Mention the name Elizabeth Warren and you are bound to raise the blood pressure of executives in Delaware and elsewhere.
The Massachusetts senator, presidential candidate and longtime critic of the banking and student loan industries, turned her attention yesterday to the debate over companies operating as monopolies and duopolies.
She was especially critical of the merger between Bayer and Monsanto, but also questioned the key component of the DowDuPont merger-spinoff – the business now known as Corteva Agriscience.
Warren said that between Corteva and the bulked-up Bayer, the two companies have a 75 percent market share of some market segments. Also in the mix is the merger of Syngenta and China’s national chemical company.
Warren’s remarks are aimed at farmers in swing states like Iowa, Minnesota and Wisconsin, who worry about monopoly pricing and hardball tactics in enforcing seed patents that looking for leftover seeds from the previous season.
Politifact, which does a good job of checking out campaign rhetoric, said Warren was half right.
The wave of mergers has produced agribusiness behemoths with large market shares.
The impact of duopolies, such as Dow DuPont and Bayer, is debatable. But rarely do two big guys have a knockdown drag out pricing fight in an attempt to gain a few points in market share.
One industry expert said the biggest danger may be “price signaling,” defined as one company boosting prices, with the other quickly following suit.
Where Warren was off base, according to Politifact, came in her assertion that mergers were rubber stamped.
The DowDuPont and Monsanto-Bayer mergers went through a long process both in the U.S and overseas.
In order to meet antitrust demands, DowDuPont was forced to shed a highly lucrative business to FMC. Luckily for Delaware, the company kept the research side of the business at the Stine-Haskell site in Newark.
Warren took on another company with operations in the region, poultry giant Tyson, which has a processing plant in Virginia.
Will Warren, an admirer of the last trust-busting president, Teddy Roosevelt, gain any headway in a crowded field?
That remains to be seen. But give her credit for coming up with an issue worthy of debate. – Doug Rainey, chief content officer.