Corporate buyers of bulk vitamins presented to a U.S. federal judge the details of a proposed $1.17 billion settlement with vitamin makers over alleged price-fixing.This content was published on November 4, 1999 - 15:46
Corporate buyers of bulk vitamins presented to a U.S. federal judge the details of a proposed $1.17 billion settlement with vitamin makers over alleged price-fixing.
"It's the largest class-action antitrust settlement in the country," Jonathan Schiller, a lead attorney for plaintiffs in the case, told reporters Wednesday.
A spokesman for Swiss-based pharmaceuticals giant Roche confirmed the settlement and said the company’s share of payment would amount to $632 million. Roche had already set aside reserves of $640 million in anticipation of the settlement, the spokesman said Wednesday night.
The parties presented the agreement to District Judge Thomas Hogan. He is expected to rule Thursday on preliminary approval of the agreement and schedule hearings for final approval.
The lawsuit alleged that seven vitamin makers oversaw a nine-year conspiracy that caused hundreds of food and beverage companies to pay artificially high prices for vitamins A, B, C and E. The higher prices were passed on to consumers of products ranging from breakfast cereal to peanut butter.
The settlement involves the world's largest vitamin makers -- Hoffmann-LaRoche of Switzerland, BASF AG of Germany, Rhone-Poulenc SA of France; and Daiichi Pharmaceutical Co., Eisai Co. and Takeda Chemical Industries Ltd., all of Japan. A smaller company, Hoechst Marion Roussel, is also involved in the settlement.
The six large companies account for about 80 percent of bulk sales of the most popular vitamins.
Schiller said in a telephone interview that the hundreds of companies involved in the class-action will receive an average of 18 to 20 percent reimbursement of the purchases they made between 1990 and 1998.
"What we settled today was far and away the most substantial amount of vitamin sales that were affected by the price-fixing," Schiller said.
The vitamin makers maintain in the settlement that their defences were good, but said they signed the agreement "solely to avoid the further expense, inconvenience and burden of this litigation."
The agreement also prohibits the seven companies from engaging in any questionable conduct, including price-fixing, for three years.
About four dozen law firms involved in the suit will share nearly $122 million or about 11 percent in legal fees. Lawyers usually earn 20 to 30 percent in a class action settlement.
Schiller said they reduced their fees in exchange for an unusual agreement -- if any of the companies involved in the class-action drop out and make a separate settlement better than the current agreement, the vitamin makers would have to match that new amount for the entire settlement.
Last May, the Justice Department reached settlements with Roche and BASF that called for those companies to pay $725 million for colluding to divide up markets and set wholesale prices.
The Associated Press contributed to this report.
This article was automatically imported from our old content management system. If you see any display errors, please let us know: firstname.lastname@example.org