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Talk about - how we slept! How did we let this happen?

China’s grip on key food additive
Vitamin C prices have spiked this year. China controls 80 percent of the market. By Ron Scherer and Peter Ford | Staff writers of The Christian Science Monitor New York and Beijing

China, which exports more than 80 percent of the world’s ascorbic acid – also known as vitamin C and a key food preservative – appears to have cut production over the past several months, pushing prices up by more than 200 percent to a four-year high.

Why do we let anyone control 80 percent of anything?

…Only one Western company, DSM of the Netherlands, still makes ascorbic acid, concentrating production in Scotland since shutting down its US plant two years ago. Chinese firms have driven all other competitors out of business.

“They have virtually captured the lot, unbeknown to most people,” says Leo Hepner, a London-based management consultant to the food and pharmaceutical industry. “It puts us in a very difficult situation if, say, they stopped making it.”

You think? We have only ourselves to blame.

Ironically, the Chinese became the dominant exporters of vitamin C only after the US Department of Justice charged six Western companies with price fixing in 1999.

The so-called “vitamin cartel,” which supplied 75 percent of the world’s vitamins, was convicted and ordered to pay $1.5 billion in fines and restitution. Some executives received jail sentences. One of the largest fines was against Hoffmann-LaRoche of Switzerland. It eventually sold its vitamin subsidiary to DSM.

Couldn’t we have done something besides run them out of business?

And the real kicker -

The Chinese may also have cost pressures. One of the base materials for ascorbic acid is corn-based. The US cash price of corn is up 44 percent this year, a result of increased use for ethanol. Corn starch is used to make a form of glucose, some of which China imports to make vitamin C. China imports some of this base material. “The Chinese are not insulated from it [the price rise],” says Mr. Hepner.

What a mess we have created.