2001/418/EC: Commission Decision of 7 June 2000 relating to a proceeding pursuant to Article 81 of the EC Treaty and Article 53 of the EEA Agreement (Case COMP/36.545/F3 — Amino Acids) (Text with EEA relevance) (notified under document number C(2000) 1565)

• Published date: 07 June 2001
• Official Gazette Publication: Gazzetta ufficiale delle Comunità europee, L 152, 07 giugno 2001,Diario Oficial de las Comunidades Europeas, L 152, 07 de junio de 2001,Journal officiel des Communautés européennes, L 152, 07 juin 2001

|

32001D0418

2001/418/EC: Commission Decision of 7 June 2000 relating to a proceeding pursuant to Article 81 of the EC Treaty and Article 53 of the EEA Agreement (Case COMP/36.545/F3 — Amino Acids) (Text with EEA relevance) (notified under document number C(2000) 1565)

Official Journal L 152 , 07/06/2001 P. 0024 - 0072

Commission Decision

of 7 June 2000

relating to a proceeding pursuant to Article 81 of the EC Treaty and Article 53 of the EEA Agreement

(Case COMP/36.545/F3 - Amino Acids)

(notified under document number C(2000) 1565)

(Only the German, English and French texts are authentic)

(Text with EEA relevance)

(2001/418/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European Community,

Having regard to the Agreement on the European Economic Area,

Having regard to Council Regulation No 17 of 6 February 1962, First Regulation implementing Articles 85 and 86 of the Treaty(1) as last amended by Regulation (EC) No 1216/1999(2),

Having regard to the Commission decision of 29 October 1998 to open a proceeding in this case,

Having given the undertakings concerned the opportunity to make known their views on the objections raised by the Commission pursuant to Article 19(1) of Regulation No 17, Commission Regulation No 99/63/EEC of 25 July 1963 on the hearings provided for in Article 19(1) and (2) of Council Regulation No 17(3), and subsequently Commission Regulation (EC) No 2842/98 of 22 December 1998 on the hearing of parties in certain proceedings under Articles 85 and 86 of the EC Treaty(4),

After consulting the Advisory Committee on Restrictive Practices and Dominant Positions,

WHEREAS:

I. THE FACTS

A. SUBJECT OF PROCEEDINGS

(1) This case concerns agreements on prices, sales volumes and the exchange of firm specific information on sales volumes of undertakings, producing and offering for sale synthetic lysine to distributors and/or industrial users established in the EEA, for the use in animal feeds. The present Decision covers the period September 1990 to June 1995.

B. THE UNDERTAKINGS AND THE ASSOCIATION CONCERNED

1. Archer Daniels Midland Company

(2) Archer Daniels Midland Company (ADM) is the ultimate parent company of a group of companies processing cereals and oil seeds worldwide. Worldwide ADM has over 200 plants including substantial assets in the EEA, among which are the world's largest soya bean processing facility in Europoort, the Netherlands, the world's largest multi-seed complex in Hamburg, Germany, and the world's largest soft-seed crushing plant in Erith, United Kingdom.

(3) ADM is a manufacturer of starch and starch products and entered into the biochemicals market because they expected higher returns from the production of chemicals based on starch products than on their traditional products. ADM's BioProducts Division was formed in 1989. At about that time, ADM's management decided to start producing lysine when it became aware that two other undertakings were about to set up production facilities in North America (but both undertakings gave up on ADM's expansion announcement). ADM's production facilities for lysine were completed in June 1992.

(4) Archer Daniels Midland Ingredients Ltd (ADM Ingredients) is a wholly owned subsidiary of ADM, dealing with ADM's European amino acids business during the period covered by the present investigation.

(5) In the year ending 30 June 1995, all companies belonging to the ADM group had a total turnover of approximately USD 12,6 billion (EUR 12,6 billion); in the year ending 30 June 1998, the total turnover was approximately USD 16,1 billion (EUR 16,1 billion). In 1995, ADM's worldwide turnover for lysine was approximately USD 202 million (EUR 202 million), of which approximately USD 41 million (EUR 41 million) was made in the EEA.

2. Ajinomoto Company, Incorporated

(6) Ajinomoto Company, Inc. (Ajinomoto) is the ultimate parent company of a group of companies manufacturing chemicals, including lysine, and food products. Backed by capabilities in amino acid technology, the group of companies is also engaged in the development and manufacture of pharmaceuticals. Ajinomoto's operations encompass manufacturing and marketing bases in 21 countries.

(7) Ajinomoto operates amino acid feed grade production plants in Japan, the EEA (Eurolysine SA - "Eurolysine"), in the United States, Thailand, China, and Brazil.

(8) In 1974, Eurolysine was established as a joint venture between Ajinomoto and Orsan to manufacture and market feed grade lysine in Europe. In 1976, Eurolysine built a plant in Amiens. Eurolysine also started producing lysine in Italy through its wholly owned subsidiary Bioitalia Biopro Italia SpA. The total number of employees of Eurolysine is currently 338. Eurolysine is the sole producer of feed grade lysine in the EEA.

