ngin - Norfolk Genetic Information Network
15 March 2003

JUSTICE DEPARTMENT OPENS MONSANTO ANTITRUST PROBE

http://www.mindfully.org/Industry/2003/Monsanto-Antitrust-Herbicide14mar03.htm

Justice Department Opens Monsanto Antitrust Probe
WALL STREET JOURNAL 14mar03

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.

Monsanto, maker of the best-selling Roundup weedkiller, said in its annual report with the Securities and Exchange Commission 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. She said Monsanto has cooperated with the government's "very broad-based" request for information.

Ms. Fisher declined to discuss specifics of the inquiry, including when the inquiry was launched or 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.

Sales of Monsanto's Roundup -- the nation's best-selling herbicide -- have been under pressure since 2000, when the company lost U.S. patent protection for glyphosate. In its filing Thursday with the SEC, Monsanto said the patent expiration means that 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 or 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," the company said.

The Justice Department inquiry could throw a wrench into Monsanto's search for a chief executive because candidates would be wary of the issue, said Bill Jacobs, an analyst at Harris Associates in Chicago. How much the inquiry hinders the search process depends on how much information Monsanto can show a candidate, he said.

Hendrik Verfaillie

Hendrik Verfaillie abruptly resigned as president and CEO of Monsanto on Dec. 18, in a move that had signaled more upheaval at the company, which also is struggling against consumer unease with genetically modified food. Monsanto Chairman Frank AtLee, a longtime chemicals-industry executive, is serving as interim CEO.

Separately Friday, Monsanto reaffirmed its 2003 earnings forecast of $1.20 to $1.40 a share, excluding certain accounting-related items. The company also reiterated that it expects 85% to 90% of its earnings to occur in the first half of the year, with roughly 10% of annual earnings occurring in the first quarter. Monsanto said it will release first-quarter earnings on April 30.

Frank V. AtLee III [interim Monsanto CEO]

Mr. AtLee has served Monsanto Company‚s board as a director and chairman for more than two years, where he also chairs the board‚s executive committee and is a member of the special committee. He spent 28 years with the former American Cyanamid and retired as president and chairman of Cyanamid International in 1995.

Mr. AtLee is also a member of the board of Nereus Pharmaceuticals Inc. and has served on the boards of trustees of Ramapo College of New Jersey and the Foundation of the University of Medicine and Dentistry of New Jersey. He is currently a director of the private company Fingold in Italy. Before serving as an officer in the US Marine Corps, Mr. AtLee received a bachelor‚s degree in chemistry and biology from Lynchburg College in Lynchburg, Va.

source: http://www.antigenics.com/aboutus05.html 14mar03
 


ngin bulletin archive

INDEX