Corteva and Syngenta allegedly pay distributors to exclude competitors’ generic options on farming products
SEATTLE — Attorney General Bob Ferguson partnered with the Federal Trade Commission and a bipartisan coalition of 12 attorneys general in a federal antitrust lawsuit against two of the largest pesticide manufacturers in the world over a conspiracy to shut out generic versions of their products. This scheme drives up costs for Washington farmers, and ultimately, food prices.
Syngenta Crop Protection and Corteva, Inc. sold more than $20 billion in pesticides in 2021 alone. The companies sell their products to approximately a dozen distributors, which then sell the pesticides to retail outlets.
In an antitrust lawsuit filed in the U.S. District Court for the Middle District of North Carolina, the FTC and states allege Syngenta and Corteva are violating the Sherman Antitrust Act and the Clayton Antitrust Act. The lawsuit asserts the companies established a “loyalty program” with their distributors, where the distributors are only paid if they limit their business with competing manufacturers, in violation of federal antitrust laws.
From 2017 to 2022, the companies sold $48 million of these products in Washington, impacting thousands of Washington farmers.
“When farmers are paying more for their crops, it impacts everyone,” Ferguson said. “The law demands fair competition. I will stand up to corporate greed.”
Similar to the pharmaceutical industry, pesticide producers that develop new active ingredients can patent those ingredients for a period of time, and produce them exclusively. After that period, other companies can produce a generic version of that product, ensuring competition and driving costs down.
According to the complaint, Syngenta and Corteva worked to illegally circumvent this process. The companies use “loyalty” programs to make payments to distributors, as long as the distributors keep their business with competitors below a very low threshold.
Because seven distributors dominate the sale of crop-protection products in the United States, Syngenta and Corteva almost entirely foreclose generic competitors from distributing their products. This also artificially inflates prices for farmers, and ultimately consumers.
Assistant Attorney General Lumi Nodit and Legal Administrative Manager Grace Monastrial are handling the case for Washington.
The Attorney General’s Office Antitrust Division is responsible for enforcing the antitrust provisions of Washington's Consumer Protection Act and federal antitrust laws. The division investigates and litigates complaints of anticompetitive conduct and reviews potentially anticompetitive mergers. The division also brings actions in state and federal courts to enforce antitrust laws. It receives no general fund support, funding its own actions through recoveries made in other cases.
For information on filing a complaint regarding potential anticompetitive activity, visit https://fortress.wa.gov/atg/formhandler/ago/AntitrustComplaint.aspx.
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Brionna Aho, Communications Director, (360) 753-2727; Brionna.email@example.com
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