Justice Department Investigating Monsanto for Antitrust Practices

Justice Department Opens Monsanto Antitrust Probe
WALL STREET JOURNAL 14mar , 03

ST. LOUIS -- The Justice Department is investigating Monsanto Co. for
possible antitrust practices in the herbicide industry, the agricultural
and biotech giant disclosed in a regulatory filing.

Monsanto, maker of the best-selling Roundup weedkiller, said in its
annual report with the Securities and Exchange Commission Thursday that
the probe involves “possible anticompetitive conduct in the
glyphosate-based herbicide industry.” Glyphosate is a key ingredient in Roundup.

Monsanto spokeswoman Lori Fisher said Friday that the company believes
the Justice Department has requested information from various glyphosate
marketers and distributors. She said Monsanto has cooperated with the
government's “very broad-based” request for information.

Ms. Fisher declined to discuss specifics of the inquiry, including when
the inquiry was launched or what details the Justice Department sought.
“From our standpoint, we believe we've acted appropriately, and we are
cooperating with their inquiry,” she said.

Justice Department spokesman Blain Rethmeier declined to discuss the
matter or to confirm that the inquiry was launched, saying departmental
policy bars such comment.

Sales of Monsanto's Roundup -- the nation's best-selling herbicide --
have been under pressure since 2000, when the company lost U.S. patent
protection for glyphosate. In its filing Thursday with the SEC, Monsanto
said the patent expiration means that the company would face increasing
competition to its Roundup herbicides, specifically from generic makers.

Monsanto said it has five to 10 major global rivals to its agricultural
herbicide products, with competition from local or regional companies
also potentially significant. Given that, Monsanto said it historically
has reduced Roundup prices in various markets, in addition to offering
discounts, rebates or other promotional strategies to compete.

“However, there can be no guarantee that price reductions will stimulate
enough volume growth to offset the price reductions and increase
revenues,” the company said.

The Justice Department inquiry could throw a wrench into Monsanto's
search for a chief executive because candidates would be wary of the
issue, said Bill Jacobs, an analyst at Harris Associates in Chicago. How
much the inquiry hinders the search process depends on how much
information Monsanto can show a candidate, he said.

Hendrik Verfaillie

Hendrik Verfaillie abruptly resigned as president and CEO of Monsanto on
Dec. 18, in a move that had signaled more upheaval at the company, which
also is struggling against consumer unease with genetically modified
food. Monsanto Chairman Frank AtLee, a longtime chemicals-industry
executive, is serving as interim CEO.

Separately Friday, Monsanto reaffirmed its 2003 earnings forecast of
$1.20 to $1.40 a share, excluding certain accounting-related items. The
company also reiterated that it expects 85% to 90% of its earnings to
occur in the first half of the year, with roughly 10% of annual earnings
occurring in the first quarter. Monsanto said it will release
first-quarter earnings on April 30.

Mr. AtLee has served Monsanto Company’s board as a director and chairman
for more than two years, where he also chairs the board’s executive
committee and is a member of the special committee. He spent 28 years
with the former American Cyanamid and retired as president and chairman
of Cyanamid International in 1995.

Mr. AtLee is also a member of the board of Nereus Pharmaceuticals Inc.
and has served on the boards of trustees of Ramapo College of New Jersey
and the Foundation of the University of Medicine and Dentistry of New
Jersey. He is currently a director of the private company Fingold in
Italy. Before serving as an officer in the US Marine Corps, Mr. AtLee
received a bachelor’s degree in chemistry and biology from Lynchburg
College in Lynchburg, Va.