Attorney General Lockyer Announces $80 Million Antitrust Settlement Involving Alleged International Vitamins Price-fixing Scheme
(SACRAMENTO) - Attorney General Bill Lockyer today announced an $85 million antitrust settlement over the international price-fixing scheme by six major vitamin manufacturers that resulted in California consumers and businesses being overcharged for a variety of products over the last 12 years.
"After secret meetings in Belgium, Switzerland, Mexico and other places around the world, the companies imposed a hidden ‘vitamin tax' on everyday products that was passed to consumers and businesses," Lockyer said. "This caused Californians to pay millions of dollars more over the years for fortified food such as breakfast cereals, milk, juices, pet food, dietary supplements and animal feed, as well for beauty products such as shampoos, conditioners, lipstick and creams."
The settlement was reached with three European and three Japanese companies, which together control more than 80 percent of the world's vitamin market. The companies are Aventis Animal Nutrition (formerly Rhone-Poulenc), BASF Corporation, Daiichi Pharmaceutical, Eisai Co., Hoffman-LaRoche and Takeda Chemical. The vitamin products include vitamin A, C, E, H, several B vitamins, and other vitamins and carotenoids. The settlement agreement, which was signed by the parties, will be filed in San Francisco Superior Court. The settlement agreement, along with proposed plans for distribution of company payments, would become effective only upon approval by the court.
Lockyer said the settlement provides $42 million for refunds to California businesses, including farmers and grocery store owners who were harmed by the price-fixing. Because of the difficulty in determining how much individual consumers paid in higher prices over 12 years, the consumer portion of the settlement – about $38 million – will be used to fund projects of general benefit to Californians such as nutrition and aging research, food banks, health education and dairy and poultry industry grants. The State of California also will receive some $5 million for state government purchases.
California's settlement is separate from the $225 million settlement reached by other states. The vitamin manufacturers, which pleaded guilty in federal court in 1998, agreed to pay another $30 million to settle the claims of California and most states for government purchases of vitamins. California's settlement also resolves several class action cases filed last year. San Francisco attorneys William Bernstein and Guido Saveri led settlement talks for those cases.