Is 65k enough to live in Honolulu

32001D0418

Commission decision

dated June 7, 2000

in proceedings under Article 81 of the EC Treaty or Article 53 of the EEA Agreement

(Case COMP / 36.545 / F3 - amino acids)

(Notified under document number K (2000) 1565)

(Only the German, English and French texts are binding)

(Text with EEA relevance)

(2001/418 / EG)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

based on the Treaty establishing the European Community,

based on the Agreement on the European Economic Area,

based on Regulation No. 17 of the Council of 6 February 1962, first implementing regulation for Articles 85 and 86 of the Treaty (1), last amended by Regulation (EC) No. 1216/1999 (2), in particular Article 15 ,

Having regard to the decision of the Commission of 29 October 1998 to open proceedings in this matter,

after the undertakings concerned were given the opportunity to respond to the objections raised by the Commission pursuant to Article 19 (1) of Regulation No. 17 in accordance with Commission Regulation No. 99/63 / EEC of 25 July 1963 on the hearing under Article 19 (1) and 2 of Regulation No. 17 (3) and Regulation (EC) No. 2842/98 of the Commission of 22 December 1998 on hearing in certain proceedings under Articles 85 and 86 of the EC Treaty (4),

after consulting the Advisory Committee on Antitrust and Monopoly Issues,

Considering the following reasons:

I. FACTS

A. SUBJECT MATTER OF PROCEEDINGS

(1) This case concerns agreements on prices, sales volumes and the exchange of company-specific information on sales volumes by companies that manufacture synthetic lysine and offer it for sale to distributors and / or commercial customers based in the EEA for use in animal feed. This decision covers the period from September 1990 to June 1995.

B. THE COMPANIES INVOLVED AND THE INVOLVED ASSOCIATION

1. Archer Daniels Midland Company

(2) Archer Daniels Midland Company ("ADM") is the parent company of a group of companies that processes grain and oilseeds worldwide. ADM operates more than 200 plants worldwide, including extensive facilities in the EEA, including the world's largest soybean processing facility in Europoort (Netherlands), the world's largest multi-seed complex in Hamburg (Germany) and the world's largest soft-seed crusher in Erith (United Kingdom).

(3) ADM is a manufacturer of starch and starch products that entered the biochemicals market because the production of chemicals based on starch products was expected to be more profitable than traditional products. ADM's BioProducts division was founded in 1989. At that time, the company's management decided to start manufacturing lysine after it became known that two other companies were building production facilities in North America. (However, following ADM's announcement that it would enter the lysine market, these two companies withdrew from the North American market.) ADM's lysine manufacturing facilities were completed in June 1992.

(4) Archer Daniels Midland Ingredients Ltd ("ADM Ingredients") is a wholly owned subsidiary of ADM, which combined the European amino acids business during the period covered by this investigation.

(5) In the financial year ending June 30, 1995, all companies of the ADM group achieved total sales of around USD 12.6 billion (EUR 12.6 billion), in the financial year ending June 30, 1998 Fiscal year total sales of around USD 16.1 billion (EUR 16.1 billion). In 1995 ADM's worldwide lysine sales amounted to around USD 202 million (EUR 202 million), of which around USD 41 million (EUR 41 million) came from the EEA.

2. Ajinomoto Company, Inc.

(6) Ajinomoto Company, Inc. (Ajinomoto) is the parent company of a group of companies that manufacture chemicals including lysine and food. Using its facilities in the field of amino acid engineering, Ajinomoto is also active in the development and manufacture of pharmaceuticals. Ajinomoto has production and sales facilities in 21 countries.

(7) Ajinomoto has feed amino acid production facilities in Japan, the EEA (Eurolysine SA - "Eurolysine"), the United States, Thailand, China and Brazil.

(8) Eurolysine was set up in 1974 as a joint venture between Ajinomoto and Orsan for the production and distribution of feed lysine in Europe. In 1976, Eurolysine set up a plant in Amiens and started producing lysine in Italy through its wholly owned subsidiary Bioitalia Biopro Italia SpA. Eurolysine currently employs 338 people. Eurolysine is the only manufacturer of feed lysine in the EEA.

(9) Until September 1994 Ajinomoto and Orsan each had a 50% stake in Eurolysine. Ajinomoto then increased its stake to 75% by acquiring additional shares in Orsan. In 1996, Ajinomoto acquired all of Orsan's shares in Eurolysine and became the sole owner.

(10) In the financial year ending March 31, 1995, all companies in the Ajinomoto Group achieved total sales of around 725.7 billion YEN (EUR 5.1 billion); 836 billion yen (EUR 5.8 billion). In 1995 Ajinomoto achieved worldwide sales of around USD 239 million (EUR 239 million) with lysine, of which around FRF 483 million (EUR 75 million) were achieved in the EEA.

3. Kyowa Hakko Kogyo Company Limited

(11) Kyowa Hakko Kogyo Company Limited ("Kyowa") is the parent company of a group of companies that develop, manufacture and market pharmaceuticals, food, chemicals, agricultural products, animal health products, alcohol and alcoholic beverages worldwide. Kyowa, which introduced the lysine fermentation process in 1958, has amino acid manufacturing facilities in Japan, Hungary and Mexico.

(12) Kyowa’s European subsidiary is Kyowa Hakko Europa GmbH (Kyowa Europa), which is responsible for marketing lysine in the EEA.

(13) In 1995 all the companies belonging to the Kyowa group had a turnover of around 375 billion YEN (EUR 2.8 billion). In the same year, Kyowa achieved worldwide sales of around YEN 100 million (EUR 73 million) with the sale of lysine, of which around DEM 30 million (EUR 16 million) were in the EEA. For the year ended March 31, 1998, total sales for the Kyowa Group were approximately 398 billion YEN (EUR 2.8 billion).

4. Daesang Corporation

(14) Daesang Corporation is a Korean company and the parent company of a global group whose activities include the manufacture of condiments, animal feed and amino acids. It was created through the merger of Daesang Industrial Limited and Miwon Corporation Limited. Daesang Industrial Limited was previously known as Sewon Corporation Limited and Miwon Foods Corporation Limited (together Sewon). In the first half of 1998 Sewon transferred its worldwide lysine business to a company that was not part of a group of companies affiliated with any of the addressees of this decision.

(15) Miwon Handels GmbH was founded in early 1992 to take over Sewon's amino acids business in Europe. In November 1994 Miwon Handels GmbH changed its name to Sewon Europa GmbH (together Sewon Europe).

(16) In 1995 Sewon had worldwide sales of around WON 225 billion (EUR 227 million). This year it achieved worldwide sales of around DM 125 million (EUR 67 million) with lysine, of which around DM 28 million (EUR 15 million) came from the EEA. In 1998 Sewon had worldwide sales of approximately 1.47 trillion WON (EUR 946 million).

5. Cheil Jedang Corporation

(17) Cheil Jedang Corporation (Cheil) is the parent company of a group of companies that is established and active worldwide. It was founded in 1953 as the first manufacturing subsidiary of the Korean group Samsung. In 1993 the Cheil became an independent company. It is a diversified company with a focus on pharmaceuticals and food.

(18) Cheil entered the lysine market in 1991. In 1995 it achieved sales of around USD 1.9 billion (EUR 1.9 billion). In that year, Cheil achieved worldwide sales of around USD 52 million (EUR 52 million) with lysine, of which around EUR 17 million came from the EEA. In 1997, Cheil had sales of around USD 1.4 billion (EUR 1.4 billion).

6. Fefana

(19) The Federation Européenne des Fabricants d'Adjuvants pour la Nutrition Animale ("Fefana") with a central office in Brussels represents and promotes the scientific, technical and economic interests of the manufacturers of feed additives.

(20) Fefana was set up to deal with the numerous proposals for Community legislation, regulations and administrative provisions relating to animal feed. The national professional associations dealing with feed additives believed that their industry should be represented at European level, which is why they founded Fefana in 1963 for this purpose.

C. THE PRODUCT

(21) Lysine is an essential amino acid. Amino acids are the building blocks of protein, an essential part of body tissues. Animals synthesize body proteins from amino acids that are released during digestion. All proteins occurring in life are based on 22 different amino acids. Animals can only synthesize some of these. The amino acids designated as essential must be provided through food, either naturally bound to protein or in chemically pure form. The most important sources of amino acids for animals are proteins of vegetable or animal origin, such as soybean meal, rapeseed meal, corn glut, peas, fish meal, meat and bone meal, skimmed milk and other products. Another source of certain amino acids is industrial production. These amino acids are the same as the amino acids found in protein feed.

(22) In most cases, a single feed or combination of feeds does not provide all the amino acids in sufficient quantities to precisely meet the animal's nutritional needs. Certain amino acids are provided in excess amounts in order to provide a sufficient amount of other amino acids. The addition of amino acids in their pure form creates a balanced dietary protein.

(23) Noticeable progress has been made in determining the amino acid requirements of the various animal species, and nutritionists have long recognized the advantage of the correct feed composition. Supplementing the diet with individual amino acids allows the crude protein content of the diet to be reduced while the amino acids can be kept at their appropriate levels. Research has shown that the amount of dietary protein in regular corn soybean meal can be reduced if the diet is supplemented with sufficient amounts of lysine, tryptophan, and threonine.

(24) The availability of synthetic amino acids gives nutritionists the flexibility to formulate feed with amino acids that better meet animal needs than when using conventional raw materials. This can reduce the use of relatively expensive protein sources and at the same time improve animal performance.

(25) There is increasing pressure in European countries to reduce the nitrogen and phosphorus levels in wastewater resulting from intensive animal husbandry. According to Fefana estimates, the increasing use of amino acids in connection with reduced crude protein levels in animal feed has the potential to reduce nitrogen excretion by up to 20-25%.

