Bayer, BASF Face Another Lawsuit Over Crop Supply Chain Deals

Bayer AG, Corteva Inc., BASF Corp. and Syngenta Corp. are facing another antitrust lawsuit alleging the large agricultural product manufacturers colluded to prevent electronic sales platforms from disrupting their market dominance and lucrative supply chain.

The companies dominate the sales and distribution of seeds, pesticides and other products, maintaining “supracompetitive prices” by denying farmers accurate pricing information, according to a proposed class action filed Thursday in the U.S. District Court for the Southern District of Illinois.

The price of seed corn rose 300% in the last 20 years, while corn yields increased only 33% to 35%, according to the filing by a product buyer, Keith Lyle Bailey.

“These increases are proving devastating to farmer, who currently occupy the least profitable level of the American food supply chain,” the filing said.

The companies allegedly restricted wholesalers and retailers from selling to online start-ups like Farmers Business Network, recognizing the threat the site posed by its model to cut out “the middle man,” the complaint claimed.

FBN, a farmer-to-farmer sales site based in San Carlos, Calif., tried to circumvent the boycott by purchasing its own retailer Yorkton Distributors Ltd. The defendants named in the suit then canceled existing supply contracts with Yorkton, “starving FBN’s platform of the Crop Inputs it needed to operate,” according to the filing.

Wholesalers and retailers—including Cargill Inc., Winfield United, Univar Solutions Inc., CHS Inc., Nutrien AG Solutions Inc., Growmark Inc., Tenkoz Inc., Simplot AB Retail Sub Inc. and Federated Co-operatives Ltd—were also named as defendants in the suit.

The complaint mirrors a lawsuit filed in January in the same court against the largely same group of companies.

The latest lawsuit “repeats unfounded allegations contained in other, nearly identical actions,” a Bayer spokesperson wrote in a statement Friday. Bayer expects the cases to be consolidated, the email said.

“Bayer and its co-defendants have many strong defenses against these claims including that they fail to assert any evidence that defendants allegedly engaged in anticompetitive conduct at any level of distribution, and similarly fail to provide evidence that plaintiffs suffered any relevant injuries,” Bayer’s statement said.

CHS and Univar declined to comment, both citing company policies on pending litigation.

Other defendants didn’t immediately respond to requests for comment.

Canada’s Competition Bureau is investigating the FBN boycott, according to the complaint.

Cause of Action: Section 1 of the Sherman Act; violation of various states’ antitrust laws.

Relief: Permanent injunction, treble damages, costs, and interest.

Potential Class Size: Anyone who bought a “crop input” from any of the defendants since 2014.

Attorneys: Hagens Berman Sobol Shapiro LLP is representing the plaintiff.

The case is Bailey v. Bayer Cropscience LP, S.D. Ill., No. 3:21-cv-00512, complaint filed 5/27/21.