On May 24, 2012, the European Competition Network (ECN) reported on enforcement and monitoring of competition in Europe’s food sector. The 155-page report appears under the heading “Sector reports” on the ECN’s website, at http://ec.europa.eu/competition/ecn/documents.html
The Report refers to concerns about the functioning of the European Union’s (EU) food supply chain. The Report discusses among other issues increased price volatility in the EU food sector that followed a “significant” increase in food prices after mid-2007. The Report notes (p. 15) a disconnect in the movements of agricultural commodity prices, food producer prices and consumer prices since mid-2007. Some national competition authorities (NCAs) believe that increased consolidation (e.g., creating cooperatives and other forms of cooperation among producers) would make the food sector function more competitively. These NCAs contend that “atomistic . . . primary production in combination with . . . small-scale farmers hamper[s] the overall competitiveness of the sector.” (p. 10)
The Report provides a wealth of data, graphs, tables and charts regarding the food supply chain, prices, antitrust investigations and antitrust cases undertaken by European competition authorities in the food sector since 2004. This information includes a country-by-country table of antitrust cases brought by NCAs and the European Commission and a list of food sector inquiries, market studies and consultative opinions reported by NCAs since 2004.
On May 16, 2012, the Antitrust Division of the U.S. Department of Justice (DOJ) issued a 24-page report on the five public competition-in-agriculture workshops that the DOJ co-sponsored with the U.S. Department of Agriculture in 2010. The report, “Competition and Agriculture: Voices from the Workshops on Agriculture and Antitrust Enforcement in Our 21st Century Economy and Thoughts on the Way Forward,” is available at the following DOJ link: www.justice.gov/atr/public/reports/283291.pdf
In Section II of the Report, “What We Heard at the Workshops,” the DOJ summarizes and discusses themes that were heard repeatedly at the workshops, including anticompetitive mergers, high market concentration, monopsony power, price levels, lack of capital, contracting, market transparency and captive supply, market manipulation and genetically modified seeds.
Section III of the report assesses which of the concerns raised during the workshops fall within the scope of the DOJ’s antitrust enforcement powers, and which do not. The report states at p. 16, for example, that as a result of the workshops, “the Division has redoubled its efforts to prevent anticompetitive agricultural mergers and conduct,” but observes elsewhere that the antitrust laws do not empower courts to engineer an idealized economic landscape of small farms and ranches, and modest-sized local grain elevators and packers, or to control price volatility that results from market forces and not from anticompetitive practices. (Report, at 18, 20.)
Read an update in the Committee’s Winter 2012 Newsletter on the result of USDA’s controversial rulemaking attempt to expand liability under the Packers and Stockyards Act and to reform livestock and poultry markets.
On December 8, 2011, the U.S. Department of Agriculture’s Grain Inspection, Packers and Stockyards Administration (GIPSA) issued its long-awaited final rule amending regulations under the Packers and Stockyards Act (PSA). The rule making was required in part by Title XI of the Farm, Conservation and Energy Act of 2008 (2008 Farm Bill). GIPSA published proposed PSA regulations — some very controversial — on June 22, 2010, and promptly was swamped by more than 64,000 public comments. Recently Congress in the FY2012 Agriculture Appropriations billweighed-in, according to the USDA, by “prohibiting the [USDA] from moving forward” on controversial proposed regulations. Those included changes to the tournament system of payment for poultry growers, requirements to collect and post sample livestock contracts andelimination of the need to prove competitive injury in actions under sections 202(a) and (b) of the PSA. GIPSA announced in its final rule that it has “not . . . finalized” those provisions “at this time.”
On October 17, 2011, the Daily Maverick reported that the Competition Tribunal of South Africa (Tribunal) disapproved, on Friday, October 14, 2011, the proposed merger of US-based Pioneer Hi-Bred International (Pioneer) and Pannar Seed of South Africa (Pannar). No opinion in the case was available on the Tribunal’s website or on other online sources. According to a Business Day report earlier this month, the Competition Commission of South Africa (Commission) argued to the Tribunal that the proposed merger would greatly reduce competition — reducing the number of competing corn seed producers in South Africa from 3 to 2 (Pioneer and Monsanto), raising seed prices as much as 8% and inhibiting new entry into the seed market there.