Hoffman-LaRoche Ltd and BASF (EUROPEAN) MAKERS
OF VITAMINS FINED MILLIONS BY U.S.
(May 1999)

WASHINGTON Every year around August or September, the senior
executives from the world's largest producers of vitamins would gather
clandestinely for a few days at a European hotel or an executive's home for
what some called the ``top-notch meeting'' and others the ``summit
conference'' to plan ``the budget for Vitamin Inc,'' federal prosecutors said
Thursday.

They said the meeting set production quotas, prices and distribution for
vitamin ingredients that were used to enrich products in every refrigerator
and kitchen cabinet in America, from morning supplemental pills to enriched
milk and orange juice, fortified breakfast cereals, breads, butters and meats.
The global market for such vitamins as A, B2 (riboflavin), B5, C, E and Beta
Carotene would be divided among the participants to the half-percentage
point, the prosecutors said.

A few months later, according to the officials, the budget would be reviewed
by mid-level executives to determine whether everything was working as
planned, or whether the details should be adjusted to reflect corporate
profits and world-wide demand.

Attorney General Janet Reno and her aides Thursday described in detail a
decade-long vitamin cartel that they said had been shattered in one of the
largest criminal prosecutions ever made by the Justice Department. In a
federal court in Dallas, F. Hoffman-LaRoche Ltd., the Swiss pharmaceutical
giant, pleaded guilty to one criminal count of violating the Sherman Antitrust
Act and agreed to pay a $500 million penalty, the largest criminal fine ever
imposed by the Justice Department. A second company, BASF of
Germany, has agreed to pay a $250 million fine for its role in the conspiracy.

At a news conference here to announce the initial results of the investigation,
Reno and other senior officials described a global conspiracy to fix prices.
They said one Swiss executive had agreed to return to the United States to
serve a jail sentence _ he was not the highest ranking official involved in the
price-fixing scheme _ and that at least seven other executives and a dozen
smaller companies remained under investigation.