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American Cyanamid pays $7.3 million in antitrust settlement

January 30, 1997

KANSAS CITY, Mo. (AP) _ American Cyanamid Co., one of the world’s largest manufacturers of agricultural chemicals, will pay $7.3 million in a multi-state settlement to resolve federal charges of price fixing.

Missouri Attorney General Jay Nixon on Wednesday filed a complaint and settlement agreement in federal court in Jefferson City on behalf of all 50 states, Puerto Rico and the District of Columbia. The settlement becomes final if approved by the court.

Nixon and the other attorneys general charged that American Cyanamid offered farm chemical dealers rebates only if its products were sold at or above retail price.

``By setting artificial floor prices, American Cyanamid caused many farmers to pay higher prices for crop protection chemicals,″ Nixon said in a statement. ``Many farmers who relied on dealers’ recommendations to purchase Am Cy products never realized that the dealers benefited from guaranteed profits when they recommended those products.″

Sharon McCullen, a spokeswoman for American Cyanamid’s parent company, American Home Products Inc. of Madison, N.J., said the company believes its promotion programs were legal. The company chose to settle to avoid the burden and expense of a court fight, she said.

The charges covered a period from 1989 to mid-1995. They alleged American Cyanamid, which sold $1 billion in farm chemicals in 1995, offered rebates of up to 12 percent through two programs.

A Federal Trade Commission complaint detailing the charges in the case said American Cyanamid entered into written agreements with dealers that prevented dealers from getting rebates on sales made below the specified minimum resale price. Dealers overwhelmingly accepted the offer by selling at or above the specified minimum prices, the FTC said.

Nixon said the programs violated state and federal antitrust laws and Missouri consumer protection laws.

The settlement would prevent American Cyanamid from making resale price a condition in the dealer’s rebate, or otherwise influencing resale price.

The FTC filed a separate settlement agreement with American Cyanamid on Thursday.

Additional FTC conditions would run for three years from the effective date of the settlement.

For three years, American Cyanamid would have to clearly state _ on price lists, advertising or catalogs that list suggested resale prices _ that dealers are free to determine product prices.

The company also would have to send the statement to all dealers, distributors, officers, management employees and sales representatives.

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