Vitamin Execs Sentenced in Price Fixing

Four former executives of European vitamin companies agreed Thursday to plead guilty, pay fines and serve time in U.S. prisons for scheming to fix the prices of an alphabet soup of vitamins around the world during the 1990s, the Justice Department said.

In four criminal cases filed in U.S. District Court in Dallas, the department charged three former BASF executives and one former F. Hoffmann-LaRoche Ltd. executive conspired with others to raise and fix the prices and allocate the sales volumes of vitamins sold in the United States and abroad.

The conspiracy lasted from January 1990 until February 1999 and affected the vitamins most commonly used as nutritional supplements or to enrich human food and animal feed--vitamins A, B2, B5, C, E and beta carotene, the government said.

With Thursday’s cases, the Justice Department will have collected more than $725 million in criminal fines from 18 prosecutions against the world vitamin conspiracy, which Assistant Atty. Gen. Joel Klein called “the largest and most far-reaching cartel ever prosecuted by the antitrust division.”

Thursday’s cases also charged that the conspirators rigged the bids and allocated contracts for vitamin premixes for customers throughout the United States. Vitamin premixes are used to enrich breakfast cereals and many other processed foods.

Last May, Hoffmann-LaRoche pleaded guilty to the same conspiracy and was sentenced to pay a record $500-million criminal fine. In September, BASF pleaded guilty in the vitamin conspiracy and was sentenced to pay a $225-million criminal fine.

Thursday’s charges were brought against two Swiss nationals, Andreas Hauri and Dieter Suter, and two Germans, Reinhard Steinmetz and Hugo Strotmann. Hauri was a marketing director for Hoffmann-LaRoche’s vitamin division; the other three were top executives for BASF.

Hauri agreed to serve four months in a U.S. prison and pay a $350,000 fine.

Steinmetz, a former president of BASF’s fine chemicals division, agreed to serve 3 1/2 months in prison and pay a $125,000 fine. Suter, also a former BASF fine chemicals division president, and Strotmann, a former BASF group vice president, each agreed to serve three months in prison and pay a $75,000 fine. Steinmetz, who headed the division when the plot began, was succeeded by Suter in 1996; Strotmann joined the scheme in 1995, the Justice Department said.