Ann Crotty
For the first time in its 12-year history the Competition Tribunal has granted NGOs the authority to intervene in a proposed merger under its consideration. The African Centre for Biosafety (ACB) and Biowatch South Africa have been granted leave to intervene in the proposed acquisition of local seed company Pannar Seeds by Pioneer Hi-Bred International, a subsidiary of US chemical multinational Du Pont.
ACB will be represented at next month’s hearing by Legal Aid South Africa and Biowatch by Pro Bono, a public interest legal organisation.
The transaction, which is classified as an intermediate merger, was prohibited by the Competition Commission last December on the grounds that it would substantially lessen competition in the maize seed market. The merging parties appealed this decision to the Competition Tribunal. At the same time, the two NGOs applied to intervene in the tribunal’s proceedings.
Last Friday, the tribunal ruled that they could intervene but restricted their intervention to four grounds.
These relate to the effect of the proposed merger on pricing and the availability of alternative products if the merger is approved; the effect on smallholder farmers, small-scale commercial black farmers and consumer choice; the resultant barriers to entry; and the public interest effect of the proposed merger, particularly in light of Pannar’s extensive maize germplasm inventory and the opportunities that it presents for development.
Pannar Seed, which is the country’s largest independent seed company, is a family run business founded in 1958. It has business and research operations throughout Africa, as well as in South America.
The proposed merger is seen as part of the commercialisation and consolidation process that has characterised the global seed market during the past two decades.
This has resulted in the sale of seeds across the globe being dominated by three powerful companies – Du Pont, Monsanto and Syngenta.
Glenn Ashton of Biowatch said that the loss of an “independent” Pannar “would remove our last remaining major seed company from the market, which would mean that our food supply would effectively be controlled by two US corporations, Pioneer and Monsanto”.
“There are serious negative potential consequences for employment, food security and food sovereignty,” he added.
ACB director Mariam Mayet said that they were delighted that the tribunal was allowing them to argue “the imbalances in the food chain and the need for protecting small-scale food producers and consumers from the abuse of corporate power.” Business Watch, page 2