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U.S. Court Fines Chinese Vitamin C Makers

March 15, 2013 by Leave a Comment

SHANGHAI — A group of Chinese vitamin C makers was ordered by a U.S. District Court to pay $162.3 million in fines after a jury found the companies guilty of engaging in price-fixing.

A jury in Brooklyn, New York, returned the verdict Thursday after a group of American companies accused the Chinese producers of acting in concert to raise prices in violation of U.S. antitrust laws.

The case is significant because China produces about 80 percent of the world’s supply of ascorbic acid, or vitamin C, which is a key ingredient in items like food and soft drinks to animal feed, vitamin supplements and even cosmetics.

The Chinese-made vitamins end up as ingredients in products made by major brands like Coca-Cola.

The case was striking because of the unusual defense that the Chinese companies mounted. While admitting in court that they had colluded on setting prices, lawyers representing the Chinese companies said they were compelled to do so by the Chinese government.

In court papers, China’s Ministry of Commerce supported the Chinese companies’ argument.

But lawyers who brought the class-action suit against the Chinese companies said the companies acted on their own and not on government orders.

The jury agreed and voted in favor of a $54 million judgement against four Chinese companies. The U.S. District Court judge in the case trebled the damages, as required by U.S. antitrust law.

Two other Chinese companies involved in the case agreed to pay about $32 million to settle the case. One company settled shortly before the trial began and another settled during the proceedings.

William Isaacson, an attorney for the plaintiffs at Boies, Schiller and Flexner, said the fines would change the way Chinese companies do business in the United States.

“Chinese companies selling products in the U.S. are going to be treated the same as other companies,” Mr. Isaacson said. “There’s a history of cartel prosecutions in the U.S., European cartels, Japanese cartels, Korean cartels. This is the first one against Chinese companies.”

The verdict marks the second time in two decades that vitamin makers have been accused of violating antitrust laws. In 1999, The U.S. Justice Department broke up a “vitamin cartel” that had been led by European companies, including the Swiss pharmaceutical giant Roche and BASF of Germany. The companies had overcharged big food and beverage makers like Kellogg, Coca-Cola and Nestle. Eventually the makers of bulk vitamins agreed to pay more than $1.5 billion to settle the allegations.

Soon after, experts say, the Chinese gained a dominant share in the global vitamin C market, and after several big European producers exited the business, the Chinese companies began raising prices.

By 2001, the Chinese companies were acting like a cartel and fixing the price of vitamin C, according to the American lawyers representing buyers of vitamin C in the New York case.

Lawyers representing the Chinese companies could not be reached early Friday. And one of the Chinese companies involved in the case, Hebei Welcome Pharmaceutical, said by telephone Friday that it did not yet have a statement to release.

Article source: http://www.nytimes.com/2013/03/16/business/global/us-fines-chinese-vitamin-c-makers.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Nanoparticles in Food Raise Concern by Advocacy Group

February 6, 2013 by Leave a Comment

Nanomaterials, substances broken down by technology into molecule-size particles, are starting to enter the food chain through well-known food products and their packaging, but there is little acknowledgment by the companies using them, according to a new report from a nonprofit group that works to enhance corporate accountability.

Some companies may not even know whether nanomaterials are present in their products, the corporate accountability group As You Sow said.

Only 26 out of 2,500 companies, including PepsiCo, Whole Foods and the corporate parent of Pizza Hut and Taco Bell, responded to a survey from As You Sow about their use of nanomaterials.

“Only 14 said they don’t use nanomaterials, and of those only two had any policies on the use of nanomaterials,” said Andy Behar, chief executive of As You Sow. Various food companies have said they are interested in nanotechnology, which can help make products creamier without additional fat, intensify and improve flavors and brighten colors.

Their small size allows nanoparticles to go places in the body where larger particles cannot and enter cells. They have been found in the blood stream after ingestion and inhalation, and while research on their health effects is limited, studies have shown them to have deleterious effects on mice and cells.