(26) The elimination of state subsidies in the course of the reform of the common agricultural policy should reduce the expenditure on cereals in European countries. This could increase the proportion of grain in animal feed compared to oil cake in Europe. This would ultimately lead to an increase in the demand for synthetic amino acids, since if the conditions were otherwise unchanged, the amino acid requirement would no longer be covered by a high proportion of oil cake in the feed.

(27) The production of synthetic amino acids is one of the oldest and probably most frequent biotechnological applications in the animal feed industry. It requires the fermentation of a suitable hydrocarbon source, such as sugar or starch, by a genetically modified organism that produces the respective amino acid in excess.

(28) Lysine for animal feed has been produced commercially for around 30 years, and the increase in the use of this amino acid around the world is remarkable. While around 30,000 t were consumed in the entire world in 1979, the current consumption is around 250,000 t annually. While this increase is partly due to the increase in pig and poultry production, it also reflects improvements in the composition of animal feed.

D. THE LYSINE MARKET

1. The supply side

a) Production

(29) A genetically modified bacterium is used to ferment hydrocarbons to produce synthetic amino acids. The most important requirement is the creation and maintenance of sterile conditions under which the organism can grow, but contamination by other microorganisms is prevented. The production technology has been noticeably improved over the years, which has led to considerable cost savings.

(30) The hydrocarbon source used for the fermentation process is by far the largest cost of production. Since its manufacture requires significant amounts of electrical energy to shake and ventilate the fermentors, access to cheap electricity is critical. The production of amino acids is extremely capital-intensive. It requires substantial investments in fermentation, extraction, cleaning and contamination control equipment.

(31) Before 1991 there were only three manufacturers of lysine, namely Ajinomoto / Eurolysine, Kyowa and Sewon. With a production capacity of around 80,000 t, Ajinomoto / Eurolysine was the largest supplier. Kyowa and Sewon had smaller capacities of around 50,000 and 30,000 t respectively. In 1994 Sewon began expanding its capacity up to 50,000 tons.

(32) In 1991 ADM entered the lysine market. With his plant, the worldwide capacity for the production of lysine doubled. It was also known that ADM was very well funded and had cheap access to raw material resources.

(33) Also in 1991, Cheil entered the lysine market with a production capacity of around 10 000 t. At the end of 1993, Cheil began expanding its production capacity to up to 40,000 t. This growth continued until the beginning of 1994 and was finally completed in July 1995.

(34) During the period covered by this proceeding, there was no major entry into the lysine market.

(35) Eurolysine is the only lysine producer in the EEA.

b) Distribution

(36) In the EEA, the lysine manufacturers concerned by this Decision operate different distribution systems, ranging from direct sales to industrial customers (feed mills) to indirect sales through agents and / or independent distributors established in the various Member States.

(37) Until May 1995, ADM Ingredients had two sales agents, of which BASF was subsequently replaced by direct sales and a number of other distributors or agents.

(38) Eurolysine sells amino acids through a number of distributors. Ajinomoto's direct participation in the European lysine market was limited to its participation in Eurolysine (see paragraphs 8 and 9).

(39) Kyowa Europa appointed two Japanese trading houses as sales agents for lysine, with offices and representatives in different EEA Member States.

(40) Sewon Europa sold lysine to distributors and commercial customers.

(41) Cheil has no sales subsidiary in the EEA. It mainly sells its lysine to commercial customers through a sales office.

2. Demand side

(42) The European feed industry produces more than 150 million tonnes of animal feed annually in thousands of feed mills across Europe. In the feed mills, feed and micro-ingredients are formulated and mixed into compound feed and, if necessary, further processed in order to cover the nutritional needs quantitatively and qualitatively at the lowest possible cost per ton of animal feed. In the case of the feed formula, a sufficient proportion of every essential amino acid must be guaranteed.

3. Market information

a) Factors that determine the determination of lysine prices

(43) Synthetic lysine is largely used as an additive to animal feed that does not contain, or not enough, natural lysine, e.g. B. contains grain. Feedstuffs to which lysine is added can therefore be substituted by feedstuffs that contain sufficient lysine in their natural state, such as B. Soybeans.Therefore, the European feed industry's demand for synthetic lysine, and therefore its price, is influenced by European grain prices and soybean prices in the world market, which is listed on the Chicago Board of Trade. The price of soybeans minus the grain price is known as the "shadow lysine price".

(44) Nutritionists determine the optimal feed formulas for the lowest possible cost. After entering the data on the available feeds and their current prices, successive substitutions between different feeds are made until the most cost-effective formula that meets all nutritional requirements is found.

(45) Changes in the market force the feed industry to react quickly to movements in the prices of ingredients by immediately identifying new formulas based on the same nutritional guidelines. This can lead to changes in the amount of lysine used. If the cost of the feed to which synthetic lysine is added exceeds the prices of alternative, naturally high-amino-acid feeds, synthetic amino acids are only used for as long as necessary to maintain a more balanced diet and to prevent excess protein content.

b) Average monthly prices for lysine

(46) Between the beginning of 1981 and the end of 1988 lysine prices almost doubled. After that, prices went down again.

(47) Between 1991 and 1995 Eurolysine, ADM Ingredients, Kyowa Europa and Sewon Europa charged their customers the following monthly prices for lysine:

> TABLE>

c) Annual amounts of lysine

(48) The companies concerned by this decision have sold the following quantities of lysine annually (-L):

> TABLE>

> TABLE>

> TABLE>

> TABLE>

> TABLE>

E. SEQUENCE OF EVENTS

(49) Ajinomoto / Eurolysine, Kyowa and Sewon were the only manufacturers of synthetic lysine until the early 1990s. Ajinomoto / Eurolysine was the market leader worldwide and also in Europe. In the early 1990s, ADM and Cheil invested in lysine manufacturing capacity and prepared to enter the lysine market.

1. Asia / Europe cartel

(50) The Commission has indications that in the 1970s and 1980s the Asian lysine producers Ajinomoto, Kyowa and Sewon cooperated in different ways to fix prices and sales volumes for Europe.

(51) The verifiable first secret agreement took place in July 1990. When it became clear that ADM and Cheil were making investments in order to enter the lysine market, the Asia / Europe cartel was used as a forum to closely monitor how the potential of the new entrants was influencing the competitive conditions in the market would be able to develop.

a) start

(52) In a letter dated 6 December 1990 to Ajinomoto, Sewon refers to a meeting between the two companies that took place in July 1990. It is stated that Sewon was able to increase the price of lysine noticeably "with the help of Ajinomoto" after the meeting. In view of the cooperation between the two companies on prices and sales volumes for lysine which followed the July 1990 meeting, the Commission considers that Ajinomoto and Sewon agreed on the world market prices for lysine as a result of this cooperation.

(53) On September 20, 1990, Ajinomoto and Sewon met in Seoul. Ajinomoto informed Sewon that the day before its American subsidiary had announced a price increase and that the new price would be the worldwide standard price (the European price was 4.60 DEM / kg). Ajinomoto was also referring to Kyowa's intention to announce a price increase in the United States on September 24, 1990. Ajinomoto, Kyowa and Sewon had telephoned the new prices and discussed the outline of an agreement prior to the meeting. Sewon assumed that it had been asked by Ajinomoto to understand the price development and agreed to accept the prices indicated by Ajinomoto.

(54) In December 1990 Ajinomoto and Sewon discussed the possibility of a further price increase. On December 12, 1990, Sewon announced to Ajinomoto that it had agreed to the worldwide increase in the price of lysine.

(55) The expiry of the price-fixing procedure on 20 September 1990 shows that Kyowa was also involved in the price agreements for Europe, since the American price was regarded as the standard world price. The Commission also considers that the price fixing agreements between Ajinomoto and Sewon in July and December 1990 were not limited to these two companies. First, the substantial increase in the price of lysine in July 1990, to which Sewon referred in its letter of 6 December 1990, would not have been possible without the cooperation of the second largest producer of lysine. Second, the way the Asia / Europe cartel worked shows that Kyowa's involvement was essential. Finally, in an internal document setting out the market allocation within the Ajinomoto / Orsan group in accordance with discussions at the Mexico meeting of June 23, 1992 prepared by Ajinomoto with a view to the Tokyo meeting of July 10, 1992, Kyowa is under listed under the heading "Old Club" together with Ajinomoto, Sewon and Cheil. This agrees with Ajinomoto's statement that prior to mid-1992 the initiative for talks on the European market did not come from Ajinomoto but from Sewon and Kyowa.

b) Meeting of February 18, 1991

(56) On 18 February 1991, representatives from Ajinomoto, Kyowa and Sewon met to set the world price of lysine, and in particular the price for Europe, which at that time corresponded to Eurolysine's sales price (i.e. DEM 4.70 / kg).

(57) In terms of volumes, Sewon was prepared to limit its sales to the level of the previous year until ADM reached the full levels of production and sales expected in April and May 1991, respectively, in order to maintain prices. Kyowa insisted on the domestic market principle. The participants agreed to limit their sales in 1991 to 1990 export volumes.

c) Meeting on March 12, 1991 in Tokyo

(58) The meeting took place at the Okura Hotel between representatives from Ajinomoto, Kyowa and Sewon. The agenda was drawn up by Ajinomoto, who also organized the meeting.

(59) On this occasion, Kyowa provided the following information about ADM: ADM's 24 fermentors would run normally until mid-April, ADM would start sales in early May, its production schedule saw 27,000 t in the first, 45,000 t in the second and 60,000 t in the third year ago; ADM plans to sell half of its production in the US market and reserve the second half for export. It also intends to follow the sales prices of the other manufacturers.

