Saturday, September 25, 1999
P&G suing vitamin makers
Suppliers fixed prices, company says
BY RANDY TUCKER and EARNEST WINSTON
The Cincinnati Enquirer
While making sure consumers got their daily doses of vitamins and iron in such products as Sunny Delight orange drink and Jif peanut butter, Procter & Gamble says it was getting overcharged by its vitamin suppliers.
The Cincinnati packaged-goods giant and Sundor Brands Inc. — a Florida-based manufacturer that makes Sunny Delight for P&G — brought suit Friday against six of the world's biggest vitamin makers, accusing them of taking part in a worldwide conspiracy to fix prices for their products.
The suit, filed in U.S. District Court in Cincinnati, seeks unspecified damages from European firms Hoffman LaRoche, BASF and Rhone-Poulenc and Japanese companies Daiichi Pharmaceutical, Eisai and TakedaChemical.
Although P&G did not put a dollar figure on the damages that it hopes to collect, the company said in the lawsuit that it will seek “threefold the damages determined to have been sustained by plaintiffs.”
That amount could be staggering, according to Doug Hall, a former P&G manager and founder of Eureka Ranch, the Newtown-based corporate think tank.
“It has to be a significant amount if they are going through the trouble of filing suit,” Mr. Hall said. “A suit requires large expenditures, not only in the cost of litigation but the executives' time.”
The six vitamin makers already have pleaded guilty to U.S. antitrust violations and agreed earlier this month to pay more than $1 billion to settle the federal government's charges that they took part in the price-fixing conspiracy.
So far, the government has collected a total of $850 million from the six vitamin makers, according to the U.S. Justice Department, and a handful of players in the price-fixing conspiracy have even agreed to serve prison time in the United States.
The so-called vitamin cartel allegedly had been scheming for more than a decade to artificially increase the price of vitamins A, B, C and E, the government said.
Those vitamins are essential elements in many brands produced by most food, beverage and animal-feed companies.
In addition to putting vitamins into Sunny Delight and Jif, P&G uses them in Fat-Free Pringles chips, Oil of Olay skin-care lotion and Pantene Pro-V shampoo, among other products.
“From 1988 through the present, plaintiffs purchased vi tamins, and by reason of the antitrust violations herein alleged, paid more for such vitamins than they would have paid in the absence of such antitrust violations,” P&G said in the lawsuit.
Reached at his Wrightsville Beach, N.C., home late Friday, Michael Hession of TakedaChemical's Takeda Vitamin & Food U.S.A. Inc. — a defendant in the lawsuit — said: “I'm not allowed to disclose any information” and hung up his phone.
Other defendants could not be reached for comment.
Following the settlement agreements with the United States, several powerful U.S. companies — including Coca-Cola and Kraft Foods — have joined together in a class-action lawsuit against the vitamin makers.
Other food and beverage companies in other nations are expected to bring class-action suits against the vitamin makers, as well.
But P&G won't be joining the pack, Sydney McHugh, a P&G spokeswoman, said late Friday.
“Rather than being involved in ongoing class-action proceedings over which we have no control, we are exercising our legal right to file a direct action,” she said.
Ms. McHugh declined to comment further on the lawsuit.
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