Cargill Inc., Bayer AG, BASF and other agriculture companies are under investigation by Canada’s antitrust authorities for allegedly trying to block a tech startup’s growth there.
Canada’s Competition Bureau is investigating the matter, according the Wall Street Journal, citing Canadian court documents filed last Thursday. Authorities are seeking e-mail and phone records from five agribusinesses, including Corteva Inc. and Univar Solutions Inc., related to the California-based startup Farmers Business Network Inc. (FBN).
The investigation was prompted by a civil complaint that FBN submitted a year ago to the agency alleging that one of the agriculture companies stopped selling seeds and crop inputs to a Canadian business that FBN had recently acquired. FBN claims the company also urged farmers not to do business with the tech company, which is trying to shift North American farmers’ farm supply purchases online.
In exploring the claims, the Competition Bureau widened its lens to look at other agriculture companies, including Cargill, operating in the region.
FBN, founded in Silicon Valley by former Google executives and venture capitalists, is trying to build an online marketplace for farmers to buy seeds, pesticides and other ag supplies, much like Amazon has done for consumers with everyday goods.
The company is part of a growing wave of ag-tech startups seeking to disrupt the existing model dominated by the big names such as Minnetonka-based Cargill. Minneapolis-based Conservis Corp. is another disrupter, selling farm management software aimed at giving farmers more control.
FBN’s model cuts out the middleman and aims to beat traditional farm retailers on price, with the long-term goal — like many ag-tech companies — of building a database for seed and chemical performance.
The seed, pesticide and farm-supply companies being investigated have said they prefer to work with on-the-ground retailers who have local experience vs. those who sell remotely, according to the Wall Street Journal. But FBN says the behavior seems more targeted than that.
In March 2018, FBN bought a Saskatchewan-based agricultural retail business as a way to introduce the brand to Canadian growers. FBN claims that the agriculture companies, which had previously sold to this retailer, stopped doing business with them after the acquisition.
Representatives of all five companies told the Journal they will cooperate with the investigation. In a statement Thursday, Cargill denied violating Canadian antitrust rules.
“Cargill conducts business in a legal, ethical and responsible manner in each country where we do business — and Canada is no exception,” Cargill said in the statement.