Bridges Trade BioRes • Volume 10 • Number 1 • 22nd January 2010
Monsanto Accused of Unfair Business Practices
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Multinational giant DuPont submitted a report to US regulators earlier this month, calling for close scrutiny into the practices of its chief agribusiness rival and seed industry leader Monsanto. In the 18 page document – submitted on 8 January to the US Departments of Justice and Agriculture – DuPont, which owns Pioneer Hi-Bred International, claimed Monsanto is using monopoly powers to thwart competition, raise prices, and undercut innovation.
DuPont argues that Monsanto has a monopoly in corn and soybean traits that helps crops ward off pests and withstand applications of weed-killing agents, like Monsanto’s RoundUp. Last year, it is estimated that 93 percent of US soybean plantings involved seeds with the RoundUp Ready trait. Additionally, DuPont says Monsanto controls 79 percent of the corn market and 60 percent of the corn and soy germplasm licensed in the US “The ag biotech trait market is firmly in the grip of a single supplier, acting as a bottleneck to treatments, competition, and choice,” the DuPont report reads.
Monsanto maintains that “no single company has a dominant share of seed sales in corn, soybean or cotton.” Monsanto’s own report filed last month stated: “We’re confident an objective review will reveal competition is alive and flourishing in the seed market”. Monsanto has said that it is cooperating with the ongoing investigation by the US Department of Justice by providing “millions of pages of documents.”
DuPont’s recent allegations come as the latest round of tensions between the two competitors, after Monsanto last May sued DuPont for combining specific genetic traits developed by Monsanto with its own product. As recently as 19 January 2010, Monsanto received a favourable ruling when a US federal court found DuPont in violation of its licensing agreement. However, DuPont, which counter-sued Monsanto last June, claimed its rival was illegally quashing competition, said the rulings were “narrow,” and vowed to press on with its anti-trust allegations.
“We’re going to move ahead because the case isn’t over yet,” stated DuPont spokesman Doyle Karr. Top officials at DuPont emphasised that the ruling does not affect the related ongoing formal antitrust investigation against Monsanto by the US Department of Justice.
As of late last week, the US Justice Department was formally requesting information about Monsanto’s soybean genetic traits business. Some rivals and seed distributors have complained recently that the company is limiting access to its first generation, lower-priced RoundUp Ready beans in order to push its newer RoundUp Ready 2 Yield soybeans. The investigation was seeking confirmation on whether the initial generation of RoundUp Ready beans would be available to other seed makers to make generic versions.
The US Department of Justice declined to comment on the ongoing case, saying only that it “is investigating the possibility of anticompetitive practices in the seed industry”.
The allegations submitted by DuPont come ahead of a public hearing this March on competition and antitrust in the seed industry.
ICTSD Reporting; “DuPont urges U.S. to curb Monsanto seed monopoly,” REUTERS, 8 January 2010; “Monsanto says DOJ wants seed access details,” REUTERS; 14 January 2010; “Antitrust Questions for Monsanto,” NEW YORK TIMES, 14 January 2010; “Monsanto claims victory in seed fight with DuPont,” REUTERS, 19 January 2010; “Monsanto’s Legal Wins Are Just the Beginning,” THE MOTLEY FOOL, 19 January 2010.
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