EC raids European offices of US food Giants Cargill and Bunge for Possible Anti-Trust Violations
The European Commission conducted surprise raids on Cargill, Bunge LTD, and multiple grain distributors in two European countries in July. Cargill is the world’s largest agribusiness firm and the second-largest private company in the United States. The Commission suspects Cargill, Bunge and additional unnamed companies of fixing prices of grain. The grains in question are used for both human and non-human animal consumption.
The Commission does not announce the names of firms during ongoing investigations, but Cargill and Bunge publicly admitted that the Commission visited its Italian offices. Cargill is headquartered in Minneapolis and Bunge in White Plains, New York.
The raids come at a time when the prices of many grains, including wheat, corn, soybean and rice, are at an all time high across continents. Prices have rose steadily during the last six years due to a variety of reasons, including increased demand and production difficulties related to climatic events.
Cargill’s revenues were $88.3 billion in 2007 and recently announced a 67% jump in profits for the fourth quarter of fiscal year 2008. The firm is well known for aggressive expansion in operations across world markets. Cargill boasts more than 158,000 employees in 66 countries, and has successfully integrated operations vertically – from production to distribution – and horizontally – through industries involving cows, pigs, and turkeys – to be one of the world’s largest transnational corporations.
Bunge is a major player in the agribusiness, including processing and selling grains and seeds. Bunge is also a major player in fertilizer markets. It recently announced year-end earnings of 60% for fiscal year 2008, including a quadruple jump in earnings during the second quarter.
Ongoing concerns of food security and costs are likely continue, and surging profits for Cargill and Bunge are excepted through at least 2009. The two firms, along with competitors Archer Daniels Midland, Monsanto, and Dreyfus, account for 80% of the world’s production and trade of grains.
A Commission statement on the recent raids indicate that a larger investigation may be forthcoming: “Surprise inspections are a preliminary step in investigations into suspected cartels.” In at least one previous anti-trust investigation, the European Commission targeted just a few firm headquarters in hopes that the raids will unearth evidence of a larger cartel operation.
These raids may also indicate that one of the firms has approached the European Commission with evidence of anti-competitive conduct. The Commission’s leniency program provides a significant reduction in future fines to firms who voluntarily and fully cooperate with an investigation and prosecution.
About the author: Jason Hardy is an avid writer on legal issues, including international writing about many subjects including european antitrust lawsuits. Eu competition law interests Jason particularly. He resides in Seattle, Washington.
The Commission does not announce the names of firms during ongoing investigations, but Cargill and Bunge publicly admitted that the Commission visited its Italian offices. Cargill is headquartered in Minneapolis and Bunge in White Plains, New York.
The raids come at a time when the prices of many grains, including wheat, corn, soybean and rice, are at an all time high across continents. Prices have rose steadily during the last six years due to a variety of reasons, including increased demand and production difficulties related to climatic events.
Cargill’s revenues were $88.3 billion in 2007 and recently announced a 67% jump in profits for the fourth quarter of fiscal year 2008. The firm is well known for aggressive expansion in operations across world markets. Cargill boasts more than 158,000 employees in 66 countries, and has successfully integrated operations vertically – from production to distribution – and horizontally – through industries involving cows, pigs, and turkeys – to be one of the world’s largest transnational corporations.
Bunge is a major player in the agribusiness, including processing and selling grains and seeds. Bunge is also a major player in fertilizer markets. It recently announced year-end earnings of 60% for fiscal year 2008, including a quadruple jump in earnings during the second quarter.
Ongoing concerns of food security and costs are likely continue, and surging profits for Cargill and Bunge are excepted through at least 2009. The two firms, along with competitors Archer Daniels Midland, Monsanto, and Dreyfus, account for 80% of the world’s production and trade of grains.
A Commission statement on the recent raids indicate that a larger investigation may be forthcoming: “Surprise inspections are a preliminary step in investigations into suspected cartels.” In at least one previous anti-trust investigation, the European Commission targeted just a few firm headquarters in hopes that the raids will unearth evidence of a larger cartel operation.
These raids may also indicate that one of the firms has approached the European Commission with evidence of anti-competitive conduct. The Commission’s leniency program provides a significant reduction in future fines to firms who voluntarily and fully cooperate with an investigation and prosecution.
About the author: Jason Hardy is an avid writer on legal issues, including international writing about many subjects including european antitrust lawsuits. Eu competition law interests Jason particularly. He resides in Seattle, Washington.
Labels: eu competition law, eu law, european antitrust lawsuits
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