“We’re not taking a no nano position,” Mr. Behar said. “We’re saying just show it’s safe before you put these things into food or food packaging.”

He noted that the European Union requires labeling of foods containing nanomaterials and that the European Food Safety Authority has published guidance for assessing nanomaterials in food and animal feed.

Last April, the Food and Drug Administration issued an unusually emphatic statement on nanomaterials, saying it did not have enough data to determine the safety of nanomaterials in food.

The Environmental Protection Agency is evaluating various nanoparticles used in consumer products, like sunscreens.

As You Sow tested 10 varieties of powdered doughnuts for the presence of nanoparticles. With the help of an independent lab, it found that Hostess Donettes and Dunkin’ Donuts Powdered Cake Donuts tested positive for the presence of titanium dioxide materials of less than 10 nanometers. Titanium dioxide is used to brighten white substances. The nano variety is under investigation by the E.P.A.

Michelle King, a spokeswoman for Dunkin’ Donuts, said the company was working with its supplier to validate As You Sow’s findings. Hostess Brands went out of business during the test and closed its factories.

Article source: http://www.nytimes.com/2013/02/06/business/nanoparticles-in-food-raise-concern-by-advocacy-group.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

The Texas Tribune: U.T. Making a Big Bet on the Future of Algae

October 2, 2011 by Leave a Comment

For decades, scientists have been trying to find ways to mass-produce algae as a viable source of fuel for vehicles. High costs and environmental factors have created insurmountable roadblocks. Now, researchers hope, a new facility at the University of Texas will help them move closer to that goal.

“You need three things to grow algae: carbon dioxide, dirty water and sunshine,” said Michael E. Webber, an assistant professor in the U.T. department of mechanical engineering. “Texas has abundant supplies of all three.”

The university opened the shadehouse at the J. J. Pickle Research Campus three weeks ago with the objective of mass-producing algae for use as biofuel and other byproducts. AlgEternal Technologies, a company based in Austin, whose chief executive is Representative Rob Eissler, Republican of The Woodlands, collaborated with the UTEX Culture Collection of Algae — one of the largest such collections in the world — to develop the technology to grow the organisms for the project.

Another Texas company, OpenAlgae, works with the Center for Electromechanics at U.T. to extract oil from the organisms in a cost-effective manner.

Algae can be used to make products other than biofuel, including animal feed, food supplements and pharmaceuticals, said Jerry J. Brand, the Jack S. Josey professor in energy studies and the director of the UTEX Culture Collection of Algae.

Michael Jochum, AlgEternal’s chief scientist, said one potential key to successfully growing large quantities of algae for commercial use was the project’s Vertical Growth Module — those giant tubes. The algae grow in a closed system that uses the sun as its main source of energy and reduces production costs and the chances of predators or diseases attacking the algae. Growing the cultures vertically also means scientists can produce a lot of algae in a relatively small area.

“Algae has typically been grown horizontally in open ponds, where limiting factors like poor sunlight and contamination from outside organisms have prevented large-scale algae production,” Mr. Jochum said.

The UTEX Culture Collection of Algae works with AlgEternal to decide which kinds of culture should be grown and under what conditions, Mr. Brand said.

“They have the potential to play a role in reducing greenhouse gases and decreasing our dependence on crude oil,” he said. “Algae can grow much faster than plants. They don’t require as much water, and they can grow in places that plants can’t, like deserts.”

That is especially important for Texas because of the severe drought gripping the state.

Beyond the central problem of figuring out how to grow large amounts of algae economically, Mr. Brand said, is the complexity of working with vast amounts of the organisms. “As you scale up,” he said, “more unexpected problems arise.”

llapin@texastribune.org

Article source: http://feeds.nytimes.com/click.phdo?i=345b826e8a09a6c14b4ee126bfc86384

Filed Under: Business News Tagged With: , ,