At the end of September, the European Court of First Instance rejected the appeals
by Archer Daniels Midland
Company (ADM) and Jungbunzlauer
against a
December 2001 decision by the European Commission. The court ruled that over the
period 1991 through 1995 ADM and Haarmann and Reimer of the USA, Cerestar
Bioproducts of Holland and, Hoffmann-LaRoche and Jungbunzlauer of Switzerland
participated in a cartel to fix prices and manipulate the market for citric
acid.
The EC fine for the five guilty companies was €135 million with ADM
responsible for €40 million.
Serial offenders of price fixing
In 1995 ADM was found guilty in US courts of contravening the Sherman Antitrust Act by operating a cartel together with Ajinimoto and Kyowa Hakko Kogyo of Japan and Sewon and Cheil Jedung of Korea, to fix the price of lysine. In this case ADM was fined $100 million.
In 1995 ADM was found guilty in US courts of contravening the Sherman Antitrust Act by operating a cartel together with Ajinimoto and Kyowa Hakko Kogyo of Japan and Sewon and Cheil Jedung of Korea, to fix the price of lysine. In this case ADM was fined $100 million.
In 1999, the US Department of Justice imposed penalties totaling over $750
million on ADM ($500 million) and German pharmaceutical giant BASF ($225
million) and ordered restitution to integrators as a result of collusion with
Rhone Poulenc of France to fix the prices of vitamins over the period 1990
through 1995.
The cost of price fixing
Vigorous investigation and prosecution of cases involving unfair business practices is obviously necessary. Unrestrained, multinational suppliers will engage in price fixing, manipulating markets through non-competitive supply, predatory pricing and other activities which limit free exercise of pricing based on competitive factors including supply and demand.
Vigorous investigation and prosecution of cases involving unfair business practices is obviously necessary. Unrestrained, multinational suppliers will engage in price fixing, manipulating markets through non-competitive supply, predatory pricing and other activities which limit free exercise of pricing based on competitive factors including supply and demand.
Creating artificially high prices for nutrients,
pharmaceutical products or packaging increases costs to producers. This reduces
margins, limits return on investment and in the long-term these hidden costs are
borne by both consumers and shareholders in production enterprises. It is even
more disturbing that two of the manufacturers involved in the most recent citric
acid case are serial offenders denoting profound deficiencies in corporate
ethics and responsibility. Price fixing is not a technical offense and should be
regarded in a serious light by both regulators and the poultry
industry.
By: Simon Shane
By: Simon Shane
