A family-owned Iowa seed company has filed a federal lawsuit claiming Bayer engaged in illegal tactics to dominate the American market for genetically modified corn seeds, allegedly earning “hundreds of millions, if not billions, of ill-gotten dollars.”
The legal action by Latham Quality targets the concentrated U.S. seed industry as the current administration examines anti-competitive practices in agricultural supply chains. The Germany-based pharmaceutical and agricultural giant already faces thousands of separate lawsuits claiming its Roundup weedkiller causes cancer.
According to the complaint filed in U.S. District Court for the Eastern District of Missouri last month and made public Tuesday, Bayer artificially inflated costs for farmers and independent seed companies by dominating the market for corn seeds engineered to withstand Roundup.
“Bayer has the power to control market prices and exclude competition,” the lawsuit stated. “In fact, it does so.”
The civil case seeks class-action status and requests triple damages for losses allegedly suffered by Latham and similar companies. American crop producers have been grappling with elevated expenses for seeds, fuel and fertilizer while confronting a fourth consecutive year of declining profit margins.
Bayer, which purchased American seed manufacturer Monsanto in 2018, responded Wednesday that it considers the claims without merit and will address them through the court system. The company maintained it operates fairly across all areas of its agricultural operations while following applicable regulations.
“The crop input and corn seed markets are competitive, fair and diverse,” Bayer stated.
The Department of Justice announced last week that Bayer eliminated potentially anti-competitive elements from a loyalty program designed for independent seed companies that license its technology for seed production.
The lawsuit centers on corn seeds called NK603, which Bayer controls. Nearly all genetically engineered hybrid corn seeds distributed in America contain the NK603 characteristic that provides Roundup resistance, the complaint noted. Federal estimates indicate approximately 92% of corn acreage utilizes herbicide-tolerant seeds.
Despite Bayer’s final patent on NK603 expiring in 2022, demand has remained strong while no meaningful competition has developed, according to the filing.
“This is the direct result of Bayer’s anti-competitive conduct to maintain its monopoly,” the complaint alleged.
The lawsuit claims Bayer blocked independent seed companies from utilizing its genetic seed material to create competing generic corn products even after the NK603 patent lapsed. The company also continued collecting royalties on seeds grown from its genetic material and increased licensing costs for companies like Latham.
Latham had licensed rights from Bayer or Monsanto to incorporate NK603 into corn seeds that Latham manufactured and sold to farmers. When Latham began developing its own corn seeds that would compete with Bayer’s offerings, a Bayer representative allegedly warned the company to “stay 100% loyal to Bayer.”
After Latham continued its competitive efforts, Bayer brand sales representatives retaliated by using confidential information to steal the company’s customers, pushing Latham toward bankruptcy, the lawsuit claimed.
“Unfortunately, many independent companies are going out of business as these multinational companies have become more powerful and frankly predatory,” John Latham, president of Latham Quality, testified to a U.S. Senate Judiciary Committee hearing on competition in the seed and fertilizer sectors in October.
Bayer’s Crop Science division, which encompasses seeds, reported first-quarter earnings that increased 17.9% to 3 billion euros ($3.49 billion).
