Antitrust Enforcers Probe Business Practices Surrounding Biotech Soybean Seed
By SCOTT KILMAN And THOMAS CATAN
The U.S. Justice Department has opened a formal antitrust investigation into crop-biotechnology giant Monsanto Co. as it contends with the loss of patent protection on its blockbuster soybean in 2014.
Monsanto on Thursday received a formal demand from the Justice Department for information about the St. Louis company’s business practices surrounding its Roundup Ready soybean, the nation’s most popular genetically-modified crop.
Roughly 90% of all the soybeans grown in the U.S. contain a Monsanto gene that helps the plant survive dousing by Monsanto’s Roundup weedkiller. Introduced in 1996, the Roundup Ready soybean seed allows farmers to chemically remove weeds from their fields without damaging crops.
With that seed losing patent protection in four years, Monsanto is trying to get farmers to switch to a second generation of Roundup Ready seed that still will be protected.
Justice Department spokeswoman Gina Talamona confirmed Thursday that antitrust regulators have begun a formal investigation of the seed industry. She refused to identify the investigation’s target or provide specific details.
In the wake of Monsanto’s disclosure, the company’s shares fell $1.16, or 1.4%, to $82.79 in 4 p.m. composite trading on the New York Stock Exchange.
Controversy over Monsanto’s plans for Roundup Ready soybeans grew so heated across the Farm Belt last year that the company declared that it wouldn’t stand in the way of farmers using off-patent seeds.
“We’re confident that a thorough review will show that all of our business practices are fair, pro-competitive and in compliance with the law,” Monsanto spokesman Lee Quarles saidThursday.
Monsanto has been in regulators’ sights since the Justice Department said in August it would take a hard look at economic concentration in agriculture as part on an increased emphasis on antitrust enforcement.
Farmers and seed companies that license genes from Monsanto have long complained about the prices it can command. The price of a bag of soybean seed has roughly quadrupled since the biotech-era dawned in 1996.
The Justice Department’s inquiry appears to mirror complaints filed this month by Monsanto’s archrival, the Pioneer Hi-Bred seed unit of DuPont Co., for a nationwide series of hearings the Justice and Agriculture departments plan to hold on farmers’ competitive concerns. DuPont, which pays to use Monsanto’s first-generation Roundup Ready technology in the seed it sells to farmers, has complained that Monsanto is trying to force seed companies to prematurely switch to the second-generation technology. “The effect of this campaign would be to eliminate any prospect for the emergence of generic competition,” DuPont has said.
DuPont, of Wilmington, Del., several months ago received a demand for information from the Justice Department for information about the seed market. A DuPont spokesman said the company believes the investigation isn’t aimed at DuPont’s behavior.