Feds step up antitrust investigation into Monsanto

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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.

By CHRISTOPHER LEONARD

AP Agribusiness Writer

ST. LOUIS —

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 Thursday.

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 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.

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 law. "

Monsanto shares fell $1.22, or 1.5 percent, to $82.73 in afternoon trading

Thursday.

Stanley analyst s 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, s 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, " s 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.

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