Inquiry Targets Monsanto

The Justice Department is seeking information from seed giant Monsanto Co. regarding the company’s dominance in the market for genetically modified seed, a company spokesman told the St. Louis Post-Dispatch on Oct. 9.

According to the Post-Dispatch, Monsanto spokesman Lee Quarles declined to discuss specifics of the inquiry, including what information is being sought. Monsanto is complying with the request for information, which was received about two months ago, he said.

“We’re cooperating and openly providing documents to respond to all of these questions,” Quarles said.

Monsanto categorized the request from Justice Department as an informal inquiry, not a formal demand for information.

Justice Department spokeswoman Gina Talamona wouldn’t confirm the inquiry and declined further comment.

The timing of the Justice Department’s questions coincides with plans announced Aug. 5 by U.S. Attorney General Eric Holder and Agriculture Secretary Tom Vilsack for a nationwide series of workshops to be held next year to hear farmers concerns about competition issues affecting the agriculture industry, according to the Post-Dispatch.

The Post-Dispatch noted that two days after that announcement, Philip Weiser, a deputy assistant attorney general, said during a speech in St. Louis that the Justice Department was committed to examining competition in agriculture, including the sale of genetically modified seed.

“Farmers today increasingly turn to patented biotechnology that is used to produce seeds resistant to herbicides and insects,” he said in the speech. “At the same time, this technological revolution and accompanying market developments have facilitated the emergence of large firms that produce these products, along with challenges for new firms to enter this market.

This isn’t the first time antitrust investigators have sought information from Monsanto. In 2007, the Justice Department required Monsanto and Delta & Pine Land Co. to divest a seed company, cottonseed lines and other assets before allowing them to merge.

Monsanto was also required to amend terms of its trait license agreements with other cottonseed companies to allow them to stack, or combine, non-Monsanto traits with Monsanto traits.

The company is in the midst of a legal battle with its chief rival,DuPont, the parent of Iowa-based Pioneer Hi-Bred International Inc., which has claimed Monsanto is engaging in anti-competitive behavior by not allowing it to stack its own herbicide tolerance trait with Monsanto’s Roundup Ready trait.

Monsanto, which initiated the lawsuit, claims DuPont’s efforts to stack the traits constitute patent infringement.

Meanwhile, Iowa Attorney General Tom Miller has begun an inquiry into possible antitrust violations by Monsanto. Monsanto said it will respond to the civil investigative demand by providing information on its seed, trait and chemistry licensing and marketing programs to Miller’s office.

Miller’s office said in a written statement on Oct. 8 that it is seeking information on the business practices of Monsanto.

Quarles said it’s not uncommon for regulators to initiate an inquiry whenever a rival alleges anti-competitive behavior.

“Any time a company would make an antitrust allegation against one of its competitors, I think the agency would find it prudent to explore and ask questions,” Quarles said.

(Source: St. Louis Post-Dispatch)

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