Organization for Competitive Markets
P.O. Box 6486
Lincoln, NE 68506
Date: June 23, 2004
FOR IMMEDIATE RELEASE
Contact: John Lockie, 406-628-9850
OCM’s Michael Stumo Addresses American Antitrust
Institute on Buyer Power
Lincoln, NE ~ The Organization for Competitive Markets (OCM)
General Counsel Michael Stumo was a guest speaker during the American Antitrust
Institute’s (AAI) annual conference on June 22 at the National Press Club in
Washington, DC. Entitled “Buyer Power and
Antitrust,” the event showed that monopsony, or the Power Buyer problem, is
gaining strength as a major issue in antitrust.
AAI is considered by many
as the most authoritative antitrust think tank in the nation. In attendance
were attorneys, scholars and antitrust regulators at the state, federal and
international level. Also, in an odd
juxtaposition, S. Robson Walton, the chairman of Wal-Mart, the biggest Power
Buyer in the world, presented to the group.
At issue was the power of dominant firms that have the incentive and the
ability to cause economic harm to suppliers in all sectors of the economy
including health care, retail food, agriculture, and professional sports.
Michael Stumo presented on
buyer power in agriculture. Stumo’s
speech centered around the Pickett v. Tyson Fresh Meats case as well as other systemic market problems in
commodity markets.
"We usually think of
monopolies in antitrust law. A monopolist is a powerful seller that raises
prices wrongfully to harm consumers. But farmers and ranchers generally deal
with the mirror image ‘monopsony’ power," Stumo told attendees.
"Agriculture’s monopsonists are power buyers that may use their market or
bargaining power to lower prices or extract other concessions from suppliers
such as agricultural producers.
Contrary to the views of the naïve-wing of the Chicago School, buyer
power does not correlate with consumer benefit.”
Stumo discussed the fact
that the food and agricultural sectors of the U.S. economy tend to produce more
price-manipulation problems than any other sector. He also pointed to OCM’s
vision of a regulatory system that facilitates agricultural markets that are
fair, accessible and competitive as opposed to the current unfair, closed and
anticompetitive markets that producers are forced to market within today.
"Agricultural markets should be viewed as akin to the stock markets,"
commented Stumo. “Without market
facilitating rules, they break down into chaos, lack of confidence, and market
access problems.”
"When OCM was founded
in 1997, the monopsony issue was foundering the backwater of antitrust thought
and practice. But now, it is becoming a major issue, in part because of OCM’s
work. We appreciate the efforts of the American Antitrust Institute to bring
more attention to the fact that Power Buyers can harm people and the economy
just as much as Power Sellers."
Stumo is recognized
nationally as a leading authority on agricultural antitrust and competition
issues. He is an attorney with Domina Law pc, LLO in Omaha, NE, which focuses its
practice in the area of complex litigation.
The Organization for Competitive Markets (OCM) is a multidisciplinary,
nonprofit group of farmers, ranchers, academics, attorneys and policy makers
dedicated to reclaiming the agricultural marketplace for independent farmers,
ranchers and rural communities. OCM
helps lead the Cattlemen’s Competitive Market Project which is a voluntary
contribution program funding the effort to increase demand for U.S. cattle and
beef in open and competitive markets.
OCM also established the Hog Competition Fund, which is re-establishing
competitive markets in the hog sector.