VITAMIN C PRODUCERS IN CHINA TO APPEAL VERDICT AGAINT THEM FOR PRICE FIXING

photo: theepochtimes

Most consumers of Vitamin C are not aware that almost all production of vitamin C, whether in supplement, as a component of food or other delivery method is produced in China.  

The Chinese sector ability's to corner the worldwide market of vitamin C has been scrutinized in recent years, due to the fact, that almost all supply comes from China and that after eliminating almost all competition, they are now suspected of price fixing the commodity.

A federal court in New York has in fact found two Chinese companies that produce vitamin C, liable for price fixing in the United States.  The court levied a fine of 162 million dollars against the two companies.  The companies are now appealing the verdict.  

Seven jurors in New York took less than a day to return a guilty verdict in the federal case.  The fines were levied against Hebei Welcome pharmaceuticals and North China Pharmaceutical, a subsidiary of Hebei.   

The initial suit for was for damages caused by price fixing to the US plaintiffs, but federal law allows treble damages to be awarded, i.e., three times the actual amount of the damages sought.  

This is the first fine ever levied against a Chinese company. 

Two other Defendants in the case settled out of court, China pharmaceuticals group and Weisheng Pharmaceutical Co., for 22.5 million dollars.  

The defendants' statement affirmed that the companies had been forced to jack up prices under orders of the China Ministry of Commerce, but was not well received by the jury as a valid defence.  However, in an unprecedented move, the China Ministry of Commerce did file an amicus brief that said that the fine would 'improperly penalize' the vitamin companies, ...and would adversely affect implementation of China's trade policy."

The trial however, is not over by any means. Since the beginning motion, more plaintiffs have added themselves, almost 150 separate companies to the ongoing procedure, mostly in the food and beverage sector who use the vitamin C as supplements to their products.   Chinese firms however, do dominate the 500 million dollar US vitamin C market.

In fact the price of vitamin C has gone from 2.50 dollars in 2001 to 15 dollars a kg in 2003. 

The defence presented evidence that the industries were in fact required by Chinese law to adhere to agreed-on limits on price and output of the exports.  If they didn't comply, their export licenses would have been revoked.  

Source: China Daily 3.20.13