> Justice Dept. steps up antitrust probe of Monsanto, demands documents on
> biotech seed business
> ST. LOUIS (AP) -- The Justice Department has intensified its antitrust
> investigation into Monsanto Co., demanding internal documents that outline
> marketing tactics of the world’s biggest seed company.
> The demand, disclosed Thursday by Monsanto, formalizes a months long
> investigation into possible antitrust violations at the company, which has
> gained unprecedented power in the multibillion market for biotech seeds. It
> has already provided millions of pages of documents to the department and is
> cooperating with the agency’s civil probe, spokesman Lee Quarles said
> The government asked this week for information on Monsanto’s biotech soybean
> business, Quarles said. Monsanto’s patented genes are inserted into roughly 95
> percent of all soybeans and 80 percent of all corn grown in the U.S.
> The government is examining whether farmers and seed companies will have
> access to Monsanto’s popular Roundup Ready soybeans after the seeds’ patent
> expires in 2014. The company is trying to shift customers to the next
> generation of patented soybeans, but said in a statement it will grant full
> access to the current variety even after the patent expires.
> Justice Department spokeswoman Gina Talamona would not comment on the matter,
> but confirmed for the first time the department is ”investigating the
> possibility of anticompetitive practices in the seed industry.”
> Last month, an Associated Press investigation uncovered contracts showing that
> Monsanto’s business practices squeeze competitors, control smaller seed
> companies and protect its dominance over the genetically altered crops market.
> One contract clause, for example, bans independent companies from breeding
> plants that contain both Monsanto’s genes and the genes of any of its
> competitors, unless Monsanto gives prior written permission. That could let
> Monsanto effectively lock out competitors from inserting their patented traits
> into the vast share of U.S. crops that already contain Monsanto’s genes.
> Scott Partridge, Monsanto’s deputy general counsel, said the company has done
> nothing wrong.
> ”Monsanto continues to cooperate with the U.S. Department of Justice
> inquiries, just as we have over the last several months,” Partridge said in a
> statement Thursday. ”We respect the thorough regulatory process. We believe
> our business practices are fair, pro-competitive and in compliance with the
> Monsanto shares fell $1.22, or 1.5 percent, to $82.73 in afternoon trading
> Morgan Stanley analyst Vincent Andrews said antitrust troubles would likely
> fade with time and not have a significant impact on Monsanto’s business.
> Because the department asked about access to Roundup Ready products after the
> patent expired, it is likely not interested in other issues around Monsanto’s
> practices, Andrews said in a report Thursday.
> ”We expect this to be the sole focus of the Department of Justice’s inquiry
> into Monsanto, and that a formal lawsuit will not be filed,” Andrews said in
> the report.
> Monsanto, which is based near St. Louis, introduced its first commercial
> strain of genetically engineered soybeans in 1996. The Roundup Ready plants
> were resistant to the herbicide, allowing farmers to spray Roundup whenever
> they wanted rather than wait until the soybeans had grown enough to withstand
> the chemical.
> The company gained broad market reach over the last decade by letting
> competitors and independent seed companies sign licensing agreements allowing
> them to insert Monsanto’s patented genes into their own strains of corn,
> soybeans and other crops.
> Monsanto has the right to control how its genes are used because they are
> patented. Competitors worry that Monsanto could prolong its dominance for
> years if customers aren’t allowed to use Roundup Ready seeds after the patent
> expires in 2014.
> Monsanto said in a Dec. 15 letter to the American Soybean Association that
> seed companies and farmers will have access to the Roundup ready trait after
> its patent expires.
> The company’s business practices also are at the center of civil antitrust
> suits filed against Monsanto by its competitors, including a 2004 suit filed
> by Syngenta AG, that was settled with an agreement, and ongoing litigation
> filed this summer by DuPont in response to a Monsanto lawsuit.