Global Mergers in Food Sector and Competition Law/Policy - PowerPoint Presentation

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Global Mergers in Food Sector and Competition Law/Policy

An Indian PerspectiveUjjwal Kumar, Policy Analyst, CUTS InternationalSPILF, 19 May 2017

OutlinePolicy environment for Ag-biotech seeds (2 slides)Recent merger notifications and CUTS' submissions (3 slides)

The way forward (2 slides)2

Policy Environment for Ag-biotech seed100% FDI allowed in seed sector since 2011Sui generis

IP law for protection of new varieties of plants along with strong farmers rights (PPVFRA,2001)Gene Patent: More dependent on interpretation (e.g. BollGuard-II of Monsanto is patented in India)Price control on GM cotton seed; Cap on patent royaltyDraft GM Licensing Guidelines and inherent conflict of patent and PVP lawNational IPR Policy

In addition, a case is under investigation by CCI

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Indian seed cos. vs Monsanto (at CCI, on going)

Case involves licensing agreements of ‘bt cotton technology’ b/w Monsanto and Indian seed companies. Main allegations:Abuse of dominance (unreasonably high trait fee)Anti-competitive agreements (restrictive clauses)CCI establishes a prima facie

case and investigation ordered (going on)

Contentious issues:

Jurisdiction of CCI on patent licensing

“

Bt

technology in India” as relevant market

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Merger notifications by CCIDow-DuPont & Agrium-PotashCorp

Prima facie opinion by CCI – “likely to have an appreciable adverse effect on competition”; begins the process by inviting public commentsCUTS submitted detailed comments on bothNext steps: CCI may ask for more info from merging parties, then shall proceed to deal with the case (merger review) (on going)ChemChina-Syngenta and Bayer-Monsanto not yet notified; may be soon

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Dow-DuPont: CUTS ArgumentsShape of things to

come as reference point for merger reviewVertical integration, use of big data analytics via super-platforms to provide one-stop solutionsReduction in agro-biodiversitydecrease

in consumer

choice

loss

of income opportunity for

farmers

effect

on food security and sustainability of

agriculture

Cumulative effect of all mega

mergers

all merging parties have

plans

for vertically

integrated

platformsInclusion of public interest in merger analysisfood security, biodiversity, farmers welfare etc.Effect on innovationplatforms can create entry barriers for small innovatorsImportant to maintain parallel R&D pipelines decrease in competition in innovation market

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Agrium-PotashCorp: CUTS SubmissionIndia is totally dependent on import of Potash (4

th largest importer)Merging parties do not have physical presence in India; Potash is supplied by Canpotex – an export cartel – owned by the merging parties along with MosaicAdverse

effect on

‘price’

and

‘supply’

of potash

Countervailing buying power may not be as effective

Agrium

a maverick firm; diverse business model

(

agri

inputs, grain trade,

retail etc.)

the

merger eliminates the possibility of Agrium as an undisciplined member capable of disruption7

Way Forward: DomesticInnovation in competition analysis/merger review

e.g. include public interest, food security etc.Better use of windows for public interventione.g. capacity building of consumer groups/civil societyIf CL enforcement fails, Govt. may like to use other (or evolve new) policy tools; having a Competition Policy could be helpful

Conduct sector competition

enquiry

and recommend to governments for competition reform [e.g. Productivity

Commission,

Australia, on “IP Arrangement”: Australia’s

patent system grants exclusivity too readily, allowing a proliferation of low-quality patents, frustrating follow–on innovators and stymieing competition.

(Sept2016)]

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Way Forward: InternationalInternational cooperation Use the new BRICS cooperation

MoU UCL-HSE Skolvo StudyDeepen it at national level (BRICS countries)Create a global advocacy platform Multilateral

competition

arrangement

May

have some minimum standards (say prohibit export

cartels, absolute exhaustion of IPRs etc.)

May be differentiated treatment

to

‘food’

and

‘health’

sector,

like in the case of IP

BRICS

could

lead and set the agenda9

Thank youujk@cuts.org

http://www.cuts-ccier.org/pdf/Advocacy-CUTS_Comments_on_Form_IV_submitted_by_the_Parties_to_the_Dow-DuPont_Merger.pdfhttp://www.cuts-ccier.org/pdf/Advocacy-CUTS_Comments_on_Form_IV_submitted_by_the_Parties_to_the_Agrium-Potash_Merger.pdf

Think Globally, Act Locally and React Globally

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