ADM Faces New Scrutiny Over Pricing, This Time in Europe

Archer-Daniels-Midland Co. said Wednesday that the European Union has launched an investigation into pricing practices there.

The announcement came just two days after four U.S. companies filed suit in San Francisco accusing the agricultural giant of conspiring with others to fix prices for citric acid, an additive used in detergents and beverages.

ADM, based in Decatur, Ill., said in a short statement that the EU’s executive body has launched an investigation into whether ADM, its European subsidiaries and other major manufacturers had fixed prices on certain amino acids, including the muscle-growth ingredient lysine.

The company said the “outcome and materiality of this matter cannot presently be determined.” A spokeswoman did not immediately return a phone call seeking comment.

ADM’s stock fell 87.5 cents to close at $21 per share on the New York Stock Exchange.

The European investigation is a blow to ADM’s recent efforts to put behind it a wide-ranging Justice Department investigation into price fixing of agricultural commodities.

In October 1996, ADM admitted fixing prices for citric acid and lysine and agreed to pay a record $100-million criminal fine.

In March, the company also reached a $30-million settlement with shareholders unhappy with the drop in value of ADM’s stock following the scandal.

Three former ADM executives are scheduled to go on trial in May 1998 for their alleged roles in the lysine price-fixing plot. They have pleaded not guilty.

The new investigation and lawsuit is unlikely to have a serious effect on the multibillion-dollar company’s bottom line but could unsettle investors, said Bonnie Wittenburg, an analyst at Dain Bosworth in Minneapolis.

“It’s disconcerting for shareholders any time you see something like this going on,” said Wittenburg, who has recommended clients hold but not buy new ADM stock.

ADM must also fight a federal lawsuit filed Monday in San Francisco by Procter & Gamble Co., Kraft Foods, Quaker Oats Co. and Schreiber Foods Inc. accusing the firm of overcharging for citric acid between 1991 and 1995.

The four companies bought a total of $350 million worth of citric acid, and all had opted out of a $94-million settlement of price-fixing claims for that ingredient.

P&G; spokeswoman Linda Ulrey declined to comment on the lawsuit.

Bayer’s Haarmann & Reimer Corp. of Germany, Roche Holding’s Hoffmann-LaRoche Inc. of Switzerland and Jungbunzlauer Inc. of Switzerland are also defendants in the lawsuit.

Haarmann & Reimer was fined $50 million in January after pleading guilty to price-fixing charges. Roche Holding and Jungbunzlauer have also pleaded guilty.