Posted on: Monday, March 17, 2003

Monsanto target in antitrust case

By Jim Suhr
Associated Press

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, 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 the company believes that 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.

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

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 shares fell $2.51, or 15.1 percent, to close Friday at $14.07 on the New York Stock Exchange.

Monsanto's Roundup sales — 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 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," Monsanto said.

In a separate statement Friday, Monsanto reaffirmed its full-year 2003 earnings estimate and said it expected that as much as 90 percent of its profits will come in this year's first half.

The company said it expects 2003 earnings to be $1.20 to $1.40 per share, excluding the cumulative effect of new accounting standards of roughly $15 million, or 6 cents per share.