2003/674/EC: Commission decision of 2 July 2002 relating to a proceeding pursuant to Article 81 of the EC Treaty and Article 53 of the EEA Agreement (Case C.37.519 — Methionine) (Text with EEA relevance.)(notified under document number C(2002) 2276)

• Celex Number: 32003D0674
• Coming into Force: 08 October 2003
• End of Effective Date: 31 December 9999
• ELI: http://data.europa.eu/eli/dec/2003/674/oj
• Published date: 08 October 2003
• Date: 02 July 2002
• Official Gazette Publication: Gazzetta ufficiale dell’Unione europea, L 255, 08 ottobre 2003,Diario Oficial de la Unión Europea, L 255, 08 de octubre de 2003,Journal officiel de l’Union européenne, L 255, 08 octobre 2003

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2003/674/EC: Commission decision of 2 July 2002 relating to a proceeding pursuant to Article 81 of the EC Treaty and Article 53 of the EEA Agreement (Case C.37.519 — Methionine) (Text with EEA relevance.)(notified under document number C(2002) 2276)

Official Journal L 255 , 08/10/2003 P. 0001 - 0032

Commission decision

of 2 July 2002

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

(Case C.37.519 - Methionine)

(notified under document number C(2002) 2276)

(Only the English and German texts are authentic)

(Text with EEA relevance)

(2003/674/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 1/2003(2), and in particular Articles 3 and 15 thereof,

Having regard to the Commission decisions of 1 October 2001 and 17 December 2001 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 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),

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

Having regard to the report of the hearing officer in this case(4),

Whereas:

PART I - FACTS

A. SUMMARY OF THE INFRINGEMENT

(1) This Decision is addressed to the following undertakings:

- Aventis SA,

- Aventis Animal Nutrition SA,

- Nippon Soda Company Ltd,

- Degussa AG.

(2) The infringement consists of the participation of the abovementioned producers of methionine in a continuing agreement and/or concerted action contrary to Article 81(1) of the EC Treaty and Article 53 of the EEA Agreement covering the whole of the EEA, by which they agreed on price targets for the product, agreed on and implemented a mechanism for implementing price increases, exchanged information on sales volumes and market shares and monitored and enforced their agreements.

(3) The undertakings participated in the infringement from February 1986 until February 1999.

B. THE METHIONINE INDUSTRY

1. THE PRODUCT

(4) Methionine is one of the most important amino acids. Amino acids are organic molecules which form proteins, one of the basic components of food and feed. There are over 20 amino acids involved in building protein. Those amino acids which cannot be produced naturally in the body have to be added to feed; they are known as "essential amino acids", of which methionine, a sulphur-containing amino acid, is one type. Unless all the essential amino acids are present in the diet, the synthesis of protein by the living organism stops. The first amino acid, absence of which interrupts protein synthesis of the other amino acids, is called the "first limiting amino acid". Methionine is the first limiting amino acid for poultry. If the natural methionine content of poultry feed is low, it has to be augmented with supplements.

(5) Methionine is added to compound animal feeds and premixes for all animal species. The principal application is in poultry feed but methionine is also increasingly being added to pig feed and speciality animal feeds.

(6) Methionine is presented in two principal forms: DL-Methionine (DLM) and methionine hydroxy analogue (MHA).

(7) DL-Methionine is a white crystallised form with virtually 100 % active content.

(8) Methionine hydroxy analogue is produced in liquid form by Novus (the successor of the US producer Monsanto) with a nominal 88 % activity content. Liquid methionine was introduced by Monsanto in the 1980s, and now accounts for around 50 % of world methionine consumption.

(9) The relative bio-efficiency of the two rival forms has been the subject of long-running debate between the producers. Though both forms are used for the same purpose and derived from the same raw materials, they are produced in different ways.

2. THE PRODUCERS

RHÔNE-POULENC (NOW AVENTIS SA)

(10) Rhône-Poulenc, whose corporate headquarters were in Courbevoie, France, was at all material times an international company involved in the research, development, production and marketing of organic and inorganic intermediate chemicals, speciality chemicals, fibres, plastics, pharmaceuticals and agricultural chemicals.

(11) Its three core businesses were pharmaceuticals, plant and animal health and speciality chemicals.

(12) In 1998 the Rhône-Poulenc group's business totalled FRF 86,8 billion (ECU 13,15 billion).

(13) On 1 December 1998 Rhône-Poulenc and Hoechst AG announced their decision to merge their life sciences activities in a new entity "Aventis" (to be owned 50:50 by the two parent companies) and to shed their chemical operations over a three-year period. The next step was to be the complete fusion of the two parent companies.

