Seattle -October 10, 2000 - Washington consumers and businesses will recover $10.6 million in damages under a settlement in a global price fixing conspiracy case, Attorney General Christine Gregoire announced today.
The six settling companies are accused of illegally conspiring to raise the price of vitamins bought by consumers and on vitamin products used in the manufacture of many food products.
"Vitamins, Inc., as the cartel called itself, met secretly all over the globe to scheme how it would illegally fix prices on the food we buy to feed our families," Gregoire said. "They conspired on how much product each company would produce, how much they would charge, and which customers they would sell to," she added.
"Nearly every item on grocery store shelves today – from cornflakes and steak to petfood and cartons of milk – use or add vitamins or vitamin products at some stage in the agricultural or manufacturing process, " Gregoire said. "Because vitamin manufacturers charged illegally high and manipulated prices, Washington businesses and consumers have suffered by paying more," Gregoire said.
While the cost of a grocery product may have increased only a fraction of a cent, Gregoire noted this is a case where companies illegally made a fortune by ripping off people by a small amount on hundreds of millions of purchases. "A penny or two of illegal profit on each grocery cart of food purchased over eight years by Washington families adds up to real money," Gregoire said.
In the settlements announced today, states across the country accuse the vitamin manufacturers of conspiring to fix prices, and Washington is one of 23 states that will be recovering substantial amounts of money for consumers and businesses. The companies will pay $214 million under the settlement.
The remaining states will recover money for government purchases, but are not included in the larger settlement because their state antitrust laws do not afford them the same certainty provided in Washington's state antitrust law.
Gregoire emphasized that food manufacturers were not part of the price fixing scheme, and, in fact, were victims just like consumers.
The state’s legal action follows a 1999 class-action settlement in which vitamin manufacturers committed to pay more than $1.1 billion to businesses that bought vitamins directly from the price-fixing manufacturers. These companies also pleaded guilty last year to criminal charges brought by the U.S. Department of Justice and paid a total of $862 million in fines.
Today’s settlement obtains restitution for "indirect purchasers" – businesses and consumers who bought vitamins and vitamin products from someone other than the price-fixing manufacturers.
This is the largest multi-state settlement in favor of indirect purchasers in history.
Because of the difficulty in providing a small rebate to millions of Washington consumers, the settlement provides for about $6.1 million to be distributed through grants for programs that benefit and improve the health or nutrition of Washington consumers, or advance nutritional, dietary or agricultural science. In addition, $1.4 million is for government agencies that paid higher prices because of the price-fixing conspiracy, and $3.1 million will go into a national pot to pay claims filed by businesses who also paid more for vitamins used in making their products.
Any business interested in learning more about how they might recover, or any program interested in applying for a grant, can contact the Attorney General's Office for more information.
The companies who are part of today’s settlement are: F Hoffman-LaRoche; Tekeda; Eisai Co., Ltd.; BASF; Daiichi Pharmaceutical Co. and Aventis.