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CNN World Report

Canadian Consumer Group Demands Compensation From World's Biggest Vitamin Producers

Aired May 06, 2001 - 14:13   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
SHIHAB RATTANSI, CNN ANCHOR: A Canadian consumer group is demanding compensation from some of the world's biggest vitamin producers. Two years ago, vitamin manufacturers pleaded guilty to a price fixing scam. They tried to control the market for common vitamin additives found in products like cereal and bread. But now consumers say they were affected too, and it is time to pay up. More now from CBC.

(BEGIN VIDEOTAPE)

ERICA JOHNSON, CBC REPORTER (voice-over): It angers Montreal High School teacher, Andre Bernard Gavant (ph). It is a price fixing scam that Gavant says cost him in the kitchen.

UNIDENTIFIED MALE: I pay more because of the artificially inflated prices.

JOHNSON: For almost 10 years, some of the world's most powerful companies secretly orchestrated a price fixing conspiracy, jacked up the price of vitamins in hundreds of products.

UNIDENTIFIED MALE: They took money out of my pocket without my consent by acting illegally.

JOHNSON (on camera): In fact, millions of Canadians may have been paying more for hundreds of products: Things like cereal, milk, bread, any product with a vitamin additive. Five of the world's largest vitamin producers have pleaded guilty to price fixing, and smaller players have fessed up too. Now Canada's largest consumer group wants compensation.

(voice-over): Gavant has taken his concerns to Action Consommateur, a Quebec consumer group, which has launched a class- action, and thinks Canadians deserve a chunk of the price fixer's profit.

ERIC DAVID, LAWYER FOR OPTION CONSUMMATEURS: The illegal profits the these companies made came out of the pockets of consumers, every single consumer in Canada. And they have to be compensated because a wrong was committed.

JOHNSON: Here's how it worked. Between 1990 and 1999, some of the world's biggest and most profitable companies, F. Hoffmann-La Roche of Switzerland, BASF of Germany, Rhone-Poulenc of France, and two Japanese corporations, Eisai Company Limited and Daiichi Pharmaceutical secretly met in hotels and homes around the world.

Instead of competing for your business, trying to offer the best possible price, they agreed on how much of each product they would sell and at what price. Over the years the vitamin companies saw sales of over $700 million in Canada.

Consumer activists figure every person in Canada is owed about $5, and they want that money to fund market watch dogs, like consumer groups. But a lawyer for one of the vitamin companies named in Quebec's class-action says there is no proof that the middle men, cereal companies, bakers and others, passed their increased costs on to consumers.

SYLVIE RODRIGUE, DEFENSE LAWYER: They have to prove their case, and right now we are confidant that the damages issue is a good argument, that there was no damage to the consumer.

DAVID: No one is going to make me believe that the middle were assuming all of these extra costs over that period of time because they are there to make profits as well, and they could not have survived if they were not passing on these costs to the consumers.

JOHNSON: Meanwhile, class actions are also underway in Ontario and B.C. They're taking comfort in a recent U.S. settlement. The biggest companies involved in the vitamin scheme have agreed to compensate consumers and small businesses in 22 states, for more than $300 million.

Erica Johnson, CBC News, Vancouver.

(END VIDEOTAPE)

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