IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
UNITED STATES OF AMERICA,
v.
HUGO STROTMANN,
Defendant.
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Criminal No.: 3 00 CR-145R
Filed: April 6, 2000
Violation: 15 U.S.C. § 1
Judge: Jerry Buchmeyer
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INFORMATION
The United States of America, acting through its attorneys, charges:
I
DESCRIPTION OF THE OFFENSE
1. Hugo Strotmann is made a defendant on the charge stated below.
2. Beginning in part at least as early as January 1990 and continuing in part until February
1999, the exact dates being unknown to the United States, the defendant's corporate employer,
BASF AG ("BASF"), and co-conspirators entered into and participated in a combination and
conspiracy to suppress and eliminate competition by fixing the price and allocating the volume of
certain vitamins manufactured by BASF and its co-conspirators and sold by them in the United
States and elsewhere, and to allocate customers for vitamin premixes sold in the United States.
The combination and conspiracy engaged in by the defendant and co-conspirators was in
unreasonable restraint of interstate and foreign trade and commerce in violation of Section 1 of
the Sherman Act (15 U.S.C. § 1). The defendant joined and participated in the charged
conspiracy from at least as early as January 1990 until at least March 1996.
3. The charged combination and conspiracy:
- consisted of a continuing agreement, understanding, and concert of action among the
defendant and co-conspirators regarding certain vitamins manufactured by corporate conspirators
and sold by them in the United States and elsewhere, the substantial terms of which were to:
- fix, increase, and maintain prices and to coordinate price increases for the sale of such
vitamins in the United States and elsewhere;
- allocate among the corporate conspirators the volume of sales and market shares of such
vitamins in the United States and elsewhere; and
- allocate among corporate conspirators all or part of certain contracts to supply vitamin
premixes to various customers located throughout the United States and to refrain from
submitting bids, or to submit collusive, non-competitive and rigged bids, therefor;
- involved a changing group of conspirators and affected a changing group of vitamins at
various points in time during the period covered by this Information, its scope adjusting over
time to the manufacturers producing certain vitamins and participating in the combination and
conspiracy; and
- affected at least the following vitamins for the indicated time periods during the
combination and conspiracy charged in this Information:
- vitamins A and E sold in the United States and elsewhere, from January 1990 into
February 1999;
- vitamin B2 (Riboflavin) sold in the United States and elsewhere, from January 1991
into at least Fall 1995;
- vitamin B5 (CalPan) sold in the United States and elsewhere, from January 1991 into at
least December 1998;
- vitamin C sold in the United States and elsewhere, from January 1991 into at least the
late Fall 1995;
- beta carotene sold in the United States and elsewhere, from January 1991 into at least
December 1998; and
- vitamin premixes sold to customers located throughout the United States, from January
1991 into at least December 1997.
4. For the purpose of forming and carrying out the charged combination and conspiracy, the
defendant and co-conspirators did those things that they combined and
conspired to do including, among other things:
Vitamins
- participating in meetings and conversations in the United States and elsewhere to
discuss the prices and volumes of vitamins A and E, vitamin B2, vitamin B5, vitamin C, and
beta carotene sold in the United States and elsewhere;
- agreeing, during such meetings and conversations regarding such vitamins, to fix,
increase, and maintain prices at certain levels in the United States and elsewhere;
- agreeing, during such meetings and conversations regarding such vitamins, to allocate
among the corporate conspirators the approximate volume of such vitamins to be sold by them in
the United States and elsewhere;
- exchanging sales and customer information for the purpose of monitoring and enforcing
adherence to the above-described agreements;
- issuing price announcements and price quotations in accordance with the
above-described agreements;
- selling such vitamins at the agreed-upon prices and in accordance with the agreed-upon
sales volume allocations in the United States and elsewhere;
Vitamin Premixes
- participating in meetings and conversations in the United States and elsewhere to
discuss the submission of prospective bids for contracts to supply vitamin premixes to various
customers located throughout the United States;
- agreeing, during such meetings and conversations, which corporate conspirator would
be designated the low bidder for particular contracts to supply vitamin premixes to various
customers located throughout the United States;
- agreeing, during such meetings and conversations, on the prices to be submitted by the
designated low bidders for particular contracts to supply vitamin premixes to various customers
throughout the United States;
- refraining from bidding, or submitting intentionally high, complementary and
non-competitive bids, for particular contracts to supply vitamin premixes to various customers
throughout the United States; and
- selling vitamin premixes to various customers throughout the United States at rigged
and non-competitive prices.
II
BACKGROUND
5. Vitamins are organic compounds required in the diet of humans and animals for normal
growth and maintenance of life. Vitamins are essential sources of certain coenzymes necessary
for metabolism, the biochemical processes that support life. All known vitamins have been
synthesized chemically, and various such synthesized vitamins are manufactured and sold by
BASF and its corporate co- conspirators.
6. Vitamins are necessary for the normal and healthy growth and development of both
humans and animals. Large quantities of vitamins A and E, vitamin B2, vitamin B5, vitamin C,
and beta carotene are sold to customers in the human food, pharmaceutical, and animal feed
industries. Vitamin premixes are a blend of several vitamins and other products in either dry or
spray-on applications. Formulated and sold as additives, these vitamin premix applications are
used to enrich human food and animal feed products.
III
DEFENDANT AND CO-CONSPIRATORS
7. During the period covered by this Information, Reinhard Steinmetz was President of the
Fine Chemicals Division of BASF, a corporation organized and existing under the laws of
Germany, with its principal place of business in Lugwigshafen, Germany. BASF is engaged in
the manufacture and sale of vitamins and vitamin premixes in the United States and elsewhere.
8. Various corporations and individuals not made defendants herein participated as
co-conspirators in the offense charged herein and performed acts and made statements in
furtherance thereof.
9. Wherever in this Information reference is made to any act, deed, or transaction of a
corporation, the allegation means that the corporation engaged in the act, deed, or transaction by
or through its officers, directors, agents, employees, or representatives while they were actively
engaged in the management, direction, control, or transaction of its business or affairs.
IV
TRADE AND COMMERCE
10. During the period covered by this Information, the defendant and co-conspirators
sold and distributed a substantial quantity of vitamins and vitamin premixes subject to the
charged conspiracy in a continuous and uninterrupted flow of interstate and foreign trade and
commerce to customers located in states or countries other than the states or countries in which
the vitamins and vitamin premixes were produced.
11. During the period covered by this Information, the activities of the defendant and
co-conspirators that are the subject of this Information were within the flow of, and substantially
affected, interstate and foreign trade and commerce.
V
JURISDICTION AND VENUE
12. The combination and conspiracy charged in this Information was carried out, in
part, within the Northern District of Texas within the five years preceding the filing of this
Information.
ALL IN VIOLATION OF TITLE 15, UNITED STATES CODE, SECTION 1.
_______________/s/________________
JOEL I. KLEIN
Assistant Attorney General
_______________/s/________________
JAMES M. GRIFFIN
Deputy Assistant Attorney General
_______________/s/________________
SCOTT D. HAMMOND
Director of Criminal Enforcement
Antitrust Division
U.S. Department of Justice
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_______________/s/________________
ALAN A. PASON
Chief, Dallas Office
_______________/s/________________
GREGORY S. GLOFF
MITCHELL R. CHITWOOD
Attorneys
Antitrust Division
U.S. Department of Justice
Dallas Field Office
Thanksgiving Tower
1601 Elm Street, Suite 4950
Dallas, Texas 75201-4717
Tel.: (214) 880-9401
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