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Vitamin Price Fixing Triggers Class Action

Tuesday, March 2, 2004

by Warren Key - Gippsland Aquaculture Industry Network (GAIN)

Australia - National law firm, Maurice Blackburn Cashman have commenced class action  proceedings against several companies for compensation resulting from alleged price fixing of vitamin products used in the animal nutrition market in Australia.

A number of products were covered by the class action including:
vitamins A, E, B1, B2, B5, C, Betacarotene or Canthaxanthin for animal nutrition or health purposes or pre-mixes containing these vitamins.

Canthaxanthin is widely used in the Aquaculture industry as a feed additive particularly in the salmon farming industry. More information on Canthaxanthin is available below this article.

Three companies have brought the class action against the defendants, claiming damages and alleging that the "cartel" was actively engaged in price fixing  in the 1990's. They claim this was in breach of the Trade Practices Act 1974, and are now claiming remedies including injunctions and damages on behalf of themselves and all other members of the class action group.

The companies being sued are members of the F. Hoffman-La Roche group (being F Hoffmann-La Roche Ltd, Roche Vitamins Asia Pacific Pte Ltd, Roche Products Pty Ltd and Roche Vitamins Australia Pty Ltd), the Aventis group (being Aventis SA, Aventis Animal Nutrition SA, Aventis Animal Nutrition Asia Pacific Pte Ltd and Aventis Animal Nutrition Pty Ltd), and the BASF group (being BASF AG, BASF East Asia Regional Headquarters Ltd and BASF Australia Ltd).

The ACCC (Australian Competition Consumer Commission) has successfully prosecuted the Australian defendants for their participation in the cartel. In February 2001the Australian Federal Court found the participants guilty of illegal price fixing and market sharing arrangements. This resulted in record penalties of AUD$26M being imposed. Further information about the ACCC's prosecution of the cartel participants is available at the ACCC website www.accc.gov.au 

Damages were not recovered by the ACCC prosecution on behalf of the affected businesses and civil action is necessary to pursue the matter further. Further information for those affected or those who believe they may have been affected during the period March 1992 to December 1999 is available on the Maurice Blackburn Cashman website at: http://www.mauriceblackburncashman.com.au/ca_vitamins.htm

The price fixing activities have not been restricted solely to Australia. In May 1999, more than thirty class action suits were lodged in the US in respect of financial losses caused by the cartel. Some of these class actions were settled in September 1999. The resulting settlement provided for a payout totalling an incredible $USD1.1 Billion. This amount represented a refund of approximately 20 cents for every dollar spent by businesses on affected vitamins purchased in recent years.

F. Hoffman-La Roche Ltd, BASF AG and several of their senior executives were found guilty of price fixing related to the cartel in May 1999. These charges were made by the Anti-Trust Division of the United States Department of Justice and resulted in fines totalling $USD725 Million.
Rhone Poulenc SA was not charged due to co-operation with authorities during the investigation.
More information about the US Department of Justice prosecution is available at:
http://www.usdoj.gov/atr/cases.html

F. Hoffman-La Roche Ltd, BASF AG and Rhone Poulenc SA have also been pursued in relation to the matter by the Canadian Competition Bureau. All three have pleaded guilty and now face civil action in Canada. The Canadian Competition Bureau has obtained convictions and imposed record fines against a number of vitamin manufacturers for their involvement in the cartel. Class actions are also pending in British Columbia, Ontario and Quebec. More information on specific  cases can be located at: http://www.strategis.ic.gc.ca/sc_consu/engdoc/homepage.html
Search for "Vitamin Price Fixing" for relevant information.

In November 2001record fines totalling EURO$855.22 (approximately AUD$1.5 Billion) were imposed on a number of companies by the European Commission for their participation in price fixing and secret market sharing arrangements affecting vitamin products.
The European Commission decision document can be viewed online at:
http://europa.eu.int/eur-lex/pri/en/oj/dat/2003/l_006/l_00620030110en00010089.pdf (english)

Further regulatory proceedings are also being pursued in New Zealand, Switzerland and by the European Union.

About Canthaxanthin
Canthaxanthin is a naturally occurring carotenoid found in many different plants and animals. It is the red colouring of many fruits, vegetables, and flowers It gives the pink hue of the feathers of brightly coloured tropical birds such as flamingos and roseate spoonbills. A few species of pink shellfish and some ocean crustaceans such as the red lobster contain this xanthophyll as does the pink flesh of salmon and the red spots on the skin of trout.
 

Canthaxanthin functions as an ultra violet photon absorber, a single and triplet oxygen quencher, and a free radical deactivator. The incredible endurance of pink salmon on their long migrations to spawning grounds may possibly be due to the antioxidant qualities of Canthaxanthin saturating their bodies. They swim for thousands of miles in highly ionized oxygenated water (condition which would normally be fatal to a fish) without damage or death. Canthaxanthin is a pigment, belonging to the same family as beta-carotene.

For further information concerning the Australian class action contact:
Maurice Blackburn Cashman
Brook Davie or Bernard Murphy
Level 10, 456 Lonsdale St,
Melbourne, Victoria, Australia
, 3000.
Ph:  (03)9605 2872
Fax: (03)9600 2401
Email: kyliereid@mbc.aus.net

 

Additional information  is available at the following address.
http://www.mauriceblackburncashman.com.au/ca_vitamins.htm

Author Footnote:
Warren Key is an Executive Board Member of the Gippsland Aquaculture Industry Network and is also the webmaster of the Growfish Aquaculture Portal. He can be contacted at webmaster@growfish.com.au

 

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