Nufarm’s profits from the sale of herbicide products have fallen since 2013. Photo: Luis AscuiCrop protection manufacturer Nufarm is suing the federal government for negligence after confidential information about two of its weed killer products was handed to its competitors.
Nufarm claims it lost sales and profit margin to its key competitors – Malaysian crop protection heavyweight Kenso and local outfits 4Farmers Australia and Conquest Crops – after its secret formulas and proprietary mixing instructions were passed on to its rivals through a product approval process.
The Australian Pesticides and Veterinary Medicines Authority (APVMA) handles that process and is defending the case Nufarm has launched in the Supreme Court of Victoria seeking unspecified damages, compensation, interest and costs. The company has declined to quantify to Fairfax Media the damages it’s seeking for its loss of sales in the local herbicide market that brought in revenues of more than $400 million in full-year 2014. In recent years, Nufarm has seen the contribution from the sale of herbicide products in its Australian business wither from $417 million in 2013 to $411.9 million in 2014. For the first half of 2015 the company booked $157 million in revenues from its Australian herbicide business. APVMA chief executive Kareena Arthy declined to comment. At no point does Nufarm allege any misconduct or inappropriate behaviour by its competitors. Representatives from Kenso and Conquest declined to comment. Nufarm alleges it spent millions developing new crop products that were able to remove a particularly stubborn and herbicide-resistant rye grass from Australian farms. According to the company, the new product involved a complex mixing process and application process of two existing herbicides – triallate and trifluralin. Nufarm claims that the information it provided to APVMA to obtain a permit for the use and labelling of its new herbicide product was secret at the time. 4Farmers general manager Neil Mortimore said he was perplexed by Nufarm’s application, saying that the concept of mixing the two chemicals was “as old as the hills”. “I’d be really concerned if this case was successful as it could have major ramifications. Watch out Australian farmers your prices for chemicals are about to go up,” Mr Mortimore said. In 2009, Kenso was granted permission by the authority to replicate Nufarm’s mixing instructions on their own product labels, according to Nufarm. Nufarm alleges it raised questions over Kenso’s permit at the time and was assured the APMVA database would be updated to ensure its proprietary information was not passed on to its competitors. However, the authority allegedly failed to inform Nufarm that it had earlier in 2009 approved 4Farmers’s product and labelling, which also relied on Nufarm’s formulas.
Conquest later allegedly relied on 4Farmers’ permit in its own application for a permit for a similar product. “The APVMA owed a duty to Nufarm to take reasonable care to protect the protected information and the Nufarm mixing instructions from being exploited by Nufarm’s competitors,” the company said in its statement of claim. Nufarm also alleges APVMA committed misfeasance in public office claiming it passed on the information with “reckless indifference” and caused the company losses.