EU court throws out sodium gluconate cartel appeal

By Anthony Fletcher

- Last updated on GMT

Related tags: Roquette, E number

The European Court of First Instance has dismissed an appeal
against the EC's decision in October 2001 to fine a global sodium
gluconate cartel.

The court confirmed that the parties involved had indeed engaged in illegal price fixing.

Fines imposed on Akzo Nobel, Archer Daniels Midland (ADM) and AVEBE were upheld, though the fine imposed on French firm Roquette was reduced.

The decision follows confirmation that fines imposed on Jungbunzlauer (JBL) and ADM for their part in an illegal citric acid price fixing cartel would also be upheld. Citric acid is the most widely used acidulant and preservative in the world, and is used in numerous food and drink applications, including as a food fortifier of sodium.

The Commission fined five producers of citric acid a total of €135.22 million for participating in what it claims was a secret worldwide cartel between 1991 and 1995.

Similarly, the Commission fined six producers of sodium gluconate a total of €57.53 million for participating in a secret worldwide cartel between 1987 and 1995. Sodium gluconate is used as an additive in food and in various chemical applications.

Akzo was fined a total of €9 million, ADM €10.13 million, Roquette €10.8 million, AVEBE €3.6 million and Fujisawa Pharmaceutical €3.6 million.

The decision against Jungbunzlauer was withdrawn on 19 March 2002 a new decision against Jungbunzlauer was adopted on 29 September 2004. Jungbunzlauer appealed this decision and this case is still pending before the CFI. Fujisawa did not challenge the Commission's decision of 2001.

However, Akzo brought an action against the commission before the Court of First Instance on 19 December 2001. It claimed that the court should annul the decision because of the commission's wrong assessment of the limited size of the product market, its liability and the multiplication factor for the fine.

Similarly, Roquette brought an action on 20 December 2001 claiming that the commission failed adequately to assess either the seriousness or the duration of the breach. It also claimed that the commission misapplied its guidelines for calculating fines, and calculated wrongly the duration of the cartel.

ADM brought an action on 21 December 2001 applying the same arguments as Roquette, and AVEBE brought an action 17 December 2001 claiming that it was not liable for the behaviour of its joint venture Glucona because its partner Akzo was responsible for sales policy. AVEBE said it was not aware of the cartel until 1993, when the applicant obtained total control over Glucona.

The Court of First Instance rejected all these claims, though it did reduce the fine imposed on Roquette. It was decided that the Commission had not established that one of the products made by Roquette was included in the cartel.

In the period 1987-1995, virtually all sodium gluconate produced worldwide was in the hands of Fujisawa, Glucona (a 50/50 joint-venture between Akzo and Avebe), Jungbunzlauer and Roquette. After it entered the market in 1990, ADM also became a significant player, until it its withdrawal in the course of 1995.

The Court ruled that from 1987 until June 1995, the above companies held regular meetings, where they agreed on individual sales quotas, fixed 'minimum' and 'target' prices and shared out specific customers.

Related topics: Preservatives and acidulants

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