Originally created 03/15/03

Federal antitrust probe targets Monsanto



ST. LOUIS - The Justice Department is investigating Monsanto Co. for possible antitrust practices in the herbicide industry, the agricultural and biotech giant disclosed in a regulatory filing.

St. Louis-based Monsanto, the maker of the best-selling Roundup weedkiller, said in the Securities and Exchange Commission filing Thursday that the probe involves "possible anticompetitive conduct in the glyphosate-based herbicide industry."

Glyphosate is a key ingredient in Roundup.

Monsanto spokeswoman Lori Fisher said Friday that the company believes the Justice Department has requested information from various glyphosate marketers and distributors, and that Monsanto has cooperated with the government's "very broad-based" request for information.

Ms. Fisher declined to discuss specifics of the inquiry, including when it was launched and what details the Justice Department sought.

"From our standpoint, we believe we've acted appropriately, and we are cooperating with their inquiry," she said.

Justice Department spokesman Blain Rethmeier declined to discuss the matter or to confirm that the inquiry was launched, saying departmental policy bars such comment.

Monsanto's Posilac facility in Augusta produces a bovine growth hormone designed to stimulate milk production in dairy cows. Although the plant is only 2 years old, Monsanto has been one of Augusta's most visible corporate citizens since the early 1980s, having operated an artificial sweetener factory, now owned by The NutraSweet Co., and a pharmaceuticals plant, now owned by Pharmacia Corp.

Monsanto's sales of Roundup - the nation's best-selling herbicide - have been under pressure since 2000, when the company lost U.S. patent protection for glyphosate. In a filing Thursday with the SEC, Monsanto said the patent expiration means the company would face increasing competition to its Roundup herbicides, specifically from generic makers.

Monsanto said it has five to 10 major global rivals to its agricultural herbicide products, with competition from local or regional companies also potentially significant.

Given that, Monsanto said it historically has reduced Roundup prices in various markets, in addition to offering discounts, rebates and other promotional strategies to compete.

"However, there can be no guarantee that price reductions will stimulate enough volume growth to offset the price reductions and increase revenues," Monsanto said.