(9) Ajinomoto and Orsan each owned 50 % of Eurolysine until September 1994. At that time, Ajinomoto increased its interest to 75 % by purchasing additional shares from Orsan. In 1996, Ajinomoto acquired all of the Eurolysine shares then held by Orsan, and made Eurolysine its wholly owned subsidiary.

(10) In the year ending 31 March 1995, all companies belonging to the Ajinomoto group had a total turnover of approximately JPY 725,7 billion (EUR 5,1 billion). In the year ending 31 March 1998, the total turnover was approximately JPY 836,0 billion (EUR 5,8 billion). In 1995, Ajinomoto's world-wide turnover for lysine was approximately USD 239 million (EUR 239 million), of which approximately FRF 483 million (EUR 75 million) was made in the EEA.

3. Kyowa Hakko Kogyo Company Limited

(11) Kyowa Hakko Kogyo Company Limited (Kyowa) is the ultimate parent company of a group of companies established and operating worldwide, and involved in the development, production and marketing of pharmaceuticals, food, chemicals, agricultural and animal health products, alcohol, and alcoholic beverages. Kyowa has amino acid production plants in Japan, Hungary and Mexico. Kyowa introduced the lysine fermentation process in 1958.

(12) Kyowa's European subsidiary is Kyowa Hakko Europe GmbH (Kyowa Europe), which is responsible for the marketing of lysine in the EEA.

(13) In 1995, all companies belonging to the Kyowa group had a turnover of approximately JPY 375 billion (EUR 2,8 billion). In that year, Kyowa's worldwide turnover for lysine was approximately JPY 10 million (EUR 73 million), of which approximately DEM 30 million (EUR 16 million) was made in the EEA. In the year ending 31 March 1998, the total turnover of the Kyowa group was approximately JPY 398 billion (EUR 2,8 billion).

4. Daesang Corporation

(14) Daesang Corporation is a Korean undertaking and the ultimate parent company of a group operating worldwide, the activities of which include the manufacture of seasonings, animal feeds, and amino acids. It was created through a merger of Daesang Industrial Limited and Miwon Corporation Limited. Daesang Industrial Limited was formerly known as Sewon Corporation Limited and Miwon Foods Corporation Limited (together Sewon). In the first half of 1998, Sewon transferred its worldwide lysine business to an undertaking belonging to a group of companies unrelated to any addressees of this Decision.

(15) At the beginning of 1992, Miwon Handels GmbH was established and dealt with Sewon's amino acids business in Europe. In November 1994, Miwon Handels GmbH changed its name to Sewon Europe GmbH (together Sewon Europe).

(16) In 1995, Sewon's worldwide turnover was approximately Korean Won 225 billion (EUR 227 million). In that year, its worldwide turnover for lysine was approximately DEM 125 million (EUR 67 million), of which approximately DEM 28 million (EUR 15 million) was made in the EEA. In 1998, Sewon's worldwide turnover was approximately Korean Won 1,47 trillion (EUR 946 million).

5. Cheil Jedang Corporation

(17) Cheil Jedang Corporation (Cheil) is the ultimate parent company of a group of companies established and operating worldwide. It was established as the Korean Samsung Group's first manufacturing affiliate in 1953. In 1993, Cheil became independent. Cheil is a diversified company focusing among other things on pharmaceuticals and foodstuffs.

(18) Cheil entered the lysine market in 1991. In 1995, Cheil had a turnover of approximately USD 1,9 billion (EUR 1,9 billion). In that year, Cheil's worldwide turnover for lysine was approximately USD 52 million (EUR 52 million), of which approximately EUR 17 million was made in the EEA. In 1997, Cheil had a turnover of approximately USD 1,4 billion (EUR 1,4 billion).

6. Fefana

(19) The Federation Européene des Fabricants d'Adjuvants pour la Nutrition Animale (Fefana) has its central office in Brussels. It is a body that represents and promotes the scientific, technical and economic interests of animal feed additive manufacturers.

(20) Fefana was conceived in order to deal with the numerous Community legislative proposals impacting on the area of animal nutrition. The existing national professional associations dealing with the feed additive industry considered that the industry required a representation at European level and, for this reason, Fefana was founded in 1963.

C. THE PRODUCT

(21) Lysine is an essential amino acid. Amino acids are building blocks of protein, a major component of body tissues. Animals synthesise body proteins from amino acids released during digestion. Twenty-two different amino acids account for all the proteins found in life. Animals can synthesise only some of these. The others, designated as essential, must be supplied by the diet, either bound naturally to protein or in a chemically pure form. The main sources of amino acids for animals are proteins of vegetal or animal origin: soybean meal, rapeseed meal, corn gluten feed, peas, fishmeal, meat and bonemeal, skimmed milk and other products. Another source of certain amino acids is...