Animal feed fine
9 Dec 2004
The European Commission has decided to impose fines totalling 66.34 million Euros on Akzo Nobel, BASF and UCB for operating a cartel in the market for choline chloride.
Akzo Nobel was fined 20.99 million Euros while BASF was hit with a somewhat larger 34.97 million Euro sum. UCB was fined 10.38 million Euros.
Choline chloride, also known as vitamin B4, is used mainly as a feed additive for poultry and pigs, to increase growth, reduce mortality and improve meat quality. Clients are animal feed producers, which in turn supply to European farmers.
After a careful investigation, triggered by information brought to the knowledge of the Commission in the framework of its leniency programme, the Commission concluded that Akzo Nobel of the Netherlands, BASF of Germany UCB of Belgium and Bioproducts and DuCoa of the USA, Chinook of Canada, colluded in secret to set prices and share markets for choline chloride in the European Economic Area (EEA) in violation of EC Treaty rules.
Together the companies involved controlled around 80% of the world market and of the EEA market for choline chloride. In 1997, the last full year of the infringement, the world market for choline chloride was worth around 180 million Euros and that of the EEA market over 50 million Euros.
From 1992 to April 1994, the main North American and European producers of choline chloride met in secret to increase worldwide prices, allocate world markets and control competitors.
The North American producers agreed to withdraw from Europe, in exchange for the European producers withdrawing from North America. Between March 1994 and October 1998, the European producers continued to meet and agreed prices and price increases for specific national markets in the EEA, allocated individual clients among themselves and agreed EEA-wide market shares.
As the North American companies ended their participation in the infringement in April 1994, they escaped fines, given that the first investigative action of the Commission took place more than five years later.
