Antitrust Lawyer Blog Commentary on Current Developments

Articles Tagged with Dupont

On August 23, 2016, Senate Judiciary Committee Chairman Chuck Grassley announced a hearing on the increasing consolidation within the seed and chemical industry.

The hearing will be held in late September.  Senator Grassley said that “The seed and chemical industries are critical to agriculture and the nation’s economy, and Iowans are concerned that this sudden consolidation in the industry could cause rising input costs in an already declining agriculture economy.” The hearing will focus on the transactions currently being reviewed by antitrust regulators, and the current trend in consolidation of the seed and chemical industries.

While details have not been finalized, views from the companies under review by antitrust regulators, consumers and antitrust experts will all be represented at the hearing.  “In most instances when you have less competition, prices go up, and consumers pay more,” he said in an interview.

On August 16, 2016, Senator Charles Grassley (R-IA), chairman of the Senate Judiciary Committee, wrote a letter to FTC Chairwoman Edith Ramirez and DOJ Antitrust Division Head, Renata Hesse in which he expressed concerns regarding two major mergers in agricultural technology and seeds that could potentially hurt competition in the industry and make it harder for smaller companies to compete.

The senator urged the FTC, which is reviewing the purchase of Syngenta AG (“Syngenta”) by the China National Chemical Corporation (“ChemChina”), and the DOJ, which is analyzing the merger of The Dow Chemical Company (“Dow”) and E. I. du Pont de Nemours and Company (“DuPont”), to coordinate their reviews.  Senator Grassley wrote that “it is important that these transactions not be reviewed in isolation.”   He urged the DOJ and FTC to collaborate and to gain input from the Department of Agriculture as part of their analysis of the agricultural biotechnology and seed industry and the competitive impact of these deals.

Senator Grassley also expressed concern that “the convergence of these proposed transactions – as well as others currently being discussed – will have an enhanced adverse impact on competition in the industry and raise barriers to entry for smaller companies”; “further concentration in the industry will impact the price and choice of chemicals and seed for farmers, which ultimately will impact choice and costs for consumers”; and “further consolidation will diminish critical research and development initiatives.”

On May 31, 2016, the American Antitrust Institute (“AAI”), Food & Water Watch (“FWW”) and National Farmers Union (“NFU”) sent a letter to the Principal Deputy Assistant Attorney General, Renata Hesse, urging the Antitrust Division of the U.S. Department of Justice (“DOJ”) to challenge the proposed Dow/DuPont merger.

The letter details the groups’ analysis of the proposed merger, which would create the largest biotechnology and seed firm in the United States. According to the AAI, FWW, and NFU, this transaction would further consolidate an already highly concentrated biotechnology industry and would likely curtail innovation, raise prices, and reduce cultivation choices for farmers, consumers and the food system.

The groups urge the DOJ to critically review the implications of the deal. Their letter outlines three major areas of concern, including eliminating head-to-head competition in the corn and soybean markets, reducing vital innovation competition, and creating a large, integrated “platform” of traits, seeds, and chemicals that would make it harder for smaller biotechnology rivals to compete.