2003/2/EC: Commission Decision of 21 November 2001 relating to a proceeding pursuant to Article 81 of the EC Treaty and Article 53 of the EEA Agreement (Case COMP/E-1/37.512 — Vitamins) (notified under document number C(2001) 3695) (Text with EEA relevance)

• Published date: 10 January 2003
• Date of Signature: 31 January 2003
• Subject Matter: concorrenza,competencia,concurrence,legislación veterinaria,relaciones exteriores,Acuerdo de Asociación
• Official Gazette Publication: Gazzetta ufficiale dell’Unione europea, L 6, 10 gennaio 2003,Diario Oficial de la Unión Europea, L 6, 10 de enero de 2003,Journal officiel de l’Union européenne, L 6, 10 janvier 2003,Diario Oficial de la Unión Europea, L 94, 10 de abril de 2003

|

2003/2/EC: Commission Decision of 21 November 2001 relating to a proceeding pursuant to Article 81 of the EC Treaty and Article 53 of the EEA Agreement (Case COMP/E-1/37.512 — Vitamins) (notified under document number C(2001) 3695) (Text with EEA relevance)

Official Journal L 006 , 10/01/2003 P. 0001 - 0089

Commission Decision

of 21 November 2001

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

(Case COMP/E-1/37.512 - Vitamins)

(notified under document number C(2001) 3695)

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

(Text with EEA relevance)

(2003/2/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), and in particular Article 3 and Article 15(2) thereof,

Having regard to the Commission decision of 6 July 2000 to initiate 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 and 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(3),

Having regard to the final report of the Hearing Officer in this case,

Having consulted the Advisory Committee on Restrictive Practices and Dominant Positions,

Whereas:

1. FACTS

1.1. SUMMARY OF THE INFRINGEMENT

(1) This Decision imposing fines for infringements of Article 81(1) of the Treaty and Article 53 of the EEA Agreement is addressed to the following undertakings:

- F. Hoffmann-La Roche AG (hereafter "Roche"),

- BASF AG (hereafter "BASF"),

- Aventis SA (formerly Rhône-Poulenc) (hereafter "Aventis"),

- Lonza AG (hereafter "Lonza"),

- Solvay Pharmaceuticals BV (hereafter "Solvay"),

- Merck KgaA (hereafter "Merck"),

- Daiichi Pharmaceutical Co. Ltd (hereafter "Daiichi"),

- Eisai Co. Ltd (hereafter "Eisai"),

- Kongo Chemical Co. Ltd (hereafter "Kongo"),

- Sumitomo Chemical Co. Ltd (hereafter "Sumitomo"),

- Sumika Fine Chemicals Ltd (hereafter "Sumika"),

- Takeda Chemical Industries Ltd (hereafter "Takeda"),

- Tanabe Seiyaku Co. Ltd (hereafter "Tanabe").

(2) For the periods and for the different vitamin products specified in this decision, the manufacturers of vitamins A, E, B1, B2, B5, B6, C, D3, H, folic acid, beta-carotene and carotinoids supplying the Community and the EEA entered into and participated in a series of continuing agreements contrary to Articles 81(1) of the Treaty and Article 53 EEA by which they fixed prices for the different products, allocated sales quotas, agreed on and implemented price increases, issued price announcements in accordance with their agreements, sold the products at the agreed prices, set up a machinery to monitor and enforce adherence to their agreements, and participated in a structure of regular meetings to implement their plans.

(a) Participants, product, duration

>TABLE>

(b) Participants by product

>TABLE>

1.2. THE INDUSTRY

1.2.1. VITAMINS

(3) Vitamins are a group of micronutrients of various types of organic compounds required in small amounts in human and animal diet for normal growth, development and maintenance of life. Their physiological function in the organism and mode of action are diverse. Some vitamins are essential sources of certain coenzymes necessary for metabolism; others are involved in the metabolism of other vitamins. All known vitamins can be synthesised chemically.

(4) With very few exceptions, the living organism cannot itself synthesise vitamins. They have to be supplied in the diet or in dietary supplements. There are some 15 major vitamins.

(5) Vitamins are often grouped according to their solubility properties: of the products relevant for this case vitamin C and the B complex vitamins are water soluble; vitamins A, E and D are fat soluble.

(6) Compound animal feeds contain the vitamins required for the health and growth of particular species. Vitamins are added to human food products to replace losses in processing, to fortify the product, and also to act as antioxidants or colourants. Vitamins for pharmaceutical purposes are marketed to the public as diet supplements in tablet or capsule form. In the cosmetics industry, vitamins are added to skin and healthcare products.

