October 11, 2007

Antitrust agency searches Bayer for illegal price-fixing of aspirin

BERLIN: German antitrust officials searched the offices of Bayer AG on Thursday, saying the drugmaker was under suspicion for illegal price-fixing of aspirin.
A spokeswoman for the antitrust agency said Bayer Vital, a subsidiary of the Levenkusen-based company, was under suspicion of having fixed prices at pharmacies in Germany to keep the retail price of the painkiller artificially inflated.
"According to national and European competition law it is illegal for manufacturers to control the sales price of the merchants and it can be punished with fines," said Silke Kaul, a spokeswoman for the antitrust agency.
German news magazine Stern first reported Wednesday that Bayer was under suspicion of having fixed prices with more than 11,000 pharmacies in Germany.
Bayer allegedly offered to sell the painkiller to pharmacies at a discount of up to 3 percent if they agreed to market the drug for a sale discount of no more than 20 percent, for up to four weeks.
A spokesman for Bayer said Thursday that the company did not tolerate price-fixing and supported the antitrust agency's investigation.
"We are working with the agency," Hartmut Alsfasser said. "Whatever they need from us, they will get."
An EU competition spokesman in Brussels said that the European Commission was not participating in the investigation.
"To the best of my knowledge, we are not involved" in this probe, Jonathan Todd told Dow Jones Newswires.
Founded in 1863, Bayer invented aspirin in 1897 and has since gone on to make everything from vitamins to agricultural chemicals. Among its best-known products are Alka-Seltzer and One-A-Day vitamins. Bayer Vital is in charge of prescription-free drugs.

Recent cartels involving Bayer:
EU Commission fines four firms €75.86 million for rubber chemical cartel
Former Top Bayer Executives Indicted in Price-Fixing Conspiracy
Bayer AG Agrees to Plead Guilty and Pay $66 Million Fine for Rubber Cartel

Aspirin maker Bayer denies alleged price fixing

Please also see the charge brought against BAYER by CBG (German)

Press Release, June 2, 2006

BAYER charged with cartel offences:

”Those responsible should be behind bars”

The Coalition Against BAYER Dangers (CBG) has filed charges against the Board Chairman of the BAYER corporation, Werner Wenning, with the Cologne Public Prosecutor. The association accuses the manager of tolerating or orchestrating the participation of the company in illegal price-fixing.

During the last few years BAYER has been convicted in a multitude of cases involving cartel offences. In the last financial year alone, the company had to pay EUR 275 million in fines. “We are talking about sums of several hundreds of millions in these cartel arrangements. It is unthinkable that decisions of this magnitude were taken without the knowledge of the Chairman. Only when the responsible directors fear custodial sentences can a deterrent effect be assumed”, according to Philipp Mimkes from CBG. The Coalition Against BAYER Dangers believes that the majority of illegal price fixing remains undiscovered. “It is consumers and taxpayers who pay the bill”, continues Mimkes. “It is unacceptable that those responsible for fraud worth millions are not criminally prosecuted”.

Eberhard Reinecke, CBG`s lawyer: “The great extent of such cartel arrangements and the precautions taken with the accounting prove that there is a systematic business policy at work here. The Chairman of Bayer AG is therefore guilty of embezzlement.”

On the political level there have recently been efforts to bring those responsible in the company to justice. The EU Competition Commissioner Neelie Kroes assesses private lawsuits against cartels as a central means of fighting illegal price-fixing. After imposing a EUR 58 million fine on BAYER Kroes stated that “cartels are a scourge. I will ensure that cartels will continue to be tracked down, prosecuted and punished. With this latest decision, I am sending a very strong message to company boards that cartels will not be tolerated, and to shareholders that they should look carefully at how their companies are being run.”