Bayer Unit to Plead Guilty to Price-Fixing

WASHINGTON — A U.S. subsidiary of the German pharmaceutical and chemical giant Bayer agreed Wednesday to plead guilty to fixing the price of a key food additive and to pay a $50-million fine.

Haarmann & Reimer Corp., the Springfield, N.J.-based subsidiary, admitted that it took part in an international conspiracy to fix prices and allocate sales for the worldwide, $1.2-billion-a-year citric acid market.

The Justice Department, in announcing the settlement, also said Hans Hartmann, a senior executive at Haarmann & Reimer’s German counterpart, agreed to plead guilty for his role in the conspiracy.

“Haarmann & Reimer has cooperated fully in all aspects of the Justice Department’s investigation,” the firm said in a statement. The money will be paid over five years, it added.

Criminal charges against the firm and the executive were filed in federal court in San Francisco. A judge must approve the guilty pleas.

Justice Department officials said the cartel raised prices of citric acid, which is used in soft drinks, nearly all processed foods, detergents, textiles, chemicals, pharmaceuticals and cosmetics.

The investigation dates back to 1992 and grew out of an initial probe of Archer-Daniels-Midland Co., which has already pleaded guilty to charges of fixing prices for citric acid and lysine, and paid a record $100-million fine.

The Haarmann & Reimer fine represented the second-largest criminal antitrust fine, after that against ADM, the Decatur, Ill.-based agricultural products giant.

Acting Assistant Atty. Gen. Joel Klein said the continuing investigation is active in the United States, Europe and Asia.

The one-count felony charge alleged that Haarmann & Reimer, through several of its employees, conspired with other unidentified major citric acid-producing firms to suppress and eliminate competition from July 1991 to June 1995.

In an earlier civil case, Haarmann & Reimer, ADM, Hoffman-LaRouche Inc., a subsidiary of Roche Holding, and the Austrian-based Jungbunzlauer Inc. in December agreed to settle a price-fixing suit.

As part of the plea deal, the Justice Department agreed to bring no further prosecutions against Haarmann & Reimer or any other executives or employees who cooperate in the probe, the officials said.

In return, the company has agreed to turn over documents and to make its current and former officers, directors and employees available for questioning and possible testimony before grand juries or trials, at the firm’s expense, they said.