European Commission to investigate Bayer-Monsanto tie-up

By Aerin Einstein-Curtis contact

- Last updated on GMT

© iStock
© iStock

Related tags: European union

Reduced competition in pesticides, seeds and plant traits were among the reasons given by the European Commission for an in-depth investigation of the proposed Monsanto-Bayer merger.

The EU Commission’s announcement​ on Tuesday, August 22 comes after several US farming and agricultural organizations jointly asked the US Department of Justice in an open letter to consider reviewing or stopping the proposed merger based on several similar points.  

The letter was sent by members of the National Farmers Union (NFU), American Antitrust Institute and Food and Water Watch. It addressed​ farmer concerns including the lack of competition, potential for increased seed prices and reduced options for seed and stacked trait variety.

The group has not had a formal response from the US Justice Department, said Barbara Patterson, government relations director with NFU. However, members met with the department to discuss the topics covered in the letter.

The conversation covered the methodology used to generate the market consolidation information and the concerns raised, she said.

“We had our president talk about what it means to have a small increase in seed cost or what it means to have fewer choices available when you’re dealing with climate viability – we talked a lot about what we’re hearing from our members and we did share our concerns,”​ she told FeedNavigator.  

The meeting did mark a change in reaction, said Patterson. Previously, the organization had written a similar letter about the then-proposed merger of Dow Chemical Company and DuPont, but did not receive a response or a meeting request from the Justice Department.

“We do think they wanted to hear from the farm community so we hope that means a different outcome,”​ she said.

However, as far as what a deeper look at the merger from the EU Commission may mean for US producers is unclear at this point, she said.  “It’s worth a really deep analysis on the part of regulators because this has big impacts for farmers,”​ she added.

EU probe

“Seeds and pesticide products are essential for farmers and ultimately consumers,”​ said Margrethe Vestager, Commissioner in charge of competition policy, in a release. “We need to ensure effective competition so that farmers can have access to innovative products, better quality and also purchase products at competitive prices. And at the same time maintain an environment where companies can innovate and invest in improved products.”

Both companies breed and license feed crops with Monsanto having the largest European market share for the oilseed rapeseed, while Bayer has the largest part of the global rapeseed market, the Commission said. They also both play similar roles with other field crops and are among those researching wheat.

Similarly, Monsanto is a dominate player in the market for plant traits and Bayer is one of its few competitor, said the EU officials. The Commission will examine if the merger might limit competition in those markets.

The two companies are also some of the few members of the pesticide industry with the ability to develop new active ingredients and formulations, said the EU officials. And their product portfolio overlaps.

The combination of US-based Monsanto and Germany-based Bayer would combine competitors and establish the largest pesticides and seeds company, said the Commission. It also takes place in a market that is already concentrated.

As part of its investigation, the Commission is working with other competition authorities including the US Department of Justice and similar authorities in Australia, Brazil, Canada and South Africa.

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1 comment

.Bayer Monsanto tie up

Posted by Giovanna Serenelli,

Tie up? Result: a monster that would practically control the whole planet and more specifically on a basic and essential need for humans and animals: food and nutrition.

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