Monsanto Co. announced Wednesday that the company is under investigation by the U.S. Securities and Exchange Commission for a program that offered incentives to dealers who sell the biotechnology giant's Roundup weedkiller.
"Out of respect for the SEC and their processes, there's really not a great deal I can say at this moment," said CEO Hugh Grant in a conference call Wednesday morning. "It's focused on glyphosate, it's focused on customer incentives, it's focused on the 2009 and 2010 time frame. It's early days, but we're starting document production and we're cooperating to our full ability."
Glyphosate is the generic name for Roundup, the company's blockbuster weedkiller that once accounted for roughly half the company's business.
The SEC declined to comment, and analysts were unable to provide details about the nature of the incentives program.
"This is part of their marketing strategy. It relates to their incentives to distributors," said Horst Hueniken, an analyst with Stifel Nicolaus & Co. "That disclosure has never been made, so we're all in the dark."
Monsanto did confirm that the incentives involved distributors, not farmers. A company official also said that "incentives" was a term being used by the SEC and that Monsanto's use of the term was dictated by the agency.
The incentives were phased out this year, the company said.