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Monsanto sued for alleged glyphosate monopoly

Agriculture.com Staff 09/28/2006 @ 3:24pm

The Monsanto Company is the target of a class-action antitrust lawsuit filed this week in federal court.

Pullen Seeds and Soil, based in Sac City, Iowa, led the group filing Pullen Seeds and Soil v. Monsanto Company, No. 06-599, Tuesday in U.S. District Court in Wilmington, Delaware. Plaintiffs allege the company violated Sections 1 and 2 of the Sherman Antitrust Act, as it allegedly has a monopoly over the glyphosate herbicide marketplace with its Roundup products. Monsanto's patent on Roundup product name expired in 2000.

"During the post-patent period...Roundup has maintained an 80% (or more) market share of all the glyphosate herbicides sold in the United States despite Monsanto's charging dealers 300% to 400% more for brand-name Roundup than the price charged by generic competitors," according to the Pullen v. Monsanto court document filed Tuesday. "Monsanto's ability to charge higher prices for Roundup is the result of a comprehensive anticompetitive scheme which Monsanto began implementing in the 1990s."

In the class-action lawsuit filed Tuesday, Pullen, a licensed grower of Monsanto's soybeans and corn containing glyphosate tolerance and seller of Monsanto seed, is joined by an estimated 100,000 class members around the nation (1,000 in Iowa), according to Iowa State University agriculture law specialist and ag law center director Roger McEowen. But, according to Monsanto spokesman and public affairs manager Andrew Burchett, the anticompetitive practices named in the suit do not exist.

"There are dozens of different brands and formulations of glyphosate available from more than 30 different companies in the United States," Burchett says. "This is far more competition than exists with regard to any other agricultural chemical."

Plaintiffs also allege Monsanto retained product exclusivity "by acquiring seed companies that were developing modified seed technology, eliminating those products that could have led to the development of genetically modified seeds that could be used with non-glyphosate herbicide," according to McEowen.

"These efforts to block the development of competing genetically modified seeds had a direct effect on Monsanto's glyphosate herbicide monopoly because had competing seeds been developed, farmers would have had a choice not only to buy competing seeds, but also to use different types of herbicides instead of glyphosate," according to the court document. "Thus, the development of these competing seeds would have created an increased demand for other non-glyphosate herbicides that would have competed with Roundup.

"This would have dramatically reduced Roundup's market dominance and Monsanto's ability to charge monopoly prices," the document reads.

Also at issue in the Pullen case is the practice of "bundling" crop input products like herbicides with seed. While this is not uncommon in the crop seed industry, it could become a major argument in the case.

"In addition to the exclusive dealing requirements with its seed company licensees, Pullen claims that Monsanto has used various types of bundled rebates to ensure that seed companies produce and sell seed containing Monsanto's seed traits virtually exclusively," McEowen says.

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