(60) Ajinomoto also provided information on Cheil's production facility in Indonesia, gathered during a business trip to Indonesia.

(61) The participants then discussed their own market behavior. Sewon informed the rest of the audience that it intended to sell the same amount in the US in 1991 as the previous year and that it would definitely maintain the base price. The other participants complained about Sewon, which was selling its product in Europe below the agreed price of DEM 4.70 per kg. Sewon was asked not to sell below the agreed price and to maintain the sales volume of the previous year. It was noted that the European price would be discussed at the local European meetings. The participants promised to keep the agreements on sales volumes and prices made at this meeting until ADM and Cheil begin their sales in the market to a noticeable extent. In the event of breaches of the agreement, each company agreed to immediately contact the other participants using a "hotline" proposed by Ajinomoto.

d) Meeting on July 4, 1991 in Tokyo

(62) The meeting took place on the Ajinomoto premises. The companies Ajinomoto, Kyowa and Sewon were represented.

(63) Information was exchanged on the production capacities and sales volumes of ADM and Cheil. A few days before the meeting, Cheil had given Ajinomoto details of its production capacities and sales volumes by telephone.

(64) The participants then exchanged information on their own prices and sales volumes. They related to a regional meeting on July 3, 1991, at which a price for Europe of DEM 4.30 per kg was announced. In line with this price announcement, the price for the United States and Europe was set at DEM 4.30 per kg. Asia and Oceania prices should be discussed at a later stage. With regard to sales volumes, it was concluded that "monitoring sales volumes is a difficult undertaking".

e) Follow-up

(65) After ADM began selling substantial volumes at low prices, Ajinomoto, Kyowa and Sewon met in Seoul on 11 February 1992. They discussed the market potential of ADM and Cheil and their prices. On March 10, 1992, Ajinomoto and Kyowa agreed to adjust ADM's prices in order to maintain their market shares. On March 12, 1992, the Asian manufacturers met again to discuss ADM's imminent full entry into the lysine market. During this period the prices were also discussed by telephone.

(66) On March 30, 1992, Sewon Europa reported to its head office in Korea about a "trilateral meeting" which had apparently taken place a few days earlier. Ajinomoto, Kyowa and Sewon discussed the situation of the lysine market in Europe and found that the prices in Germany, Great Britain, the Netherlands, Luxembourg and France, which at around 3.24 DEM per kg were relatively lower than in other countries, increased by 5%. It was agreed to keep the price for the European market at DEM 3.76 per kg. The next meeting was scheduled for April 30, 1992 in Basel. In its report to headquarters, Sewon Europa expressed doubts as to whether the price discussed could be held "as the companies involved differed and ADM and Cheil did not take part in the talks".

(67) On May 5, 1992, Sewon Europa reported to its headquarters in Korea another "trilateral meeting" (probably held in Basel on April 30, 1992) at which Ajinomoto, Kyowa and Sewon assessed the lysine market in Europe. In particular, all participants agreed to keep the price for the European market at DEM 3.76 per kg. The next meeting was to take place on June 3, 1992 at a location to be determined by Sewon. In the report, Sewon Europa apparently made it clear that it felt it would be pointless to discuss price increases in meetings that ADM and Cheil did not attend.

(68) On 19 July 1992 Ajinomoto, Kyowa and Sewon met and came to the conclusion that the possibility of increasing prices by reducing the volume of each company should be examined. It was agreed that the problem of a price increase could be solved by ADM agreeing to only use 80% of its capacity. Ajinomoto and Kyowa also called on Sewon to noticeably reduce its sales to the USA and Europe in accordance with the principle that as much of the production as possible is sold domestically.

2. Worldwide cartel

a) Background

(69) The ADM plant had doubled global lysine production capacity. Already before and shortly after entering the market, ADM had given existing manufacturers to understand that although it intended to become a leading player in the lysine market, it preferred to gain market share through coordination rather than a price war. To this end, ADM met with Ajinomoto on December 12 and with Kyowa on December 13, 1991. On February 11, 1992, Ajinomoto and Kyowa Sewon reported on their respective meetings with ADM.

(70) In order to convince the existing producers of the seriousness of its intentions and the disadvantages of not agreeing, Ajinomoto, Kyowa and Sewon were given the opportunity to tour ADM's production facilities; in addition, ADM began selling at low prices. This prompted the old lysine manufacturers to reduce their lysine prices noticeably from the beginning of 1992 in order to maintain their market shares. In response, Ajinomoto and Kyowa agreed on March 10, 1992 that they should work with ADM and hold meetings to work out an agreement on prices and sales volumes (meeting of April 14, 1992 between ADM and Ajinomoto in Tokyo, on 16/16 April 17, 1992 between ADM and Kyowa in Hawaii and June 19, 1992 - the same day Ajinomoto, Kyowa and Sewon met - between ADM and Sewon in Decatur).

(71) These discussions led to the meeting in Mexico on 23 June 1992, which marked the beginning of ADM's participation in the Asia / Europe cartel.

b) Meeting on June 23, 1992 in Mexico

(72) This meeting, organized by Kyowa, was chaired by representatives from ADM, Ajinomoto / Eurolysine and Kyowa. It was decided that Ajinomoto and Kyowa representatives would inform Sewon and Cheil of the outcome of the meeting.

(73) ADM's main objective was to have the same production share as its main competitor, so that a third of world demand would go to ADM, another third to the Ajinomoto group and the remaining third to Kyowa and the Korean producers. Kyowa and Ajinomoto disagreed with this proposal, at least in terms of the schedule. ADM then suggested that it would only implement its quotation proposal in the second year by appropriating the additional market growth until it reached Ajinomoto's market share. The following quota system was proposed for 1992: Ajinomoto 66,000 t, ADM 48,000 t, Kyowa 34,000 t, Sewon 18,000 t and Cheil 6,000 t. Ajinomoto was ready to agree to a quota of 48,000 tonnes for ADM in 1992, provided that growth prospects existed. ADM announced that it would definitely implement its volume proposal from October 1, 1992.

(74) The mechanisms of the allocation of quantities were also discussed. ADM explained that competitors in the citric acid industry followed sales both formally and informally.

(75) Agreement was reached on the following lysine prices by October: USD 1.05 / lb franco (at that time USD 0.7 / lb) for North America (a "slightly higher" price was considered appropriate for Europe). Subject to final agreement on the sales allocation proposal, the price has been set at $ 1.2 / lb by the end of the year. For the remaining areas, the target price was USD 2.3 cif (at that time below USD 2 / kg cif).

- Follow-up

(76) On 2 July 1992 Kyowa was informed by telephone that ADM would agree to a production quota of 48000 tonnes for 1992 if it would catch up with Ajinomoto within three years.

(77) On 10 July 1992, Ajinomoto and Kyowa met with the two Korean lysine manufacturers at Ajinomoto's premises in Tokyo. Ajinomoto informed the Korean producers of the discussions with ADM on 23 June 1992 regarding the allocation of sales volumes. Ajinomoto and Kyowa submitted an allocation plan based on market power and the level of investment of each provider. The following allocations were proposed for the individual manufacturers: Ajinomoto 73,000 t, Kyowa 37,000 t, ADM 48,000 t, Sewon 20,000 t and Cheil 6,000 t in the first year. For Europe, the following allocations were proposed from a total of 58,000 t: Ajinomoto 34,000 t, Kyowa 8,000 t, ADM 5,000 t, Sewon 13,500 t and Cheil 5,000 t. Any increase in demand in North America would go to ADM, and any future sales increase in Europe would go to Eurolysine. Ajinomoto announced that if an agreement was reached between the participants, the final awards would be agreed with ADM in late July. To monitor sales volumes, all companies should meet quarterly to review and collect information on the volume of production and sales of each company. Sewon spoke out against a "local competitiveness-based quota system". It suggested that the future allocation should align with each participant's share of the previous year's sales. Cheil demanded a worldwide allocation of 15,000 t. In the absence of an agreement, it was agreed that the participants would discuss these issues with their business performance and would communicate the results of these reviews to Ajinomoto by July 17th. Ajinomoto ADM then explained the content of the meeting regarding prices, in particular with a view to adjusting the price to 1.05 USD / lb in both Europe and America by 30.September 1992 and then a further adjustment to 1.20 USD / lb by December 30, 1992.

(78) On 7 August 1992, the Asian producers met again at the Ajinomoto premises in Tokyo. They continued discussions to reach an agreement to reduce the production volume of lysine. Ajinomoto informed the other participants that ADM was ready to invite competitors to visit its production facilities in Decatur to demonstrate its production capacity. Sewon proposed a general reduction in production by 20% and a change in the allocation of quantities as follows: Ajinomoto 64,800 t, ADM 48,000 t, Kyowa 33,600 t, Sewon 26,600 t and Cheil 12,000 t. This modified plan was not approved either, as Ajinomoto did not agree with the amount allocated to him and Cheil insisted on 15,000 t. However, it was agreed to continue talks on reducing production volumes. Although the proposed price increase was welcomed, it was decided that this issue would be discussed in more detail at the next meeting with ADM. Ajinomoto thought it better to work out a plan with different scenarios before the next meeting, which was welcomed by all participants. Ajinomoto also suggested holding another meeting in Seoul.

(79) On August 27, 1992, the Asian producers met at the Cheil premises in Seoul and continued their talks on July 10 and August 7, 1992. No conclusion was reached on the next steps in discussions with ADM regarding the allocation of sales volumes for lysine. The participants defined what they believed the purpose of the meeting with ADM should be: not a decision on the allocation of quantities, but the confirmation of the price increase and discussions about its practical implementation. They agreed to ADM's plan to increase the US price to $ 1.05 / lb from August 31, 1992. Participants found that ADM had already offered this price to its customers. The American subsidiaries of Ajinomoto and Kyowa intended to announce the new price from mid-September. A price adjustment for Europe should be decided at a meeting in Europe.

