Farm Press Release
For release Wednesday noon, June 25, 1997.
Contact Bob Brammer -- 515-281-6699.
Miller: Zeneca, Inc., Will Pay States $3.9 Million to Resolve Alleged Price-Fixing in Sale of Farm Chemicals
DES MOINES. Attorney General Tom Miller announced Wednesday that Zeneca, Inc., a farm chemical manufacturing company based in Wilmington, Delaware, will pay $3.9 million in a multi-state settlement to resolve alleged price-fixing in the re-sale pricing of Zeneca chemicals. Zeneca markets Dyfonate, Eradicane, Fusilade, Gramoxone, Sutan, and other farm chemicals in Iowa.
"We alleged that Zeneca illegally tried to control the retail prices that were charged to farmers by independent dealers," Miller said. "We believe farmers had to pay higher prices for farm chemicals because the company essentially set artificial floor prices for their independent dealers." Miller said the states' Complaint was filed today in Dallas with the Federal District Court for the Northern District of Texas, along with a Consent Decree and Settlement Agreement that requires court approval. Forty-eight states, the District of Columbia and Puerto Rico will share in the settlement. Miller said Iowa's share is $89,974.57, and that the funds will go for enforcing antitrust laws, including in the pricing of agricultural products. Miller is chair of the Antitrust Committee of the National Association of Attorneys General. "These are always complicated cases, and we are much more effective when we handle them together. I think the States are sending a clear signal that we will react strongly when we have evidence of price-fixing of any kind."
The Zeneca case was handled for Iowa by the Farm Division in Miller's Office.
In January, the States settled a similar complaint against American Cyanamid Co. -- the maker of Prowl, Counter, Pursuit and other farm chemicals -- and obtained a payment of $7.3 million for alleged price-fixing in re-sale pricing of American Cyanamid products.
"Under state and federal law it is illegal for a manufacturer or wholesaler to dictate the re-sale prices charged by independent retailers. That's an antitrust violation called re-sale price maintenance," Miller said.
"In this case, we alleged that Zeneca used its 'Stewardship Bonus Program' from the late 1980s through 1993 to illegally influence the re-sale prices set by independent distributors. We alleged that the Bonus Program illegally required dealers to peg their prices at or above a Zeneca price schedule in order to receive cash rebates. Zeneca withheld the rebates if a dealer did not follow Zeneca price schedules," he said.
The agreement prohibits Zeneca from conditioning dealer rebate payments on the re-sale prices dealers offer to farmers. It also prohibits the company from making other agreements with dealers to control or maintain the dealers' re-sale prices. The States' investigation of Zeneca began in 1995.