Firms to Settle Class Action Over Citric Acid Prices
Four companies accused of fixing the price of citric acid, an essential food processing ingredient, have agreed to pay $94 million to settle a class-action lawsuit, attorneys said Monday.
The companies are food giant Archer-Daniels-Midland Co., Haarmann & Reimer Corp., Hoffman-LaRoche Inc. and Jungbunzlauer Inc.
The fifth defendant, Cargill Inc., is continuing to fight the suit.
The lawsuit, filed by bottlers and processors, said the companies met secretly around the world to fix prices and divide up market shares in the booming market for citric acid, an ingredient that extends a product’s shelf life. Citric acid is a $2-billion to $3-billion industry worldwide, with about half the product consumed in the United States.
The settlement was announced to U.S. District Judge Fern Smith on Friday and was filed in federal court in San Francisco on Monday, said Joseph Cotchett, attorney for the plaintiffs.
“We think this is an excellent result for the class and for all the people of the United States,” Cotchett said. “You can’t make soft drinks, you can’t can fruits or vegetables, you can’t make detergents without citric acid.”
The settlement is the third legal hit ADM has taken for price-fixing in as many months.
In October, the company agreed to pay $100 million--the largest criminal antitrust fine in history--and pleaded guilty to federal antitrust charges of fixing prices for lysine and citric acid.
And last week a federal grand jury in Chicago indicted three former ADM officials for lysine price-fixing.
The San Francisco settlement points to a possible international conspiracy, and the Justice Department was looking into the citric acid price-fixing.
“We are looking into price-fixing on the international level--the possibility of conspiracy,” said Justice Department spokesman Joe Krovisky.
He declined to identify the companies involved, but one count of ADM’s October guilty plea indicated that the company was under investigation for fixing citric acid prices internationally.
Under the civil settlement, ADM will pay $35 million, Haarmann & Reimer $46 million, Jungbunzlauer $7 million and Hoffman-LaRoche $5.6 million.
Decatur, Ill.-based ADM had no immediate response to the civil settlement. But under terms of the settlement, the companies did not admit any wrongdoing.
Haarmann & Reimer, based in Springfield, N.J., also had no immediate reaction. Hoffman-LaRoche, a subsidiary of Roche Holding, is headquartered in Switzerland, while Jungbunzlauer Inc. is in Austria.
The final defendant, Minneapolis-based Cargill Inc., has balked at a settlement.
