Three years ago, I wrote a post on market consolidation in the agricultural and pharmaceutical industries. I commented that seed cartels were not all that different than drug cartels in the effects they have on our lives. When I did the research for an update, I expected it would be worse. I did not expect that it would be so much worse. Diversity is the sign of health – doesn’t matter whether you’re talking biology, human work teams or agricultural and pharmaceutical products. Monopolies are dangerous – it’s the old absolute power corrupts absolutely theme. Here’s the latest on seed cartels, which is fall 2017 and some earlier data, so odds are the picture is in reality even less rosy. While I use the term seed cartels, there are also pharmaceutical cartels, equipment cartels and similar groups in many markets.
Seed Cartels and Agrochemical Companies
Although there were 20 seed companies large enough to be considered for a Top 20 list in 2017, two have cornered almost 53% of the market. Monsanto and Bayer merged in 2018 and now have 30% of the seed market under their combined belts. Dow/Dupont did the same, for 22.7% of the market. The next “big” company is Syngenta, with a piddling 7.8% of market share. Mind you, this is just seeds – both also market herbicides, pesticides, fertilizers and such. In agrochemicals, it’s Bayer/Monsanto at 27.4%, Syngenta/Chem China at 26.9% and Dupont/Dow AgroScience at 18.8%, respectively. If you add in German firm BASF, these companies control 75% of the global pesticide market.
Although it’s a smaller group in this field, the picture looks much the same as it does for seed cartels. Tyson Foods is the big boy in the sandbox, with WH Group in Hong Kong as the number two. These two companies control 90% of layer poultry genetics. There are only three companies supplying nearly all of the pig breeding stock in the world.
Big pharma companies can be in the people business, the animal business or both. The top three in the animal end are Zoetis (used to be Pfizer AH), with 20% of the market, Merck/MSD at 14.5% and Sanofi/Merial AH at 11.5%. The human pharmaceutical industry made at least $1.11 trillion in 2017. The top five in 2017 were Merck, at $35.4 billion; Johnson &Johnson, at $36.3 billion; Sanofi, at $36.66 billion; Roche, with $44.36 billion in income, and the top dog, Pfizer, which brought in $52.54 billion. Please note the overlap between human and animal pharmaceutical control here.
Consolidation and Concentration
So why is this a problem? Well, the ETC group (which stands for Erosion, Technology and Concentration) has identified four major concerns. These are:
I couldn’t have said it better myself.