OTTAWA – The Competition Bureau announced today that a Japanese corporation and one of its senior executives have been convicted of an international price fixing and market sharing conspiracy which affected prices over a 17-year period.
The conspiracy involved sorbic acid and potassium sorbate (known together as “sorbates”). Sorbates are chemical preservatives used primarily as mold inhibitors in high-moisture and
high-sugar foods such as cheese and other dairy products, bakery products, and other processed foods.
Daicel Chemical Industries, Ltd. pleaded guilty in the Canadian Federal Court Trial Division and was fined $2.46 million. In addition to this fine, the Court imposed a Prohibition Order prohibiting this company from committing or repeating this offence in Canada.
Daicel’s former Director of Organic Chemicals pleaded guilty in the Ontario Superior Court and was convicted for his role in the conspiracy, which operated from 1979 until 1996. The Court
fined him $250,000 for his part in the conspiracy, taking into consideration his senior position and his personal role in the conspiracy.
“We will not permit these international cartels to harm Canadian competition and we will continue to stamp out this type of behaviour,” said Harry Chandler, Deputy Commissioner of Competition. “The conviction of the individual in this case sends a strong warning to executives everywhere; individuals involved in these kinds of cartels face serious risk of prosecution in Canada.”
Total sales of sorbates in Canada during the period of the offence were approximately $37 million, with Daicel’s sales at approximately $8 million.
Daicel is the third company to be convicted in the sorbates industry and the inquiry is ongoing. On October 26, 1998 Hoechst AG of Germany was convicted of price fixing and volume allocation and Eastman Chemical Company, of the United States, was convicted for price fixing in the same conspiracy.
Certified copies of the filed documents before the Federal Court and the Ontario Superior Court in Toronto may be obtained from the Court Registries – (Court File numbers T-1686-00 and F-264-2000).
The Competition Bureau is an independent law enforcement agency whose
mandate is to maintain and encourage fair competition in Canada.
