The Great Global Vitamins Conspiracies, 1985-1999

Abstract

This paper is a comprehensive examination of the global bulk vitamins cartels of the 1990s. In terms of its precision and breadth of coverage, the quantitative information now available on vitamins surpasses that of almost any other modern cartel. For example, the internal records of the major defendants have yielded monthly transaction prices for 53 bulk vitamin products over periods of up to 22 years.

Evidence is presented that these 16 interrelated cartels were the largest discovered international price-fixing schemes of the late 20th century in terms of affected commerce and direct overcharges. On the other hand, the percentage increases in bulk vitamin prices wrought by the cartels were merely average. The formation of the cartels by and large occurred in markets that were in terms of their structures and historical modes of behavior ideally suited for overt collusion. Although organizationally similar in many respects, the cartels also displayed a wondrous variety of collusive conducts. Only four to six of the cartels died natural deaths.

There is little question that the convicted members of the vitamins cartels were in absolute monetary terms the most heavily sanctioned defendants in the history of antitrust law. Yet, it is equally non-controvertible that the impressive corporate monetary sanctions imposed worldwide were inadequate to deter recidivism.

Keywords: Cartel, collusion, price fixing, antitrust, optimal deterrence, chemicals

JEL Classification: L41, L44, L65, L11, L13, N60, K21, K14