Monday, October 30, 2017

Ahhhh, price fixing

Also in this week's C&EN, the remarkable ways that companies manage to boost their profits (article by Marc Reisch)  
...Washington Suburban Sanitary Commission (WSSC), which serves 475,000 Maryland customers just outside of Washington, D.C., filed suit on Oct. 19 in U.S. District Court for the District of Maryland, charging that seven alum makers—including General Chemical, Chemtrade Chemicals, Geo Specialty Chemicals, and Kemira—rigged bids and allocated customers among themselves between 1997 and 2011. 
WSSC says the scheme raised prices it and other U.S. utilities paid for alum through 2016. At least 68 other civil suits based on alum price-rigging allegations have been filed in federal court to recoup costs, WSSC says. Others suing alum makers include the Illinois-American Water Co., which filed its suit in April. In June, the cities of Baltimore and Richmond, Va., which supply water to their residents, also filed suits. 
WSSC is asking the firms named in its suit for $5 million in compensatory damages and additional damage to be determined in a trial. 
The WSSC and other suits follow the U.S. Department of Justice revelation in late 2015 of the price-fixing scheme. At that time, DOJ announced that Frank A. Reichl, a General Chemical sales executive, had pleaded guilty for his role in the scheme. As part of a deal with the government, he agreed to cooperate with prosecutors investigating the conspiracy...
Whenever I think of price fixing cases, I can't help but think about that goofy ADM lysine case. Who knew that the plan to preserve profits extended to alum?  


  1. I moved from one city, located near a particular great lake, to different city and state that was also near that same great lake. However, I was paying about 10-15x as much for water at the new city/state. I'm sure there's more collusion along many utilities to fix prices from manufacturer/supplier level down to the end-user/customer.

  2. Adam Smith was right.

    “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”

    The lysine price-fixing was inspiring. People of different nations came together, cooperated, and mutually benefited. ("Imagine" plays in the background.)

    This is why some think free enterprise is an oxymoron.


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