(80) On September 8, 1992, ADM and Ajinomoto met in Chicago. Ajinomoto suggested that lysine sales should not be allocated worldwide, but that production should be restricted according to local market conditions. ADM agreed, but insisted on a total production quota of 48,000 t. Both participants confirmed the price increase to USD 1.05 / lb originally agreed between ADM and the Japanese manufacturers at the Mexico meeting on June 23, 1992, and which the Korean manufacturers had agreed to at the August 27, 1992 meeting in Seoul .

c) Meeting on October 1, 1992 in Paris

(81) At that meeting at the Pullman Windsor Hotel in Paris, ADM, Ajinomoto / Eurolysine, Kyowa, Sewon and Cheil were represented. Ajinomoto / Eurolysine, who also organized the event, had simulated a Fefana agenda. The participants only discussed prices. The five companies assessed the effects of the agreed price levels and exchanged information on the approval of the price increases in the individual regions.

(82) The participants referred to the price increases in Europe, which were initially set at DEM 3,50 / kg and then at DEM 3,75 / kg at the meeting on 27 August 1992 in Seoul. At that time, the manufacturers had announced a price of DEM 4.00 / kg. However, all participants admitted that this price had not yet been used in practice. In particular, it was found that the European price at that time was 22% above the US price. Fears were also expressed that if the price gap widened, parallel imports would be attracted, making it impossible to increase the European price at the time. It was therefore agreed to keep the price at 4.00 DEM / kg and to discuss a possible further price increase at the next meeting.

(83) ADM advocated fewer participants in the European awards meetings and proposed not to attend the European meetings. For Ajinomoto / Eurolysine, the meetings of the local managers were the most effective forums. Therefore these meetings should continue and ADM should be kept informed directly by the President of Eurolysine.

(84) Prices for the other regions were also fixed.

(85) The possibility of setting up an amino acid working group within Fefana was also discussed. Ajinomoto was hired to investigate this possibility.

- Follow-up

(86) On October 29, 1992, Kyowa discussed lysine prices for Europe with Ajinomoto / Eurolysine.

(87) Ajinomoto / Eurolysine and Sewon met in Seoul on 2 November 1992 to discuss ADM's behavior in the lysine market. Ajinomoto informed Sewon that ADM would try to increase the price until market demand declined and that at that time it had agreed to allot 48000 tonnes of sales. For this reason, at the meeting in Paris on October 1, 1992, ADM made no mention of volume allocations. Ajinomoto assumed that ADM would ask for the maximum amount in 1993 and an even larger amount at the end of 1993. The lack of a comprehensive agreement on production quotas was seen as a destabilizing factor in relations between producers. This was mitigated by the reticence of all companies, including ADM, in their sales, with consensus that more cooperation would be needed on quotas. Sewon was ready to agree to a 40% cut.

(88) At that meeting, Sewon was asked by Ajinomoto / Eurolysine to cease sales in Europe for the next two weeks, to keep the price at DEM 4,25 and to limit sales to 6000 t per year. If Sewon does not reduce its sales volumes in Europe, Eurolysine would bring an anti-dumping lawsuit against Sewon. Sewon confirmed its readiness to apply the agreed prices and to limit its sales in Europe to 6,000 tons per year. It was agreed to communicate openly and directly at the highest level in the event that the agreement was not adhered to by the employees.

(89) On 4 November 1992, ADM and Ajinomoto discussed their lysine sales practices by telephone. The prices for Asia, North America and Oceania were confirmed in accordance with the meeting held in Paris on October 1, 1992. The price for Europe was set at 4.25 DEM / kg. It was noted that Sewon deviated from the agreed price levels in some respects. In the opinion of the participants, ADM should sell lysine in Korea "so that Sewon can behave well in other regions".

(90) On November 2nd and 5th, 1992, Ajinomoto met with Cheil in Seoul. Cheil announced that due to the collaboration, the lysine price increase was a great success, which is why it intends to continue the collaboration on lysine prices. However, differences of opinion persisted with regard to sales volumes.

(91) Following the meetings in Mexico and Paris, prices were increased in some parts of North America and Europe, but not across the board. The companies affected by this decision accused each other of non-compliance with the price agreements. Subsequently, there was a deterioration in the relationship between the manufacturers.

(92) On November 30, 1992, Ajinomoto, Kyowa, Sewon and Cheil met at the Cheil premises in Seoul. The topic of conversation was the very low prices demanded by ADM. Contacts with ADM were suspended because of an FBI search of ADM (which prompted the then President of ADM Bioproducts to collaborate with the FBI on the lysine investigation). Participants found that they had no choice but to wait for ADM to reconnect.

(93) Since producers believed that their inability to reach a comprehensive volume agreement helped initiate and prolong the return to low prices, talks on volume allocation resumed. ADM and Ajinomoto intended to hold meetings on the "worldwide lysine market" in mid-January 1993. On January 21, 1993, ADM proposed a regional allocation to Kyowa.

(94) On February 26, 1993, Ajinomoto, Kyowa, Sewon and Cheil met at the Ajinomoto premises in Tokyo. In the absence of an agenda, Ajinomoto suggested exchanging views on the decline in the price of lysine in the world market and exploring ways of increasing the price. Participants noted that the price would be maintained as Ajinomoto and Sewon curtailed their sales volumes. Regarding the world situation, they came to the conclusion that no progress could be made.

(95) In order to revive the quota discussion, executives of ADM and Ajinomoto agreed a meeting to develop the relationship between the two market leaders and to accelerate the process of moving towards a comprehensive volume agreement. Because Kyowa and Eurolysine wanted to exchange views prior to a meeting between ADM and Ajinomoto, meetings between ADM and Kyowa were held on April 15, 1993 and between ADM and Eurolysine on April 28, 1993.

(96) At the meeting with ADM on 15 April 1993, Kyowa took the view that all competitors should limit their sales volumes.

(97) At the meeting of 28 April 1993, Eurolysine discussed with ADM the possibility of distributing sales only in those regions where the pricing agreement had actually led to price increases in 1992. With regard to Europe, ADM and Eurolysine agreed that possible price increases were due to the agreement reached in Mexico on June 23, 1992, and that this agreement was only fully implemented in Europe.

(98) On 30 April 1993, Ajinomoto and ADM met at ADM's premises in Decatur. The purpose of the meeting was to restore the relationship between the executives of the two largest lysine manufacturers and to initiate the process of developing a comprehensive volume agreement. ADM made it clear that it was imperative for companies to control their sales force in order to maintain high price levels, as their sales force tended to be competitive and because of undercutting problems if manufacturers did not strictly control their salespeople. Ajinomoto made it clear that the need to adapt the offer was seen by all providers. Another meeting between the two companies took place on May 14, 1993 in Tokyo.

(99) ADM and Ajinomoto informed Kyowa of their meeting in Decatur.

(100) On 14 May 1993, ADM and Ajinomoto / Eurolysine met in Tokyo to pursue discussions that had begun at Decatur. They exchanged views on the size of the market at the time and ADM's share of that market. ADM requested 65,000 tonnes for 1993. The mechanism of obtaining and monitoring a sales volume agreement was discussed again. ADM believed that communication should be done through a business association. As an example, it cited the monthly reports of its citric acid sales to an association, which were checked by the Swiss trust company. Similarly, sales of lysine could be reported to Ajinomoto, which in turn could report these figures to all participants. The confidentiality of the reporting mechanism is of particular importance.

(101) Ajinomoto told Kyowa about the meeting with ADM in Tokyo. Both producers agreed that ADM's volume allocation request for 1993 was unreasonable and that Sewon should be included in the volume discussions.

(102) On 27 May 1993, Ajinomoto and Kyowa met Sewon and informed Sewon of ADM's volume claim for 1993. Ajinomoto referred to the good results of the cooperation in the past, but indicated that the entry into the market by ADM created difficulties. Sewon reaffirmed its readiness to hold talks and negotiate with Ajinomoto and Kyowa. The participants saw the need to adjust the sales volumes at a meeting between the five manufacturers. Ajinomoto wanted to take the initiative to negotiate with ADM, while Sewon wanted to try to convince Cheil to do so.

(103) On June 1, 1993, ADM informed Kyowa that it had decided to halt the fall in the price of lysine in Europe, which is why it had announced a price increase to USD 0.81 / lb the day before.

(104) On June 18, 1993, Ajinomoto, Kyowa, Sewon and Cheil met at the Sankei-Kaikan Hotel in Tokyo to discuss action at the next meeting of the five manufacturers, which was due to take place on June 24, 1993 in Vancouver. The participants exchanged information on prices and sales volumes for the individual regions. On the basis of Ajinomoto's first proposal (54,000 t for ADM) and ADM's request (65,000 t), they discussed various rules for the allocation of sales volumes. The plan was to insist on meeting with ADM on 54,000 t in order to reach an agreement on 60,000 t. The final allocation would then be: Ajinomoto 81,200 t, ADM 60,000 t, Kyowa 44,400 t, Sewon 32,900 t and Cheil 13,500 t. Ajinomoto suggested introducing quarterly meetings for each region and a communication system. The price increases for the individual regions were confirmed by the participants. For Europe the price was set at 3.20 DEM / kg (based on the confirmed price of 0.81 USD / lb) or 4.20 DEM / kg when the American price rose to 1.05 USD / lb.

d) Meeting on June 24, 1993 in Vancouver

(105) The meeting took place at the Hyatt Regency Hotel in Vancouver. The companies ADM, Ajinomoto / Eurolysine, Kyowa, Sewon and Cheil were represented.

