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Chinese drug firms to fight US fine

By Song Shengxia (Global Times)

08:07, March 19, 2013

A Chinese chamber of commerce expressed opposition Monday to a decision by a US court to impose a heavy fine on Chinese drug firms for alleged collusion in raising vitamin C prices in the US.

"This decision failed to recognize the mandatory measures for supervision and administration of the vitamin C industry by the Chinese central government during the transition period of China's economic system," the China Chamber of Commerce for Import & Export of Medicines & Health Products (CCCMHPIE) said in a statement on its website Monday.

The pricing by Chinese vitamin C manufacturers was in compliance with Chinese laws and regulations and the companies should not be punished, the statement said.

A federal court in Brooklyn, New York ruled Thursday that North China Pharmaceutical Group Corp (NCPC) and its affiliate Hebei Welcome Pharmaceutical Co must pay $162 million in fines for colluding to fix the price of vitamin C in the US, trebling the figure the jury had recommended.

In a statement sent to the Global Times Monday, NCPC said the ruling distorted the truth. In order to oppose US trade protectionism, the company will seek to protect its legitimate interests according to the law, the statement said.

NCPC insisted that its pricing was in accordance with Chinese laws to avoid vicious competition among exporters during the period of China's transition from a planned economy to a market economy.

On Saturday, NCPC said in another statement that it would start its appeal procedure as soon as it received the official verdict from the US federal court.

The ruling was the result of a lawsuit filed by US-based Animal Science Products Inc and Ranis Company Inc in 2005, who accused Chinese vitamin C suppliers of having colluded to raise prices and limit production since 2001.

Another three Chinese vitamin C exporters targeted by the lawsuit settled out of court. They paid a total of $34 million in the settlement, according to NCPC.

The case represented the first time that Chinese companies have been targeted in an antitrust lawsuit in the US.

"The US is diversifying its means of trade protectionism by using anti-trust rules to bar Chinese companies from entering its market," Bai Ming, a researcher with the Chinese Academy of International Trade and Economic Cooperation under the Ministry of Commerce, told the Global Times Monday.

"US courts have jurisdiction over the conduct of Chinese exporters in the US. But if Chinese companies prove their pricing conduct was mandated by the State, they should be exempted from the fines," Huang Yong, a professor of antitrust law at the University of International Business and Economics, told the Global Times.

"Chinese companies should also learn lessons from the time-consuming and costly lawsuit and try to study antitrust law to avoid being targeted," Huang said.

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