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Competitive market advocate faults Justice Department for allowing ADM merger (Wednesday, Jan. 1, 2003 -- CropChoice news) -- Press release from the Organization for Competitive Markets
Contact: Steve Cady, 402.792.2320
The Organization for Competitive Markets submitted comments to the Federal
District Court, District of Columbia faulting the U.S. Department of Justice
(DOJ) in its approval of a merger by Archer Daniels Midland (ADM). (Full
text available on OCM website under “What’s New”). The comments were drafted
by Professor Peter Carstensen of the University of Wisconsin law school.
OCM told the court that it cannot approve ADM’s acquisition of Minnesota
Corn Processors absent more information on whether the merger will unduly
harm competition in three markets: corn syrup, high fructose corn syrup and
ethanol.
“ADM is a serial price fixer that should not be allowed to increase its
market power in any market,” asserted Keith Mudd, OCM vice president. “ADM
and Minnesota Corn Processors are the number one and two ethanol producers
in the country. DOJ’s consent to their combination is inexcusable.
Obviously, none of the DOJ attorneys have tried to sell their annual grain
production in this market.”
DOJ filed a petition in Federal District Court, District of Columbia, on
September 6, 2002 to block ADM’s proposed acquisition of MCP. On the same
day, it asked the judge to approve a Consent Decree that would allow the
merger if MCP pulled out of a joint venture with another corn processor. On
September 13, 2002, DOJ filed a Competitive Impact Statement, as required
under law, to explain why the Consent Decree will preserve competition.
(These documents can be viewed on the DOJ website at
http://www.usdoj.gov/atr/cases/indx358.htm). Professor Carstensen filed his
comments to the Consent Decree on behalf of himself, OCM and others which is
allowed by a law known as the Tunney Act.
OCM’s comments asked the federal judge to reject the consent decree because
DOJ failed to show that the combination would preserve competition.
Specifically, DOJ:
1. Failed to disclose MCP’s market share in corn syrup and high fructose
corn syrup, which is necessary to evaluate the effect of the deal on those
markets.
2. Failed to disclose or discuss ADM’s ownership interests in other
companies with which it competes.
3. Failed to disclose or discuss a recent Seventh Circuit Court of Appeals
decision that found a substantial risk of price fixing by ADM and others in
the high fructose corn syrup market.
4. Failed to discuss or show how competition will be preserved after the
deal is completed.
“There is no basis for the court to allow this merger without requiring DOJ
to justify that the consent decree will preserve competition,” said Fred
Stokes, OCM president. “It escapes me how DOJ can claim to be enforcing
antitrust laws when it seeks to allow a company like ADM to gain an even
more dominant position in grain and oilseed processing.”
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. | |
