The proposed mergers between Monsanto and Bayer and Dow Chemical and Dupont would create a duopoly that controls 70 percent of the entire world’s agricultural technology market, according to testimony before the Senate Judiciary Committee.
The claim was made Tuesday by the president of a non-profit organization dedicated to fighting cartel behavior, at a hearing alongside executives from the four companies.
Diana Moss, head of the American Antitrust Institute, noted that the plans to merge are already occurring amid “increasingly high prices paid by farmers for technology, reduced seed choices and growing evidence of flagging innovation.”
“The proposed mergers are likely to substantially lessen competition in markets in the US, to the detriment of farmers and consumers,” Moss also said.
Senators on both sides of the aisle shared Moss’ concerns.
“The proposed transaction raises hard questions that will need to be considered,” Sen. Mike Lee (R-Utah) said.
“These questions include whether the transaction would combine assets that less than 10 years ago the [Department of Justice] required Monsanto to divest due to the likely competitive harm that the combination would have caused,” he also noted.
Sen. Patrick Leahy (D-Vt.) said that the planned “mega-mergers raise questions about competition, our food supply, nutrition, and the livelihood of our farm economy.”
“I urge our antitrust authorities to study closely the lessons we have learned from consolidation where it has taken place,” he added.
Leahy is the Senate Judiciary committee’s ranking Democrat. Lee is the chair of the panel’s antitrust subcommittee.
Antitrust regulators on both sides of the Atlantic are currently deciding whether to approve the two mega mergers. Bayer’s proposed $66 billion takeover of Monsanto was finalized earlier this month. The Dow-Dupont deal, worth $59 billion, was announced in December and approved by shareholders of both companies in July.
The Obama administration has halted a number of proposed mergers in the past few months, through a number of federal agencies.
In April, the Treasury Department issued new rules on “tax inversions” that scuttled a deal in the works between pharmaceutical conglomerate Pfizer and the Ireland-based Allergen.
In May, the Federal Trade Commission led a successful legal challenge of proposed integration between Office Depot and Staples.
In July, the Justice Department Antitrust Division sued to stop a deal to combine health insurance giants Humana and Aetna (the latter responded by withdrawing Affordable Care Act compliant plans on heavily subsidized healthcare exchanges in 11 states).
Earlier this year, Antitrust Division head Bill Baer denied that this was part of some new enforcement initiative. Baer said that his office was reacting to “enthusiasm” for mergers, with “all that capital coming back into the marketplace.”
The Antitrust Division, for example, said in April that it wouldn’t oppose a deal between Time Warner Cable and Charter Communications—if the companies complied with certain conditions. The newly integrated firm, now called Charter Spectrum, is the second largest internet provider in the country.
