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BUSINESS & REGULATION: Pioneer Hi-Bred challenges ruling block its acquisition of Pannar Seed (South Africa)



                                  PART 1


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TITLE:   SA BIOTECH COMPANY WANTS TO OVERTURN COMPETITION RULING

SOURCE:  Business Day, South Africa

AUTHOR:  

URL:     http://www.businessday.co.za/articles/Content.aspx?id=135158

DATE:    23.02.2011

SUMMARY: "DUPONT biotechnology subsidiary Pioneer Hi-Bred is appealing to the Competition Tribunal to overturn the Competition Commission?s decision to block its acquisition of Pannar Seed. Pioneer Hi-Bred is arguing that the original ruling was based on unfounded prejudices against genetically modified organisms and multinationals."

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SA BIOTECH COMPANY WANTS TO OVERTURN COMPETITION RULING

DUPONT biotechnology owned Pioneer Hi-Bred wants to purchase Pannar Seed

DUPONT biotechnology subsidiary Pioneer Hi-Bred is appealing to the Competition Tribunal to overturn the Competition Commission?s decision to block its acquisition of Pannar Seed.

Pioneer Hi-Bred is arguing that the original ruling was based on unfounded prejudices against genetically modified organisms and multinationals.

The Competition Tribunal has agreed to hold a public hearing, at which other parties will also make representations, as part of a process expected to end with a final hearing in September. Pioneer and Pannar have submitted written representations.

Pioneer says the few parties opposing the merger have suggested its proposed partnership with Pannar is about genetically modified organisms. ?While biotechnology traits can help increase maize yields, this partnership is about improving overall farmer productivity by breeding hybrids with the best plant or naturally occurring genetics and providing technical advisory services to farmers,? Pioneer said.

?Opponents have also criticised the partnership because Pioneer is a multinational business. Pioneer is committed to preserving the brand and image of Pannar. By partnering with Pioneer, Pannar has a much better chance to preserve its genetics and brand business and grow in SA than it can on its own.?

Pioneer and Pannar said the deal had been approved by competition authorities in other African countries which had to be notified ? Zambia, Tanzania, Malawi, Kenya, Namibia and Swaziland. Pioneer said the deal would expand the two businesses? existing South African research capabilities, making SA one of Pioneer?s major research hubs outside the US.



                                  PART 2

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TITLE:   THE POLITICS OF FOOD

SOURCE:  Mail & Guardian, South Africa

AUTHOR:  Glenda Daniels

URL:     http://mg.co.za/article/2011-02-18-the-politics-of-food

DATE:    18.02.2011

SUMMARY: "A small Non Government Organisation is set to challenge a giant multi-national in the Competition Tribunal next week about who can intervene in the public interest in matters affecting our food. Seed company Pioneer Hi Bred, owned by DuPont (one of the world?s largest chemical companies) is opposing the bid by NGO, African Centre for Biodiversity, to intervene in hearings about Pioneer?s attempt to take over a South African seed company, Pannar."

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THE POLITICS OF FOOD

A small Non Government Organisation is set to challenge a giant multi-national in the Competition Tribunal next week about who can intervene in the public interest in matters affecting our food.

Seed company Pioneer Hi Bred, owned by DuPont (one of the world?s largest chemical companies) is opposing the bid by NGO, African Centre for Biodiversity (ACB), to intervene in hearings about Pioneer?s attempt to take over a South African seed company, Pannar.

ACB argues that Pannar is an important South African asset in delivering commercial seed for a staple food ? maize.

Should Panner be sold to Pioneer, two foreign multi-nationals, DuPont and Monsanto (the dominant player in seed markets across the globe) will effectively control the entire maize seed market in South Africa.

"Such a situation would have the serious potential for collusive practices and other anti-competitive behaviour to the detriment of both the consumer and small farmers," ACB said in an affidavit.

The affidavit supports its bid to be included in the deliberations of the Competition Tribunal.

ACB is active in trying to protect Africa's biodiversity, traditional knowledge and food production systems ? especially from threats posed by genetic engineering.

Both Pioneer and Pannar are opposing ACB?s bid to intervene. The application to intervene will be heard on February 23.

Pioneer regulatory manager of Pioneer, Kulani Machaba, argued in his affidavit that ACB failed to make a proper case and that the NGO?s allegations were "broad, unsubstantiated and vague".

The ACB failed to "demonstrate sufficient material interest in proceedings" or to submit evidence of relevance to the competition and public interest.

Cosatu affiliated union the Food and Allied Workers Union (FAWU) has also written to the Tribunal seeking to intervene, citing concerns about food security and lack of competition, especially in the provision of genetically modified seeds, which make up some 60% of South African maize production.

FAWU wrote: "For whatever eventuality, it will be dangerous for a country like ours to effectively hand ownership and production of seeds to foreign companies."

The public interest concern is about food security arising out of foreign ownership, Fawu said.

ACB points out that Pannar has an extensive "germplasm inventory" ? a bank of its own locally-developed seed varieties ? and a considerable reach in African markets.

A merger with Pioneer means "the valuable and diverse germplasm inventory owned by Pannar would vest in the hands of one of the largest multinational agro chemical companies".

The NGO also warned against the over-reliance on genetically modified (GM) seeds that the takeover would promote.

ACB noted that Pioneer and Pannar told the Tribunal the proposed merger would have enormous benefits for South African agriculture, and contribute to food security and economic development.

"This submission does not take into account that there are major concerns in many quarters around these issues, namely food safety issues pertaining to GM maize, the onerous conditions under which farmers who use GM maize contract with seed distributors (cross licensing agreements, patents, etc), the imminent disappearance of small scale farmers involved in the farming of non GM maize, etc."

The NGO points out that while biotech traits provide yield gains in the short term, in the long term this is not necessarily the case.

"Farmers are also experiencing the emergence of weeds and insects that have developed resistance to the herbicide tolerant and insect resistant GM maize and soya varieties."

High yields can also produce perverse effects, ACB argues: "In the last agricultural marketing year South Africa?s farmers produced a 6 million ton surplus, which has caused maize prices to fall so far that industry bodies fear up to 30% of them could be rendered insolvent."

Pioneer counters: "This is a specialist Tribunal that deals with competition issues. The issues which legitimately interest the [ACB] are not, in fact, competition issues but are issues relating to whether or not GM seed should be allowed in South Africa at all."

What is GM food?

Genetically Modified (GM) food is food produced artificially by a technological process. Genes are taken from unrelated species such as viruses or bacteria and inserted into food crops. The major GM crops grown worldwide are maize, soybean, canola and cotton. GM crops are either eaten directly by humans, used as animal feed, or used as ingredients in processed foods.

Why should we be concerned?

Feeding studies conducted on animals have revealed alarming results, with damage to internal organs reported. Evidence is emerging that weeds and pests have developed resistance to GMOs. Because GM crops can be patented, a small number of extremely powerfully companies have been able to exert control over local and global food systems.

What GM crops are grown in SA?

GM maize, soybean and cotton. SA is the only country in the world that grows a GM staple food. Last year nearly 60% of all maize seed sold in the country was a GM variety.