|OCM Faults Department of Justice
Acceding to ADM Merger
December 31, 2002
ORGANIZATION FOR COMPETITIVE MARKETS (OCM)
P.O. Box 6486
Lincoln, NE 68506
Steve Cady: 402-792-2320
Michael C. Stumo: 860-379-6199
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 may 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.