(106) The following items were on the agenda: 1. Review of recent market developments, 2. Adjustment of production / sales volumes for each country, 3. Timetable for price increases, 4. Communication system (especially regional meetings) and 5. Development of an organization for the cooperation of the lysine manufacturers.

(107) It was found that the price increases in the USA and Europe were successful, while the agreements for Central and South America and Asia were not properly implemented. Participants envisaged a gradual increase in prices from $ 0.81 / lb to $ 0.95 / lb, $ 1.10 / lb, and eventually to $ 1.20 / lb.

(108) Ajinomoto provided a table of the allocation of quantities, on which ADM was entered as 54000 t. ADM insisted on maintaining its then production volume of 65,000 t.

(109) With regard to the communication system, the Japanese manufacturers were interested in local meetings, which was met with opposition from ADM, which requested a direct connection to the headquarters.

(110) With the exception of Cheil, it was agreed to form an official lysine organization to be administered by Ajinomoto and ADM.

- Follow-up

(111) Ajinomoto and ADM agreed to hold a meeting to be organized by Ajinomoto in Paris on October 5. The main items on the agenda should be prices and quantities as well as the merger. ADM informed Ajinomoto that its production volume for the past nine months was equivalent to an annual yield of 65,000 tonnes, which was an acceptable minimum for ADM. Parity with Ajinomoto in market share could be postponed for another two or three years, according to ADM.

e) Meeting on October 5, 1993 in Paris

(112) The meeting took place at the Grand Hotel in Paris with the participation of Ajinomoto / Eurolysine, ADM, Kyowa, Sewon and Cheil. It was organized by Ajinomoto, who also prepared the agenda and chaired it. The subject of the meeting was the establishment of an association of amino acid manufacturers under the umbrella of Fefana, an agreement on prices for the fourth quarter of 1993 and the allocation of sales volumes for the coming year.

(113) Ajinomoto reported on the status of the establishment of a producers' association.

(114) In terms of market developments, the participants found that the Mississippi flooding in the summer of 1993 had destroyed the soybean harvest in the United States, which had led to an increase in grain prices but at the same time to excess lysine stocks. They therefore expected a decline in orders, which is why deliveries would have to be reduced to prevent prices from falling. For Europe, a 40 to 50% reduction was envisaged.

(115) When checking prices by region, it was found that the price of DEM 5.30 per kg agreed for Europe at a regional meeting was significantly higher than prices in other regions. It was agreed to keep the European price at this level.

(116) For the period October 1993 to September 1994, each company reported the corresponding level of production. An amount of 22,000 tonnes was claimed from Cheil, which was different from the amount given by this company at the meeting in Vancouver on June 24, 1993. ADM could not promise a reduction in production at the time, which is why it was decided that the top management of ADM and Ajinomoto would be directly involved in the volume discussion.

- Follow-up

(117) On 25 October 1993, the heads of ADM and Ajinomoto met in Irvine to discuss the volume allocation for each lysine producer for 1994. After examining the quantities of lysine to be sold by the individual manufacturers by the end of 1993, ADM proposed that these figures be used to calculate the allocation of sales quantities for 1994 for each manufacturer. They discussed the market growth for 1994 and the distribution of this growth among the individual manufacturers. ADM agreed that all other lysine manufacturers could sell 2000 tonnes more that year than they had sold in 1993 and that ADM and Ajinomoto would share the remaining growth in global lysine sales in 1994. ADM agreed with this plan and was tasked with ensuring that the other manufacturers agree to this allocation scheme.

(118) After the Irvine meeting, the volume proposal agreed there was discussed by the Asian producers. Both Cheil and Sewon were interested in a larger stake, so Cheil did not attend the next meeting, which was held in Tokyo on December 8, 1993.

f) Meeting on December 8, 1993 in Tokyo

(119) The meeting, attended by representatives from Ajinomoto / Eurolysine, ADM, Kyowa and Sewon, took place at the Hotel Palace in Tokyo.

(120) The price of lysine was revised for each region and it was found that the prices agreed in Paris on 5 October 1993 had not been fully implemented. In Europe, the price at that time was DEM 5.00 per kg instead of DEM 5.30 per kg as agreed, although all manufacturers had restricted their sales. It was agreed to keep the European price at DEM 5.30 per kg for the first quarter of 1994.

(121) The volume allocation plan developed by ADM and Ajinomoto in Irvine was also refined. The sales volumes have been allocated to manufacturers worldwide and by region including Europe. Globally, ADM received 67,000 t (plus part of the 1994 growth), Ajinomoto 84,000 t and Kyowa 46,000 t. ADM, Ajinomoto and Kyowa individually agreed to the allocation scheme. Sewon was to receive either 34,000 or 37,000 tonnes depending on whether Ajinomoto and Kyowa agreed to a review of their 1992 sales volumes. Sewon agreed to this proposal.

(122) ADM named Ajinomoto as the bureau to which each lysine producer had to report its monthly sales figures. It was Ajinomoto's job to monitor the incoming figures so that manufacturers could adjust their sales in order to limit their annual sales according to the agreed ceilings. Regarding the submission of their monthly sales figures, ADM gave the other manufacturers the precautionary rule of "monitoring their phones and being very careful". ADM also suggested that manufacturers attend their professional association's quarterly meetings to adjust their prices and sales volumes in accordance with their agreements. It explained why the formation of a professional association would be an outwardly legitimate, but artificial, occasion for meetings that could obscure the fact that actual competitors come together in secret to discuss prices and sales volumes. ADM explained the interplay between "official" and "unofficial" meetings. For example, at the official meeting of a professional association, a hotel suite could be booked and the cartel participants secretly informed so that they could meet and discuss prices and sales volumes apart from the official meeting. The participants agreed to this approach.

- Follow-up

(123) The review of sales figures was discussed by the Asian producers.

(124) On February 1, 1994, ADM Ingredients and Eurolysine met. They discussed the prices at the time and decided to slow down deliveries to keep prices high. This was the first meeting of European lysine manufacturers after the "trilateral meetings" in the first half of 1992 (paragraphs 75 and 76) for which documents are directly in the Commission's possession. The indirect evidence available in relation to other meetings (August 27, 1992, October 1, 1992 and October 5, 1993) shows that throughout the period covered by this investigation, representatives of European lysine manufacturers refined the decisions made at the global level .

(125) On January 26, 1994, the first official meeting of the Fefana amino acids working group took place at the Fefana office in Brussels. On February 15, 1994, Eurolysine invited the remaining lysine manufacturers to a simulated meeting of the Fefana Task Force in Honolulu.

g) Meeting on March 10, 1994 in Honolulu

(126) The meeting, which was attended by representatives from Ajinomoto / Eurolysine, ADM, Kyowa, Sewon and Cheil, took place at the Sheraton Makaha Resort hotel, chaired by Kyowa.

(127) The Hawaii meeting was the first meeting since Ajinomoto / Eurolysine, ADM, Kyowa and Sewon decided to report their monthly sales to Ajinomoto. During the morning Ajinomoto / Eurolysine, ADM, Kyowa and Sewon discussed their sales figures in relation to the target sales volumes agreed at the Tokyo meeting of 8 December 1993. The question was then discussed whether these figures should be checked as part of an audit. Since no progress could be made on this issue, it was agreed that the management of the Asian manufacturers should decide on the audit question at a later meeting.

(128) In the afternoon, Cheil, which had not attended the morning meeting because it requested a larger sales volume allocation as previously agreed with the other producers, received a quota offer of 17000 t. Cheil agreed to this offer and the monthly submission of the sales figures.

(129) The participants, including Cheil, then discussed and agreed the lysine prices for the second quarter of 1994 for each country in the regions of North America, Central and South America, Europe, the Middle East, Africa and Asia.

(130) On the European market it was found that the price was below DEM 5.00 / kg and that the end users appeared to expect a further decrease. In addition, the stocks had apparently decreased due to manipulation of the trade. It was decided to set the price for Europe at DEM 5.20 / kg with immediate effect.

(131) ADM and Ajinomoto proposed that the next official meetings of the Amino Acids Working Group should be used as a "cover" for secret manufacturers' meetings.

- Follow-up

(132) On March 15, Ajinomoto, Kyowa and Sewon met at the Royal Hotel in Tokyo to select a trust company to review sales figures. While Japanese companies wanted to use their own auditors, Sewon suggested appointing a single trustee firm to audit all companies. It was agreed to continue the discussion at the next meeting. The 1994 sales volume allocation for Sewon was discussed again. While the Japanese companies referred to 34,000 tonnes based on 1992 sales, Sewon claimed 37,000 tonnes. However, should the audit results show sales volumes for Ajinomoto and Kyowa in 1992 of 84,000 t and 46,000 t respectively, Sewon would agree to market only 34,000 t in 1994, but 37,000 t in 1995.

h) Meeting on May 19, 1994 in Paris

(133) On the occasion of the second official meeting of the Fefana working group on amino acids on May 19, 1994 in Paris, the five lysine manufacturers met unofficially in the Grand Hotel.

(134) They discussed and analyzed their sales figures reported to Ajinomoto in relation to the target quantities set at the meeting of 8 December 1993 in Tokyo. Ajinomoto found that Sewon had exceeded its share of the total annual volume of 34,000 t and that they would have to buy the remaining volume from other companies by the end of the year. Sewon replied that it had only agreed to an annual volume of 34,000 t on the condition that each of the other manufacturers would carry out an independent audit for the 1992 figures. Since auditors other than those currently employed by the manufacturers were not acceptable to ADM, Ajinomoto and Kyowa, Sewon insisted on 37,000 t. ADM warned of pressure on prices unless Sewon curtailed sales.

