The African Centre for Biosafety (ACB) welcomes the decision made by the Competition Tribunal on 19 August 2011, to allow the ACB to intervene in the merger proceedings involving multinational seed giant, Pioneer Hi Bred’s bid to take over South Africa’s largest seed company, Panaar.

The ACB, represented by Legal Aid South Africa, and advocates Stephen Budlender and Isabel Goodman, has consistently sought to lead evidence and present argument on public interest grounds that militate against authorisation of the merger. The ACB argued in its intervention application heard before the Tribunal on the 12th August 2011, that the proposed merger would result in the concentration of market share in the maize seed industry in only two large commercial entities, namely Pioneer and Monsanto with concomitant negative consequences for small holder farmers and consumers.

Such concentration, the ACB argued, would lead effectively to the creation of a duopoly with dire consequences for food security of the country in particular and the region as a whole as well as on the viability of small scale farmers. The ACB is extremely grateful for the legal and scientific assistance provided to it.

ACB Director, Mariam Mayet, said “We are delighted that the Tribunal was persuaded to allow us to intervene in the proceedings, signalling an openness to hearing argument concerning the imbalances in the food chain and the need for protecting small scale food producers and consumers from the abuse of corporate power.”

The merger proceedings are set down for hearing before the Tribunal, 12-30 September 2011. The proceedings are centred upon the requests by Pioneer and Panaar that the Tribunal set aside an earlier ruling made by the Competitions Commission on 8th December 2010, prohibiting the merger. The Tribunal directed that the ACB present expert evidence with regard to the following 4 issues:

  1. “The effect of the proposed merger on pricing and the availability of alternative products if the merger is approved-particularly in the light of smallholder and rural markets need for open pollinated varieties of maize deed (and not just high-yielding or genetically modified varieties;
  2. The effect of the merger on smallholder farmers, small-scale commercial back-farmers and consumer choice (and in turn, the effect on food production and food security;
  3. The barriers to entry that will result in the proposed merger and, in particular, the adverse effect on smallholder farmers and small-scale commercial black farmers; and
  4. The public interest effect of the proposed merger, particularly in the light of Panaar’s extensive maize germplasm inventory and the opportunities that it presents for development”.

The Tribunal also defined the scope of the ACB’s participation broadly to include the right to cross-examine and access to information. The Tribunal’s order can be downloaded here.

Biowatch South Africa, the second applicant in the proceedings, was also granted similar leave to intervene. The ACB has also, separately, submitted a complaint to the Competition Commission to investigate the excessive market power Monsanto wields in South Africa in the maize seed and glyphosate markets.