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OCM says federal antitrust authorities fail to justify ADM merger
(Monday, April 21, 2003 -- CropChoice news) -- The following is a news release.
Contact: Steve Cady: 402.792.0041
Lincoln, NE ~ The Organization for Competitive Markets criticized the failure of the U.S. Department of Justice Antitrust Division (DOJ Antitrust) to adequately explain why it is allowing Archer Daniels Midland Company (ADM) to purchase Minnesota Corn Processors (MCP). DOJ Antitrust has proposed allowing this combination of the number one and two companies in the ethanol and high fructose corn syrup markets.
“ADM is a serial price fixer with a dominant position in corn processing,” said Keith Mudd, OCM vice president. “It is beyond comprehension why federal antitrust authorities would allow it to increase its market share in three major corn by-product markets.”
On December 27, 2002, OCM joined Professor Peter Carstensen of the University of Wisconsin College of Law and others in opposing the agreement between DOJ Antitrust and ADM to allow the companies to combine. (See,
http://www.usdoj.gov/atr/cases/f200900/200905a.htm#1 ). Professor Carstensen pointed out that DOJ Antitrust failed to justify its proposed allowance of the merger that: (1) would further concentrate economic power in these already concentrated markets; (2) fails to acknowledge that ADM is the largest shareholder in another major corn processor, Tate & Lyle of the U.K; and (3) fails to acknowledge a recent federal court decision that found ADM may have already been engaging in price fixing in the high fructose corn syrup market.
On April 1, 2003, DOJ Antitrust filed a response to the comments of Carstensen and OCM dismissing them as “without merit.” (See,
http://www.usdoj.gov/atr/cases/f200900/200905.htm). The government dismissed the increased concentration as not a problem, said “not to worry” about the ADM ownership in its competitor, Tate & Lyle, and said that government lawyers already considered the recent price fixing decision against ADM in their analysis.
On April 17, 2003, Professor Carstensen replied, writing to the judge reviewing the proposed acquisition that the government’s own merger guidelines are being ignored in allowing this deal to go through because there is a presumption of illegality in such a concentrated market. (See OCM website at “What’s New”). Carstensen further stated that the government’s assertion that ADM cannot exert control as the largest shareholder of Tate & Lyle is implausible.
In sum, Carstensen said that the court does not have sufficient information to find that approval of the acquisition is in the public interest.
“By allowing this merger to go through, the Department of Justice is turning a blind eye to its role in preserving competition,” said Fred Stokes, OCM president.
“ADM’s motto ‘The Customer is Our Enemy’ can be put into action more powerfully if the federal court approves this acquisition proposed by antitrust regulators.”
The Organization For Competitive Markets is a multidisciplinary, nonprofit group of farmers, ranchers, academics, attorneys, and policy makers dedicated to reclaiming the agricultural marketplace for independent farmers, ranchers and rural communities. | |
