Newspaper article International Herald Tribune

Chinese Vitamin C Makers Fined by U.S. ; Penalty of $162 Million Is Imposed for Acting Together to Raise Prices

Newspaper article International Herald Tribune

Chinese Vitamin C Makers Fined by U.S. ; Penalty of $162 Million Is Imposed for Acting Together to Raise Prices

Article excerpt

The case is significant because China produces about 80 percent of the world's supply of vitamin C, a key ingredient in items like food and soft drinks as well as animal feed and even cosmetics.

A group of Chinese vitamin C makers was ordered by a U.S. District Court to pay $162.3 million in fines after a jury found the companies guilty of engaging in price-fixing.

A jury in New York returned the verdict Thursday after a group of American companies accused the Chinese producers of acting in concert to raise prices in violation of U.S. antitrust laws.

The case is significant because China produces about 80 percent of the world's supply of ascorbic acid, or vitamin C, which is a key ingredient in items like food and soft drinks as well as animal feed and even cosmetics.

The Chinese-made vitamins end up as ingredients in products made by major brands like Coca-Cola.

The case was striking because of the unusual defense that the Chinese companies mounted. While acknowledging in court that they had colluded on setting prices, lawyers representing the Chinese companies said they were compelled to do so by the Chinese government.

In court papers, China's Ministry of Commerce supported the Chinese companies' argument.

But lawyers who brought the class-action suit against the Chinese companies said the companies acted on their own and not on government orders.

The jury agreed and voted in favor of a $54 million judgement against four Chinese companies. The U.S. District Court judge in the case trebled the damages, as required by U.S. antitrust law.

Two other Chinese companies involved in the case agreed to pay about $32 million to settle the case. One company settled shortly before the trial began, and another settled during the proceedings.

William A. Isaacson, an attorney for the plaintiffs at Boies, Schiller & Flexner, said the fines would change the way Chinese companies did business in the United States. …

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