(135) The participants then discussed regional prices. For Europe, a minimum price of 5.10 DEM / kg was agreed from May 25th of that year. It was believed that these prices could be held until the next meeting.

- Follow-up

(136) At an internal meeting in St. Louis in late May / early June 1994, ADM set its sales targets and target prices. The European sales department was imposed to adhere to a target price of 5.10 DEM / kg.

(137) On the occasion of an official meeting of Fefana, ADM Ingredients, Eurolysine, Kyowa Europa and Cheil met unofficially on June 16, 1994 in Düsseldorf. Eurolysine explained the market situation in Europe including the prices for each individual country. After it was found that the prices had fallen below 4.70 DEM / kg, it was agreed to keep the price level of 5.10 DEM / kg.

(138) Eurolysine and Sewon Europa met on 30 June 1994 and Eurolysine provided explanations for the meeting in Düsseldorf on 16 June. Sewon found that real market prices had always fallen after the announcement of price increases, as Eurolysine had only announced its price increases after receiving orders from large customers at the old price. Sewon concluded from this that the price at the time could not be increased. Views on the market situation in different countries were also exchanged.

(139) On July 19, 1994, at the invitation of Eurolysine, which had simulated a Fefana agenda, ADM Ingredients, Eurolysine, Sewon Europa and Cheil met at the Hyatt Regency Hotel. It was agreed to keep the following prices per kilogram for each country until the end of the year: Germany 5.10 DEM, France 17.50 FRF, Belgium 105 BEF, the Netherlands 5.70 NLG, United Kingdom 2.10 GBP, Spain and Portugal 430 ESP (at least 425), Italy 5200 ITL and Austria 36 ATS. It was also agreed to coordinate the approach towards certain customers to whom individual suppliers had difficult access. American imports into Europe at a price of around DEM 4.60 and the effects of the low dollar exchange rate were also mentioned.

i) Meeting on August 23, 1994 in Sapporo

(140) The meeting took place at the Hiroshima Prince Hotel in Sapporo with the participation of Ajinomoto / Eurolysine, ADM, Kyowa, Sewon and Cheil. Eurolysine had invited the other manufacturers to a simulated meeting of a Fefana working group.

(141) The participants discussed and analyzed the sales figures reported to Ajinomoto in relation to the sales targets agreed at the Tokyo meeting of 8 December 1993.

(142) The Sewon allocation for 1994 was again discussed. Ajinomoto assumed that Sewon's quota of 37000 tonnes was limited to 1994 and could not be the basis for the 1995 allocation. Sewon replied that it had no intention of entering into further negotiations on sales volumes if its allocation for 1995 was not 50,000 t. As the quantity requested by Sewon was beyond the expectations of the other companies, the meeting was interrupted for consultation purposes.

(143) After the resumption of the meeting, ADM threatened the other participants with a new price war and foresaw considerable difficulties for Sewon not only in the overseas markets but also in the Korean market. Kyowa reminded the rest of the attendees that cooperation and mutual effort could keep prices high. Kyowa asked Sewon if they intended to start a new price war. Sewon replied that it could work with the rest of the companies not on production volumes but on pricing. It was concluded from this that Sewon could in future act as an observer, but not as a participant in the volume allocation scheme. It was decided to clarify this issue at a management meeting.

(144) Current and future pricing strategies and market developments for each region were then discussed. With regard to Europe it was decided not to increase the price because of the appreciation of the German market against the US dollar.

- Follow-up

(145) On September 7, 1994, ADM Ingredients, Eurolysine, Sewon Europa and Cheil met at the Hotel Frankfurter Hof in Frankfurt am Main. After reviewing the results of the Sapporo meeting on August 23, 1994, ADM Ingredients, Eurolysine and Cheil raised concerns about Sewon's sales volume claim. In addition, the sales figures were discussed and analyzed in relation to the agreed sales volumes. ADM Ingredients proposed reducing the total sales volume for 1994 in Europe from 91,400 tons to 80,000 tons. Eurolysine joined the proposal as demand in Europe declined mainly due to the availability of cheap soybean meal. Cheil and Sewon Europa were against the proposal, however, as they considered 80,000 tonnes to be too small a quantity for the European market. The participants finally agreed on the following kilo price of lysine: United Kingdom from GBP 2.10 to GBP 2.25, Spain at least DM 5.10 to 5.20, other countries between DM 5.00 and 5.10.

(146) On October 13, ADM and Ajinomoto met at the Four Seasons Hotel in Chicago. They discussed Sewon's announcement that it would expand the capacity of its lysine plant in 1995. Ajinomoto informed ADM that it has stopped reporting its sales to Sewon.

j) Meeting on October 26, 1994 in Zurich

(147) Representatives from Ajinomoto / Eurolysine, ADM, Kyowa, Sewon and Cheil met at the Grand Hotel Dolder in Zurich.

(148) Contrary to the agenda, Sewon was asked at the beginning of the Ajinomoto meeting whether the volume strategy it had announced at the Sapporo meeting on 23 August 1994 had changed and what its sales target for 1995 was. Sewon replied that its sales target remained unchanged at 50,000 t. Ajinomoto then made a proposal for the allocation of quantities, which all participants except Sewon agreed. Sewon could not accept this proposal as it had set itself a sales target of 50,000 tonnes and a market share of 20% for 1995. It informed the other participants that its price estimate for 1995 was USD 2.20 / kg. The other participants replied that if Sewon insisted on increasing sales, they would also increase their sales. ADM also threatened to increase its sales in the Korean market from 1,000 tons to 5,000 tons annually if Sewon insisted on increasing its global sales to 50,000 tons. ADM specifically considered lowering the standard lysine price to $ 1.30 / kg to force Sewon's return to the negotiating table. ADM added that Sewon is the financially weakest company that could easily be targeted for an acquisition. Kyowa also suggested buying it up in the event Sewon insisted on a capacity of 50,000 tons. It also asked who is the company's second largest shareholder. Sewon suggested discussing prices without further volume negotiations. The other participants opposed this proposal, since price negotiations without a prior agreement on quantities are meaningless. The meeting was dissolved after ADM left it.

- Follow-up

(149) On November 23 and 24, 1994, Ajinomoto and Sewon met in Seoul to clarify the situation after the October 26 meeting in Zurich and to prepare for the next meeting. Sewon explained that it is building a new plant for the Chinese market and that it intends to increase its capacity to 50,000 t by 1995/96, so that, in view of these investments, it cannot agree to the 39,000 t proposed sales volume in Zurich. However, it was agreed that Sewon would continue to work with its competitors on pricing. Sewon also agreed to keep its 1994 production at 37,000 tonnes and to submit monthly sales reports for the following year (at that point Ajinomoto had received the August and September reports).Ajinomoto reported the results of this meeting to ADM, Kyowa and Cheil.

(150) On December 1, 1994, ADM Ingredients, Eurolysine, Kyowa Europe and Cheil met unofficially at an official Fefana meeting in Amsterdam. Information on prices and sales volumes was exchanged and the opinion was expressed that there was no reason in Europe for a price lower than the American one, which is why a European price of DEM 4.90 / kg was justified. The participants agreed to set 4.90 DEM / kg as the offer price and 4.80 DEM / kg as the minimum price. They also agreed to keep deliveries as low as possible at the existing price of DEM 4.40 to 4.50.

(151) On 6 December 1994, ADM Ingredients, Eurolysine and Sewon Europa met in Frankfurt am Main to explain to Sewon the price talks from the meeting in Amsterdam on 1 December. Actual sales from January to September, expected sales by the end of December and the volumes allocated for Europe were also discussed. Sewon Europe was basically not interested in price reductions, but was interested in maintaining the agreed prices, which had become meaningless after Eurolysine had sold the product at a lower than the agreed price. Unless Eurolysine changed its behavior, Sewon would sell at any price it could. Sewon would only meet the agreed prices if they were in line with market conditions. As a pattern of conduct, Sewon Europe suggested that all manufacturers should stop deliveries in Spain for two weeks and resume sales after the agreed price had been reached by the market itself. Eurolysine and ADM Ingredients informed Sewon Europa that they had announced the agreed new price that day.

(152) Ajinomoto and Sewon met again in Seoul on December 12, 1994 to continue their November 23, 1994 talks. Ajinomoto stated that that year all manufacturers kept in touch with each other and agreed with the prices obtained. It warned Sewon not to start a price war, because then everyone involved would certainly suffer losses. Therefore, Sewon would need to find points that all participants could agree on. Sewon insisted on getting a market share of 20% and sales of 50,000 tons in 1995. In the end, however, it was ready to reduce its sales volume to 46,000 t. Ajinomoto proposed that Sewon reduce its sales volume to 40,000 t and that it itself buy the excess quantity of 6,000 t from Sewon to sell under its own name. Sewon rejected this offer and insisted on sales of 46,000 t. Still, it promised to keep its price at the price of Ajinomoto.

k) Meeting on January 18, 1995 in Atlanta

(153) On January 18, 1995, representatives from Ajinomoto / Eurolysine, ADM, Kyowa, Sewon and Cheil met in Atlanta.

(154) The participants compared the production quotas allocated for 1994 with the sales volumes actually achieved that year. They concluded that the difference between the allocated quantities and the actual sales of each company was not significant and that the price level could therefore be maintained. It was also decided to allocate sales volumes on the basis of the market size assumed for 1995. The participants agreed to the market shares allotted for 1994, i. H. Ajinomoto 33%, ADM 27%, Kyowa 19%, Sewon 14% and Cheil 7% while Sewon demanded a higher market share.

(155) All participants including Sewon agreed to proceed with reporting monthly sales to Ajinomoto.