(14) An accelerated programme for the merger project was announced in May 1999, subject to regulatory and other approvals.

(15) On 9 August 1999 the Commission decided under Article 6(1)(b) of Council Regulation (EEC) No 4064/89 of 21 December 1989 on the control of concentrations between undertakings(5) not to oppose the merger and to declare it compatible with the common market(6).

(16) On 15 December 1999 the completion of the merger was announced. Aventis is led by a four-member management board and an executive committee comprising the four board members and another five senior executives. The new group is divided into two business areas: Aventis Pharma and Aventis Agriculture. Aventis Agriculture comprises the crop science, plant biotechnology, animal nutrition and animal health businesses. The chief executive officer of Aventis Agriculture, who was formerly president of Rhône-Poulenc's plant and animal health business sector, is also a member of the executive committee of Aventis. Aventis has its company headquarters in Strasbourg.

(17) The proforma group sales of the new entity for 2000 were EUR 22,30 billion.

(18) The company of the Rhône-Poulenc group responsible for methionine at the material time was Rhône-Poulenc Animal Nutrition ("RPAN"). RPAN was a wholly-owned subsidiary of Rhône-Poulenc (100 %) which produced and marketed nutritional additives, including vitamins and aminoacids, for use in animal foodstuffs (poultry, pigs and ruminants). It is now known as Aventis Animal Nutrition SA ("AAN"). RPAN was directly attached to the Plant and Animal Health Division of Rhône-Poulenc SA and answered to it accordingly (100 %). Both Aventis SA and AAN are addressees of this Decision.

(19) AAN/RPAN has its international headquarters in Antony, near Paris. It also has regional sales headquarters for Africa (based in France), North America, South America and the Asia-Pacific region.

(20) Functionally, RPAN was part of Rhône-Poulenc's Plant and Animal Health Business Sector.

(21) AAN/RPAN's main feed additive products are vitamins A and E (used in poultry and pig feed) and methionine.

(22) Rhône-Poulenc makes both DL-methionine and MHA, although the bulk of its production is in powder form. It produces dry DL-methionine at two plants in France and a third in Brazil; its facilities in Spain and in the USA make the liquid form.

(23) Rhône-Poulenc's worldwide sales of nutritional feed additives in 1998 amounted to some ECU [ ](7) million, giving it a [ ]* share of the global market. In the Community, sales of some ECU [ ]* million gave it a [ ]* share of the market.

(24) In 1998 Rhône-Poulenc reported worldwide sales of in methionine of some ECU [ ]* million, down from ECU 311 million the previous year.

DEGUSSA AG

(25) Degussa AG of Düsseldorf came into being in 2000 when SKW Trostberg and Degussa-Hüls merged in follow-up to the merger between their respective parent companies VIAG and VEBA to form E.ON. Degussa-Hüls itself was formed in 1998 by the merger of two leading German chemical companies, Degussa AG of Frankfurt and Hüls AG of Marl.

(26) Proforma sales in 2000 of the two merging entities amounted to some EUR [ ]* billion.

(27) The new group comprises six divisions corresponding to the speciality chemicals activities of the new Degussa: Health and Nutrition, Construction Chemicals, Fine and Industrial Chemicals, Coatings and Advanced Fillers, Speciality Polymers and Performance Chemicals.

(28) Prior to the merger, animal feedstuff business was conducted by Degussa-Hüls. Before the merger with Hüls AG of Marl in 1998, the animal feedstuff business was directly conducted by Degussa AG of Frankfurt.

(29) Degussa is the only single-source supplier of the three most important essential amino acids: methionine, lysine and threonine.

(30) Degussa produces (dry) DL-methionine only.

NIPPON SODA COMPANY LIMITED

(31) Nippon Soda of Tokyo is a large global business enterprise active in the manufacture of pesticides, agricultural chemicals, feed additives, pharmaceutical compounds and sodium and potassium compounds.

(32) Together with Mitsui it owns Novus International, the US producer of MHA (Nippon Soda is [ ]*).

(33) Nippon Soda Company's turnover for the financial year ending March 2000 totalled [ ]*.

(34) Nippon Soda does not manufacture methionine in Europe. It produces powdered methionine (DLM) in Japan; [ ]* of its production is sold in Asia and [ ]* in the EEA (via Mitsui).

(35) The DLM manufactured by Nippon Soda in Japan for sale in the EEA - and indeed the rest of the world - is first sold in Japan to Mitsui, which is not itself a manufacturer of the product. Mitsui is responsible for distribution and marketing in Europe and supplies through its European subsidiary.

OTHER PRODUCERS

1. Sumitomo

(36) Sumitomo...