AGCM

PRESS RELEASE

PLANT PROTECTION PRODUCTS SECTOR: ANTITRUST AUTHORITY LAUNCHES INVESTIGATION INTO POSSIBLE ABUSE OF DOMINANT POSITION BY BAYER CROPSCIENCE AG AND BAYER CROPSCIENCE

Alleged obstruction of the permit renewal process for competitors in the market for fosetyl-based fungicides, which serve to combat peronospora on grapevines

On February 18th, 2010, the Autorità Garante della Concorrenza e del Mercato decided to launch an investigation to determine whether Bayer Cropscience Ag and Bayer Cropscience S.r.l., two Bayer companies operating in the market for plant protection products, abused their dominant position in the market for systemic fungicides used against peronospora on grapevines.
According to the complaint filed by the European Union Fosetyl-Aluminium Task Force, which is made up of a group of companies in the plant protection products sector, Bayer is purported to have impeded the document preparation process required of its competitors in order to renew their permits for the commercialization of fosetyl-based plant protection products. As prescribed by a European regulation that restricts testing on vertebrate animals, permit renewal is contingent on gaining access to various studies conducted by Bayer. This regulation also obliges the studies’ proprietors to grant equal, transparent and non-discriminatory access to any company submitting a legitimate request. For their part, Bayer provided Helm with access to the studies.
According to the accusations, however, Bayer intentionally prolonged the negotiation process involved in granting this form of access to its competitors. The delays that Bayer's obstructionist conduct caused in the conciliation procedure, which is prescribed in the Ministerial Decree of 2007, were so extensive that the Ministry of Health was eventually forced to revoke the task force members' permits for marketing fosetyl-based products in Italy. Disqualified from permit renewal at this point, the only option left for these companies was to re-apply for new permits, a process which requires new scientific documentation whose preparation would delay their re-entry into the market by an additional 3 years.
As a consequence, Bayer increased its market share for fosetyl-based fungicides from 73 to 87%, and in 2009 it raised its prices for fosetyl-based products by more than 10 percent.
The interested parties were served notice of the investigation today during the course of inspections conducted in collaboration with Special units of the Guardia di Finanza (Italian Tax Police) in Italy.


Rome - February 23rd, 2010