The Federal Trade Commission and 10 states have sued agricultural giants Syngenta AG and Corteva Inc. for giving incentives to distributors of pesticides designed to block sales of cheaper generic products, according to a Bloomberg report.
The FTC claims the two companies operate “loyalty programs” where distributors are paid to keep their purchases of generic versions of six types of pesticides below a certain threshold. The programs lead to higher food prices for consumers, the agency said, since farmers can’t purchase cheaper pesticides.
The agency claims the companies’ programs violate federal antitrust law and consumer protection laws in 10 states.
“By paying off distributors to block generic producers from the market, these giants have deprived farmers of cheaper and more innovative options,” said FTC Chair Lina M. Khan in a statement.
Corteva denied any wrongdoing.
The company said in a statement that its “customer marketing programs are fully compliant with the antitrust laws and are, in fact, pro-competitive programs that benefit both channel partners and farmers.”
It said the lawsuit threatens the investments it makes and that growers rely on to protect their crops.
Syngenta didn’t immediately respond to a request for comment.
The Biden administration has made competition and antitrust enforcement a key priority, focusing particularly on farmers and workers. On Sept. 26, the administration proposed new regulations to strengthen competition rules in poultry and livestock markets aimed at protecting farmers and ranchers in dealing with the companies that process their products.