A federal antitrust suit was filed against several major international potash producers Sept. 11 in U.S. District Court in Minnesota. Those producers listed as defendants in the case, styled as Minn-Chem Inc. v. Agrium Inc., include Agrium, Agrium U.S. Inc., Mosaic Co., Mosaic Crop Nutrition LLC, Potash Corp. of Saskatchewan Inc., PCS Sales (USA) Inc., JSC Uralkali, RUE PA Belaruskali, RUE PA Belarusian Potash Co., BPC Chicago LLC, JSC Silvinit, and JSC International Potash Co.
The plaintiff, Minn-Chem Inc., is seeking class action status for all persons and entities who purchased potash in the U.S. directly from one or more of these defendants between July 1, 2003, and the present. The plaintiff alleges that in order to maintain price stability and increase profitability, the defendants conspired and combined to fix, raise, maintain, and stabilize the price at which potash was sold in the U.S. As a result, the plaintiff says potash prices in the U.S. increased dramatically from 2003 onward. The plaintiff is seeking injunctive relief and to recover damages, including treble damages, cost of suit, and reasonable attorneys’ fees.
Minn-Chem was identified as a Minnesota corporation based in Sanborn, Minn., that purchased potash directly from one or more of the defendants during the class period and suffered antitrust injury as a result. A Minn-Chem attorney told Green Markets the company still has a few employees but is no longer involved in manufacturing. The company used to manufacture product for farmers and cooperatives. Higher potash prices were reportedly one reason it stopped.
The suit alleges that the three Canadian producers and the three from the Former Soviet Union account for 71 percent of potash market exports, with this facilitating their ability to implement the conspiracy. In addition, the suit says there is a high degree of cooperation among competitors with overlapping ownership interests. It also says the companies have routinely held meetings during an “exchange program of mutual visits,” which “promoted the discussion of current issues affecting the potash industry and the sharing of experience.” The suit details specific meetings between industry executives and company participation in industry organizations.
The suit alleges that as a part of the conspiracy, at least in part, there were coordinated restrictions in potash production that resulted in higher prices. Specifically, it alleges that in 2006, PotashCorp and BPC jointly limited production in an effort to compel Chinese buyers to accept a price increase that would eliminate their “discount” and set a benchmark for other buyers around the world. The suit says other leading potash producers followed. The suit also points to restrictions and price increases in 2007-2008.
Green Markets will be in contact with all defendants for comment. However, as noted by Agrium on Friday morning, the lawsuit was just filed and its attorneys are now reviewing it. Mosaic had the same response for the Minneapolis Star Tribune.
The potash industry is no stranger to antitrust lawsuits and has won some and lost some in the past (GM Archives), though there have been none in several years.