(156) It was also agreed to fix the European lysine price from DEM 4,50 / kg to DEM 4.90 / kg with a minimum price in exceptional cases of DEM 4.80 / kg.

- Follow-up

(157) On 30 January 1995 the European representatives of the amino acid manufacturers met, apparently to review the prices for the first quarter of 1995. Kyowa was notified of the results by phone.

(158) On March 9, 1995, on the occasion of the official Fefana meeting in Basel, ADM Ingredients, Eurolysine, Sewon Europa and Cheil met unofficially at the Hilton Hotel. The purpose of the meeting was to adjust prices for the second quarter of 1995 in view of the weakening dollar and its stronger Deutsche Mark. Participants anticipated a steady decline in prices given increased imports from the US, where the price was $ 2.64 / kg. In view of this development, the following prices per kg were agreed: United Kingdom 1.95 to 2 GBP, Spain 4.10 DEM, Italy 5200 to 5300 ITL, France 15.70 to 16 FRF, other European markets 4.40 to 4.50 DEM . A discussion broke out between Sewon and ADM about supplying their respective customers in the UK.

l) Meeting on April 21, 1995 in Hong Kong

(159) The meeting took place at the Regent Hotel in Hong Kong, attended by representatives from Ajinomoto / Eurolysine, ADM, Kyowa, Sewon and Cheil.

(160) The participants compared the quotas allocated for 1994 and the months of January to March 1995 with the actual sales figures for that period. Because Sewon had increased its sales beyond its 1995 share, there were strong protests from the other companies. Sewon reiterated that nothing would be changed in its target quantity. Ajinomoto and Kyowa urged Sewon to reduce its sales volumes, otherwise the market price would fall. Sewon replied that regardless of their increased sales volumes, the market price had fallen.

(161) Regional sales prices were also discussed. For Europe, a reduction of the previously agreed price from DEM 4.80 / kg (meeting on January 18, 1995) to DEM 4.50 / kg was agreed. The intention was to discuss the price again at a European sales force meeting.

(162) It was reported that in Europe the premixers had resold lysine, causing prices to fall. Ajinomoto demanded that the re-export of the product originally imported by dealers from other regions should be blocked. It also called on Sewon to prevent its Canadian distributor from selling lysine in regions outside of Canada.

(163) Finally, it was agreed that Kyowa would organize the next meeting, scheduled for 7 July 1995 in the Cayman Islands.

- Follow-up

(164) On April 27, 1995, ADM Ingredients, Eurolysine, Kyowa Europe, Sewon Europe and Cheil met at the Sofitel Hotel in Brussels. Participants compared their sales figures for Europe (including Africa and the Middle East) for the first quarter of 1995. Sewon, which was asked to report its figures on a regular basis, estimated sales volume. The remaining participants complained about an increase in Sewon's sales volumes. As a result, the price discussion from the April 21, 1995 meeting in Hong Kong was discussed. The prices for Europe were then discussed in detail and it was decided to set a minimum price of 4.25 DEM / kg converted into each individual currency. These prices should apply to deliveries from April 27th to the end of June. Then a price of 4.50 DEM should be announced. An agreement was reached on the declaration to be given to the buyers. It was also agreed not to include a most-favored nation clause in the sales contracts. The next meeting of European representatives was scheduled for May 19, 1995 in Utrecht.

(165) On May 23, 1995, ADM Ingredients, Eurolysine, Kyowa Europa, Sewon Europa, and Cheil met at the official meeting of the Fefana Environmental Protection Working Group. The participants exchanged information on the prices and quantities applied by each manufacturer in different European countries. The new price to be applied for Europe from the Monday after the meeting was set at 4.25 DEM / kg. This DEM price was converted into the individual European currencies. All participants promised to keep this price level. A suggestion was made to divide the customers among the manufacturers.

(166) On June 27, 1995 the FBI searched the offices of ADM, the Heartland Lysine Plant in Ajinomoto and Sewon America.

F. THE COMMISSION PROCEDURE

(167) In July 1996, immediately following the publication of the Notice of Failure to and Reduction of Fines in Antitrust Matters (5) ("the Notice"), Ajinomoto offered the Commission its full cooperation under that Notice in order to investigate the existence of a cartel on the lysine market and its impact in the EEA. Subsequently, it repeatedly submitted relevant documents, information and evidence.

(168) On 11 and 12 June 1997, the Commission carried out investigations ordered by decision of two European subsidiaries of ADM and of the premises of Kyowa Europa. ADM issued a press release regarding the investigations carried out at its subsidiaries.

(169) Immediately after the inspections carried out at ADM and Kyowa, Sewon Europa and the European sales office of Cheil received a telephone call from the Commission of the initiation of proceedings under Article 81 of the EC Treaty and Article 53 of the EEA Agreement, respectively.

(170) A few days after the inspection on its premises, Kyowa indicated its willingness to cooperate with the Commission. After clarifying the conditions for a possible cooperation, Kyowa submitted business documents. In the following, his representatives orally explained the course of the meetings and other contacts between the lysine manufacturers. Kyowa also provided further information below.

(171) On 28 July 1997, the Commission sent requests for information pursuant to Article 11 of Regulation No 17 to ADM, ADM Ingredients, Sewon, Sewon Europa and Cheil regarding their conduct in certain amino acid markets and requested business documents relating to the cartel meetings referred to in the request .

(172) After receiving the request for information, Sewon indicated its willingness to cooperate with the Commission. It provided the minutes of the meetings between the lysine manufacturers and other information not requested by the Commission. Sewon also provided further information below.

(173) Cheil replied that there was no complete or precise documentation on the meetings specified by the Commission in its request. However, it had interviewed every single employee who had attended the meetings to determine the details of the conversation. Cheil also provided details of the meetings that were not requested by the Commission.

(174) After ADM and ADM Ingredients had not replied to the Commission's request for information within the deadline set, both companies were reminded by letter of 14 October 1997 that the Commission had not received the information requested. In the letter, the Commission expressly stated that the delays in responding to the request for information were hampering the course of the investigation.

(175) Finally, on October 24, 1997, ADM Ingredients replied to the request for information on lysine, but did not provide any information on other amino acids. There was no reply from ADM.

(176) On 29 October 1998 the Commission opened proceedings in this case and notified the objections to the companies to which this Decision was addressed. All companies made written comments in response to the Commission's statement of objections. A hearing was held on March 1, 1998. An additional statement of objections was issued by the Commission on 16 August 1999.

G. THE LYSINE STUDY IN THE UNITED STATES

(177) On June 27, 1995, after more than two years of clandestine investigations, the FBI raided the offices of ADM, Ajinomoto's Heartland Lysine Plant, and Sewon America.

(178) In August and October 1996, the parties were accused by the American authorities of having, in a concerted manner, suppressed and eliminated competition by fixing the prices and allocating sales volumes for lysine. The accused signed pledges to pay fines. ADM then paid a record $ 70 million fine (out of $ 100 million including a cartel on citric acid). Ajinomoto and Kyowa signed pledges to pay fines of $ 10 million each and Cheil to pay a fine of $ 1.25 million. With regard to Sewon, only the Sewon America subsidiary was included in the proceedings.

(179) On November 4, 1992, the former President of ADM's Bioproducts Division, who was with ADM during that period, began working with the FBI. He promised to follow all instructions from the FBI officers. He is currently serving a nine-year prison sentence for stealing nearly $ 10 million from ADM.

(180) On July 9, 1999, a US court sentenced the former vice director of ADM and two former senior executives to prison terms and fines for their involvement in the cartel that is the subject of these proceedings.

H. THE LYSINE STUDY IN CANADA

(181) On 27 May 1998 the Canadian authorities announced that ADM had admitted to participating in concerted practices to fix prices and share markets and was fined CAD 16 million. Ajinomoto was also fined $ 3.5 million and Sewon was fined $ 70,000. Since Cheil had not sold lysine during the period in which the incident occurred in Canada, it was not covered by the Canadian authorities' proceedings. An exemption was granted for Kyowa.

II. LEGAL ASSESSMENT

A. JURISDICTION

(182) This proceeding concerns agreements that have been made inside and outside the EEA by companies established inside and outside the EEA. In accordance with the permanent jurisdiction of the Court of Justice of the European Communities and the Court of First Instance of the European Communities, direct sales to customers in the EEA territory by manufacturers established outside the EEA who enter into price competition in order to win orders from these customers create competition in the common market . It follows that agreements between these manufacturers on prices and the allocation of sales volumes implemented in the EEA have the object and effect of restricting competition in the common market within the meaning of Article 81 (1) of the EC Treaty and Article 53 of the EEA Agreement (Judgment in Joined Cases 89, 104, 114, 116, 117, 125 to 129/85, Ahlström) (6).

B. ARTICLE 81 OF THE EC TREATY AND ARTICLE 53 OF THE EEA AGREEMENT

(183) The Commission takes the view that the companies covered by this Decision have infringed Article 81 of the EC Treaty and Article 53 of the EEA Agreement by fixing lysine prices through agreements in the EEA, controlling supply and allocating sales volumes to each other and exchanged information on their sales volumes in order to monitor the agreed allocations of their sales volumes.

1. Article 81 paragraph 1 or Article 53 paragraph 1

a) Company

(184) The companies covered by this Decision are companies within the meaning of Article 81 (1) of the EC Treaty and Article 53 (1) of the EEA Agreement.

b) Agreements

(185) According to the case law of the European Court of Justice, it is already an agreement within the meaning of Article 81 (1) of the EC Treaty and Article 53 (1) of the EEA Agreement if the companies concerned have jointly announced their intention to enter the market in a proceed in a certain manner (judgment in Case 41/69, ACF Chemiefarma (7) and Joined Cases 209/78 to 215/78 and 218/78, Heintz van Landewyck (8)). The participation of a company in meetings that concern anti-competitive activities, unless there is evidence to the contrary, is evidence of participation in such activities (judgments in Cases T-14/89, Montedipe (9) and T-141/94, Thyssen (10)).

