State settles antitrust suit
against vitamin companies

Hawaii will receive about
$1 million of a $107 million decision

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By Debra Barayuga
Star-Bulletin

The state has agreed to settle antitrust claims against six vitamin companies that allegedly conspired to fix prices on products sold in Hawaii, the mainland and worldwide.

State Attorney General Earl Anzai filed suit against the companies yesterday in Circuit Court to implement the settlement and is seeking court approval.

The settlement includes about $107 million to be shared by Hawaii, 20 other states, the District of Columbia and Puerto Rico, according to Anzai. Hawaii's share is estimated to be more than $1 million.

The state filed suit on behalf of vitamin purchasers here against New Jersey-based corporations Hoffmann-La Roche Inc., Roche Vitamins Inc. and BASF Corp.

Also named in the suit were Japan-based corporations Daiichi Pharmaceutical Co., Eisai Co. and Takeda Chemical Industries Ltd., and Aventis Animal Nutrition S.A. of France.

The companies have agreed to the settlement. Company officials could not be reached for immediate comment.

The defendants control more than 60 percent of the world's vitamin market and about 80 percent of the vitamin markets for animal nutrition.

According to the state's complaint, the defendants manufactured or distributed vitamin products used by the Hawaii agricultural industry as an ingredient in animal-feed mixes and nutrition products and for individuals for personal consumption.

Their acts have suppressed free and open competition, resulting in Hawaii consumers paying higher prices for vitamin products and robbing them of their ability to purchase these products at prices they would have paid in a competitive market, the suit said.

The state contends that from 1990 and continuing through 1999, the defendants stifled competition and affected Hawaii commerce by setting prices on vitamins sold in Hawaii, controlling the volume of vitamins each defendant sold in Hawaii and agreeing among themselves not to compete over sales volumes.

The agreements were discussed in covert meetings and discussions, and price lists have been published as a result of those agreements, the suit stated. The defendants allegedly were able to conceal their conspiracy in part by manipulating bids, offering "hush money" to individuals who learned of their conspiracy, and limiting their plan to a small number of key officials at each company, the suit said.