9.1 million 11/21/2001
Aventis SA € 5 million 11/21/2001
Daiichi Pharmaceuticals Ltd. € 23.4 million 11/21/2001
Takeda Chemical Industries Ltd. € 37 million 11/21/2001
Eisai Co., Ltd. € 13.2 million 11/21/2001
Canada
Individual Company Prison Sentence Fine Date
Andreas Hauri, Head of Global Marketing for Vitamins & Fine Chemicals Division F. Hoffman-La Roche Ltd. 0 $ 250,000 09/17/1999
Roland Bronnimann, President of Vitamins & Fine Chemicals Divisions F. Hoffman-La Roche Ltd. 0 $ 250,000 10/25/1999
Kuno Sommer, Director of Worldwide Marketing, Fine Chemicals Division Director of Worldwide Marketing, Fine Chemicals Division 0 $ 150,000 10/16/2002