Competition Bureau Investigation in International Price Fixing Conspiracy Leads to $100,000 Fine

OTTAWA, December 18, 2002 — The Competition Bureau's international investigation in the food preservatives industry has concluded with the conviction of Japan-based Nippon Gohsei Industries, Ltd. (Nippon) who pleaded guilty to charges of price fixing and market sharing in Federal Court. The company was sentenced to pay a $100,000 fine for its part in the conspiracy.

"I am pleased to see the successful conclusion of such a large international investigation into companies and individuals who engaged in price fixing and market sharing conspiracies," said Richard Taylor, Deputy Commissioner of Competition. "The numerous convictions obtained in this international conspiracy case send a strong message that the Competition Bureau will not hesitate to thoroughly investigate and prosecute this type of anti-competitive behaviour."

The Bureau's investigation, which started in 1998, revealed that Nippon was involved in a conspiracy to fix prices for sorbic acid and potassium sorbate, otherwise known as sorbates. Sorbates are primarily used as mold inhibitors in foods such as dairy products, bakery products, flavours and spices, syrups and other processed foods commonly sold in grocery stores.

Nippon is the fifth international company to be convicted of such offences in Canada over the last three years. Ueno Fine Chemicals, of Japan, Daicel Chemical Industries, Ltd., of Japan, Hoechst AG, of Germany, and Eastman Chemical Company, of the United States were all previously convicted of price fixing and volume allocation. Former senior executives of some of these companies were also convicted for their role in the same conspiracy. The fines levied from these convictions totalled $7.49 million.

The Competition Bureau is an independent law enforcement agency that promotes and maintains fair competition so that all Canadians can benefit from competitive prices, product choice and quality service. It oversees the application of the Competition Act, the Consumer Packaging and Labelling Act, the Textile Labelling Act and the Precious Metals Marking Act.

Indictment
Agreed Statement of Facts
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