Agribusiness giant ADM will dissolve a joint venture with US corn sweetener company after the two companies stuck an agreement under the auspices of a federal judge, reports the Washington Post.
The $756 million sale of Minnesota Corn Processors to Archer Daniels Midland in September 2002 had heightened concerns among antitrust experts over market concentration in two key agricultural markets - ethanol and fructose.
At the time, US competition watchdog Organization For Competitive Markets (OCM) criticised the 'failure' of the US Department of Justice Antitrust Division (DOJ Antitrust) to "adequately explain why it is allowing Archer Daniels Midland Company (ADM) to purchase Minnesota Corn Processors (MCP). It is beyond comprehension why federal antitrust authorities would allow it to increase its market share in three major corn by-product markets".
The United States Department of Justice later filed a complaint alleging that ADM's acquisition of MCP "'would substantially lessen competition in the markets for corn syrup and high-fructose corn syrup (HFCS) in the United States and Canada".
The transaction would have eliminated the competition between ADM and MCP, making anti-competitive co-ordination among the few remaining corn wet millers more likely in those markets, said the government.
According to the article in the Washington Post this week, under the government-negotiated agreement, approved by US District Judge John D. Bates, ADM must dissolve MCP's joint venture for selling sweetener and, to the fullest extent possible, allow Corn Products International to compete with ADM.
ADM reported corn syrup sales in 2001 of $66 million and $480 million of high-fructose corn syrup.