(7) Bulk vitamins are sold in different forms according to the product and the application: crystalline, in oil, with a protective coating or in a powder matrix.

(8) The products with which this decision is concerned are those bulk synthetic substances which belong to the following groups of vitamins and closely related products: A, E, B1, B2, B5, B6, C, D3, biotin (H), folic acid (M), beta-carotene and carotinoids.

(9) Each group of vitamins includes those interrelated substances which have the same properties in their own biological field. Each has specific metabolic functions and is therefore not interchangeable with the other groups. In addition, the various group of vitamins when combined have a complementary synergistic effect.

1.2.2. THE VITAMIN MARKETS AND PRODUCTS - OVERVIEW

(10) The three largest producers of vitamins in the world are Roche, BASF and Aventis, formerly Rhône-Poulenc(4) with overall market shares of approximately [40 to 50] %, [20 to 30] % and [5 to 15] % respectively.

(11) Roche and BASF each produce a wide range of vitamins for both animal nutrition and for human usage, pharmaceutical and food.

(12) The vitamin activity of Aventis is confined to the animal feed sector for which it produces vitamins A and E and buys in for resale certain other vitamins from other producers.

(13) The total world bulk vitamins market (1999) is estimated at some EUR 3,25 billion.

(14) In volume terms, worldwide production of vitamins for animal feed, excluding choline chloride - vitamin B4, not the subject of the present procedure, is around 60000 tonnes per year; pharmaceutical/food tonnage totals around 65000 tonnes.

(15) The EEA market for the products which are the subject of the present Decision was worth around ECU 800 million, at ex-producer prices, in 1998.

(16) Vitamins A and E together comprise half the total market for vitamins. In 1998, the last full year of the cartel for these products, the vitamin E market in the Community was worth ECU 250 million; vitamin A sales aggregated some ECU 150 million.

(17) Sales of bulk vitamin C, which in 1995 had accounted for ECU 250 million in the Community, came to ECU 120 million, the price having more than halved since the ending of cartel arrangements at the end of 1995.

(18) The value of the vitamins market(5) in the Community/EEA from 1994 to 1998 was as follows:

>TABLE>

Source:

Roche market share statistics.

Table I in the Annex gives the breakdown for each vitamin product by Member State over the same period.

(19) Some 70 % of production of vitamins A and E is animal feed grade and 30 % for food pharmaceutical grade; in vitamin C, 80 % is intended for human consumption.

(20) Besides selling individual feed grade vitamins in bulk, much of this to "pre-mixers" which combine vitamins with other nutrients to form a package in powder or liquid form for use in the production of animal feed, the two major producers Roche and BASF are both forward-integrated and have their own operations producing pre-mixes, as does Rhône-Poulenc. A substantial proportion of their "feed grade" vitamin production is not sold on the "free" market but is employed internally in the manufacture of their "pre-mixes". These are blends containing other nutrients and medication besides vitamin concentrates which are added in small amounts to the main feed mixture. The remainder is sold to wholesalers, pre-mixers or directly to animal feed compounders.

(21) The vitamin producers sell the food/pharmaceutical grade product in "straight" form to intermediate customers, such as other vitamin producers, vitamin formulators who buy in concentrated form and to distributors and resellers. Vitamin producers which do not themselves produce particular vitamins may buy in their requirements from other vitamin producers.

1.2.2.1. The individual vitamin product markets

Vitamins A and E

(22) Vitamin A is a fat-soluble chemical substance with a variety of applications primarily in the feed industry. Smaller quantities of vitamin A are also sold to the food and pharmaceutical industries. Sales to the cosmetics industry are minimal. Vitamin A is necessary to ensure normal growth as well as healthy skin, eyes, teeth, gums and hair.

(23) Vitamin E is also a fat-soluble chemical substance with a variety of applications in animal and human nutrition as well as in the pharmaceutical and cosmetics industry. Vitamin E is necessary for the formation and functioning of red blood corpuscles, muscles and other tissue. Vitamin E can either be derived from natural sources or be generated as a synthetic product. There is only a very limited competitive overlap between synthetic and natural vitamin E which only occurs in human applications.

(24) The majority of synthetic vitamin E supplies is purchased by the feed industry, the remainder being consumed by the pharmaceutical and food industry as well as the cosmetics industry which has, however, only emerged as a sizeable purchaser of the product since 1996.

(25) Vitamins A and E together account for some 60 % of the worldwide demand for animal feed vitamins. Both vitamins are largely bought by the same customers, especially in the animal feed industry. The world demand for vitamin E is around 22000 tonnes annually, for vitamin A, around 15000 tonnes.

(26) Roche was the first producer to...