- Agreements on prices

(186) In July 1990 Ajinomoto, Kyowa and Sewon agreed to increase the world price of lysine (paragraph 52); in September 1990 Ajinomoto, Kyowa, and Sewon et al. fixed the European price at DEM 4.60 / kg (paragraph 53).

(187) In the first half of December 1990 Ajinomoto, Kyowa and Sewon set the European price at DEM 4.80 / kg (paragraph 54).

(188) On 18 February 1991 Ajinomoto, Kyowa and Sewon fixed the European price at DEM 4,70 / kg (paragraph 56).

(189) On 12 March 1991 Ajinomoto, Kyowa and Sewon agreed to maintain the price of lysine in Europe at DEM 4.70 / kg (paragraph 61).

(190) On 4 July 1991 Ajinomoto, Kyowa and Sewon fixed the European price at DEM 4.30 / kg (paragraph 64).

(191) Ajinomoto, Kyowa, and Sewon then continued their discussion of the price of lysine.

(192) Ajinomoto and Kyowa agreed on 10 March 1992 to follow ADM's prices in order to maintain their market shares (paragraph 65).

(193) During a meeting apparently held at the end of March 1992 that Sewon Europa announced to its top management in Korea on Jan.March 1992 reported, Ajinomoto, Kyowa and Sewon agreed to keep the European price at 3.76 DEM / kg (paragraph 66).

(194) At the end of April / beginning of May 1992, Ajinomoto, Kyowa and Sewon reaffirmed their price agreement reached at the end of March 1992 (paragraph 67).

(195) On June 23, 1992, ADM, Ajinomoto and Kyowa set the world market price for lysine at a level they intended to maintain until the end of that year. The cartel participants agreed that the European price of lysine could be slightly higher than the North American price; H. USF 1.05 / lb by October and USF 1.20 / lb by the end of the year (apparently set at DEM 3.50 / kg and DEM 3.75 / kg as mentioned at the October 1, 1992 meeting). This agreement was contingent on a volume agreement with ADM. ADM had applied for a sales volume of 48,000 t for 1992 (paragraph 73). Ajinomoto, Kyowa and Sewon agreed to the sales volumes requested by ADM (meetings of 10 July and 7 August 1992), with which ADM was satisfied (noted at the meeting of 2 November 1992 between Ajinomoto and Sewon). Cheil and Sewon entered into this price agreement on August 24, 1992 (paragraph 79).

(196) On 1 October 1995 the producers set the price of lysine at DEM 4.00 / kg (paragraph 82).

(197) On November 2, 4 and 5, 1992, ADM, Ajinomoto, Sewon and Cheil agreed a lysine price for Europe of DEM 4,25 / kg (paragraphs 87, 89 and 90). This price fixing was prepared by the talks between Ajinomoto and Kyowa on October 29, 1992, so Kyowa was also included in this agreement (section 86).

(198) On June 1, 1993, ADM informed Kyowa that it had stopped reducing the price of lysine and that the new standard price would be USD 0.81 / lb. On the basis of this price, the Asian producers set the European price at DEM 3.20 / kg on June 18, 1993 (paragraph 104). On June 24, 1993, all five lysine manufacturers confirmed the price agreement and considered a new incremental price increase (paragraph 107).

(199) On 5 October 1993 the five producers set the European price at DEM 5.30 / kg as a result of the flooding of the Mississippi, which had destroyed the American soybean harvest (paragraph 114). This price was confirmed at the meeting on December 8, 1993 (paragraph 120).

(200) On 10 March 1994 all five producers set the European price of lysine at DEM 5.20 / kg (paragraph 130).

(201) On 19 May 1994 the five lysine producers set the European base price at DEM 5,10 / kg (paragraph 135). ADM, Ajinomoto, Kyowa and Cheil confirmed this June 16, 1994 agreement (paragraph 137). On June 30, 1994, Ajinomoto notified Sewon of the confirmation of the agreement. On 19 July 1994 ADM, Ajinomoto, Sewon and Cheil agreed to maintain a price of DEM 5.10 / kg until the end of 1994 (paragraph 139). All five lysine manufacturers reaffirmed this agreement on August 23, 1994 (paragraph 144).

(202) On 7 September 1994 ADM, Ajinomoto, Sewon and Cheil fixed the price of lysine in Europe at between DEM 5 and DEM 5,20 / kg (paragraph 145). Sewon confirmed on November 23, 1994 that it would hold that price (paragraph 149).

(203) On 1 December 1994 ADM, Ajinomoto, Kyowa and Cheil set the minimum offer price in Europe at DEM 4.80 / kg (paragraph 150). On December 12, 1994, Sewon agreed to this price level (item 152).

(204) On January 18, 1995, all five producers agreed a European target price of DEM 4.90 / kg with a minimum price of, exceptionally, DEM 4.80 / kg (paragraph 156).

(205) On 9 March 1995, ADM, Ajinomoto, Sewon and Cheil set the European price at between DEM 4,40 and 4,50 / kg (paragraph 158). All five manufacturers confirmed this price on April 21, 1995 (paragraph 161).

(206) On 27 April 1995 the five lysine producers set the minimum price for Europe at DEM 4,25 / kg and the target price at DEM 4,50 / kg (paragraph 164). All five manufacturers confirmed this minimum price on May 23, 1995 (paragraph 165).

(207) It can be concluded from this that, from July 1990 at least, Ajinomoto, Kyowa and Sewon repeatedly announced their joint intention to apply certain sales prices in the EEA, thereby establishing agreements within the meaning of Article 81 (1) of the EC Treaty and Article 53 (1) of the EEA - Have made an agreement. ADM entered the lysine manufacturers' pricing agreements on June 23 and Cheil on August 27, 1992.

(208) The Commission has no evidence that, after the FBI searches began on 27 June 1995, the companies covered by this decision entered into further pricing agreements.

(209) ADM considers that the Commission's files do not show that the start of ADM's involvement in the infringement coincided with the meeting of representatives of ADM, Ajinomoto / Eurolysine and Kyowa on 23 June 1992. It claims that no agreement was reached at the time to include ADM in the cartel. In addition, the price agreement reached at the Mexico City meeting was contingent on a volume allocation agreement. In his view, the final agreement could not have been reached until December 8, 1993 (that is, at the Tokyo meeting).

(210) In this regard, it should be noted that agreements that are made dependent on a condition are nevertheless "agreements" within the meaning of Article 81 (1) of the EC Treaty and Article 53 (1) of the EEA Agreement. ADM's approval of the prices discussed at the Mexico meeting, which was a prerequisite for the approval of the other producers to an allocation of 48000 tonnes, must therefore be regarded as such an agreement. In addition, this agreement was not linked to any other conditions. On June 23, 1992, Ajinomoto / Eurolysine and Kyowa agreed to the volume allocation required by ADM. ADM then confirmed its approval of the allocation on July 2, 1992, and Sewon on August 7, 1992. At around the same time, Cheil agreed to limit its own sales as well (memo at the November 2, meeting between Ajinomoto and Sewon 1992). The condition that the price agreement of 23 July 1992 was unconditional is therefore fulfilled.

- Agreements on sales volumes

(211) The minutes of the meetings of February 18 and March 12, 1991 show that Ajinomoto, Kyowa and Sewon agreed to put the same quantities on the world market in 1991 as in 1990 (paragraphs 58 and 61 ). There was at least an understanding between the participants that in 1991 Sewon's sales volumes in Europe should be the same as in 1990. In addition, Ajinomoto, Kyowa and Sewon agreed on the domestic market principle for at least 1991, according to which manufacturers should increase their sales should be restricted as far as possible to their own region. The "domestic manufacturer" in Europe was Ajinomoto / Eurolysine.

(212) This conclusion is based on the fact that, at the meetings of 18 February 1991 and 19 June 1992, Kyowa and Ajinomoto insisted on this principle, which Sewon had also agreed to (paragraphs 56 and 68).

(213) On 23 June 1992, ADM, Ajinomoto and Kyowa agreed to the proposal to coordinate worldwide sales of lysine (paragraphs 73 and 74). On July 10, 1992, the two Korean lysine manufacturers agreed to coordinate their sales with ADM (paragraph 77).

(214) On 10 July 1992 Ajinomoto and Kyowa proposed to the Korean producers a sales allocation plan for 1992 with a quota of 48000 tonnes for ADM (paragraph 77). On July 2, 1992, ADM had already approved its 1992 sales volume (paragraph 76; confirmed at the September 8, 1992 meeting, paragraph 77). At the August 7, 1992 meeting, it became clear that Sewon agreed to the ADM quota agreement (paragraph 78). Sewon confirmed its consent at the November 2, 1992 meeting (paragraph 87). It also agreed to limit its sales in Europe to 6,000 t. Cheil was not ready to agree to an individual allocation of the sales volumes, but was willing to coordinate the sales volumes within the overall plan and to limit the sales (mentioned in the meeting of 2 November 1992 between Ajinomoto and Sewon, paragraph 87).

(215) Negotiations on an agreement on the individual allocation of sales volumes for 1993 began on 21 January 1993. Although the parties continued their efforts in the summer of that year, they did not reach an agreement on the individual allocation of sales volumes. However, on October 5, 1993, all five lysine manufacturers agreed to reduce supply to prevent prices from falling. A decrease of 40 to 50% was envisaged for Europe (paragraph 114).