Pioneer says it didn’t fix prices
A front-page article last week in The New York Times alleged that Monsanto Co. and Pioneer Hi-Bred International Inc., a subsidiary of DuPont Co., conspired to charge higher prices for genetically modified seeds in the mid- to late 1990s.
Both Monsanto and Pioneer, which at the time was an independent company, said discussions between top executives at both companies were related to changes in an “existing licensing agreement, not illegal price fixing,” the Times reported. Executives involved in the discussions included Robert Shapiro, former chief executive of Monsanto, and his former counterpart at Pioneer, Charles Johnson, as well as current Pioneer President Richard McConnell and Monsanto Chief Technology Officer Robert Fraley.
“At no time did we engage in any illegal or inappropriate activity regarding prices for our products,” said Doyle Karr, a Pioneer spokesman. “We always have and always will set our own prices. We do it independently of our competitors.”
The U.S. Department of Justice, which is already investigating Monsanto for potential anti-competitive behavior related to herbicides, is aware of the talks between Monsanto and Pioneer, but it’s unclear whether a formal inquiry has begun, the Times reported.
At the heart of the issue is licensing fees that Pioneer paid Monsanto for technology related to genetically modified soybean and corn seeds. Pioneer was one of the first companies to purchase the rights to those products from Monsanto, and according to the Times, Monsanto executives later felt that Pioneer hadn’t paid enough.
Monsanto executives threatened to withhold future seed technology from Pioneer unless the Des Moines-based company renegotiated its licensing agreements. Pioneer “was reluctant to go along,” The Times reported, citing former Pioneer executives and others familiar with the issue, but the company eventually agreed to charge a premium price for some seeds in order to get access to new seed research from Monsanto.