By Jacob Bunge
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (February 7, 2020).
Canadian antitrust authorities are investigating agricultural
companies including Bayer AG, Corteva Inc. and BASF SE, over
allegations the companies sought to block a tech startup that aims
to shift North American farmers' purchasing online.
Canada's Competition Bureau plans to seek records and
communications from the crop-seed and chemical makers, as well as
from farm-supply wholesalers like Cargill Inc. and Univar Solutions
Inc., according to documents detailing the investigation that were
filed Jan. 30 in Canadian federal court.
The civil inquiry follows a complaint to the agency from
California-based online retailer Farmers Business Network Inc., or
FBN. The seed, pesticide and wholesaling companies allegedly
stopped supplying in 2018 the startup's newly acquired Canadian
business, and some company officials urged farmers and others in
the industry not to do business with FBN, according to the court
documents filed by the Competition Bureau.
A Competition Bureau spokesman confirmed the ongoing
investigation. Representatives of Bayer, Corteva, BASF, Univar and
Cargill said they intend to cooperate with the investigation.
Representatives for Bayer, Corteva and Cargill said their
conduct didn't violate Canadian antitrust rules. A BASF spokeswoman
didn't comment on the allegations.
The dispute comes as established agricultural companies and new
tech-sector entrants compete to steer a technology revolution
reshaping the farm sector.
Crop-seed developers, grain companies and tractor makers are
racing to gather data from farmer customers on everything from corn
yields to soil conditions, using it to develop farm-management
services and improve their products. Startups like FBN, Indigo Ag
Inc., Conservis Corp. and Farmobile Inc. are pitching software and
gadgets to help farmers manage crops and sell grain, often
independent of big agriculture companies.
Farmers Business Network, founded in 2014 by former Google and
venture-capital executives, is developing an Amazon.com-like online
platform allowing farmers to order pesticides, seed and other
agricultural supplies delivered directly to their farm.
The California-based company has secured more than $300 million
in funding since its launch, including investments from Kleiner
Perkins and GV, the venture-capital arm of Google parent Alphabet
FBN aims to undercut established farm retailers on price, while
building a farmer-sourced database for seed and chemical
performance that lets paying members compare products and prices.
Its effort to develop an online agricultural marketplace has hit
resistance, though, as FBN has said the world's main suppliers of
high-tech seeds and pesticides generally have refused to sell to
the startup, leaving it reliant on generic chemicals while
developing its own line of seeds.
"We've faced an extreme amount of resistance from the industry
at being able to bring what should be very basic services to
growers," said Charles Baron, FBN's co-founder and chief innovation
Seed- and pesticide-company officials have said they prefer to
work with bricks-and-mortar retailers with local expertise who can
provide on-the-spot service to farmers.
Canadian antitrust authorities are investigating how major farm
suppliers responded after FBN in March 2018 acquired a
Saskatchewan-based agricultural retail business, which FBN planned
to use as an entry point to introduce its platform in Canada.
Though the Saskatchewan operation previously had done business
with Bayer, Corteva, BASF, Cargill, Univar and other companies,
those companies are said to have stopped after FBN's acquisition,
according to the Competition Bureau's court filing.
"I believe that the conduct under inquiry impedes or prevents
FBN's marketing of many significant branded Crop Inputs in Western
Canada," wrote Daniel Jensen, a senior competition law officer with
the agency, in the filing.
The agency is seeking court approval to request companies' email
and telephone records relating to FBN's business in Canada, along
with information on those companies' supply deals with other
retailers and policies regarding online sales.
Some documents already obtained by the agency could suggest a
coordinated effort against FBN, agency officials wrote in the
"FBN is a data company that wants to collect and aggregate data
to eventually sell for a profit to companies that will use the data
to make farmers grow us food for nothing!" wrote Neil Douglas, a
Univar executive, in an April 2018 email sent to the wholesaler's
agricultural suppliers, included with the agency's filing.
A Univar spokesman said that the company decided to stop doing
business with FBN because the two companies' objectives didn't
Write to Jacob Bunge at email@example.com
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