OSAKA -- Daicel Chemical Industries Ltd. and Nippon Synthetic Chemical Industry Co. said Friday they have agreed to pay $39.7 million to settle out of court a U.S. antitrust lawsuit over their sales of sorbic acid.
Daicel has agreed to pay $27 million and Nippon Synthetic $12.7 million.
An official at Nippon Synthetic said the two companies, both based in Osaka, agreed to a settlement to avoid a lengthy trial that could be costly.
A group of U.S. food companies filed a class action lawsuit in October in San Francisco against a number of foreign chemical companies, including the two Japanese firms.
The U.S. companies charged that the foreign firms, in violation of U.S. antitrust law, had manipulated the prices of sorbates to maintain their shares in the U.S. market. Sorbates are chemical preservatives used primarily in high-moisture and high-sugar foods such as cheese and baked goods.
Daicel said it will register the payment as an extraordinary loss and cover it with proceeds from the sale of real estate during fiscal 1999. Its earnings projections for the fiscal year will remain unchanged, it said.
Nippon Synthetic said the payment will be registered as an extraordinary loss, forcing the company to post consolidated net losses of 1.2 billion yen, instead of previously projected net profits of 800 million yen.
Concerning the sorbate sales, the U.S. Justice Department in July ordered Nippon Synthetic to pay $21 million in fines for its role in a 17-year international cartel to suppress competition in the food preservatives industry.
The department is still conducting an investigation into Daicel over the price-fixing allegations.