Bayer considers removing weedkiller glyphosate from some products in US
The move follows a judge’s rejection of a proposal to resolve future claims that Bayer product Roundup causes cancer
Bayer is considering removing the controversial glyphosate ingredient from its residential Roundup range in the US after a judge rejected a proposal to resolve future claims that the weedkiller causes cancer.
The decision by US district judge Vince Chhabria on Wednesday further compounded Bayer’s struggle to wrap up litigation inherited from the acquisition of Monsanto. In response, Bayer said it would implement a series of measures, including reviewing its US residential lawn and garden business.
While the company remains committed to the Roundup brand and the residential sector, it indicated it may no longer use glyphosate as the active ingredient for its household products. Other steps to mitigate its risks from future claims include continuing legal appeals, reassessing settlement efforts and creating a website addressing Roundup’s safety concerns.
“We have an alternative course of action: we are in charge and in control now,” Bayer CEO Werner Baumann said on Thursday on a conference call. “We continue to pursue a comparable solution. There are different ways to skin a cat.”
Bayer fell as much as 5.3%, its biggest drop in three months. The shares were down 4.2% at €52.65 in Frankfurt, valuing the Leverkusen, Germany-based company at €52bn.
In a brief order that addresses what the judge called only “the most glaring flaws” of the deal, Chhabria turned aside the complicated agreement — the second time he’s shot it down. The rejected settlement is part of a broader $11.6bn agreement to resolve Roundup lawsuits in the US from about 125,000 consumers and farmers.
Chhabria said the settlement to pay as much as $2bn to resolve future claims is “clearly unreasonable” for consumers who are exposed to Roundup but aren’t yet diagnosed with non-Hodgkins lymphoma — and may not be for a decade or longer.
Provisions in the settlement “greatly exaggerate” the potential benefits of four years of “vaguely described medical monitoring” for those who have not yet contracted the cancer, Chhabria said. Benefits of a compensation fund are “also vastly overstated” for that group, he ruled.
Glyphosate-containing products in the residential market bring in about €300m in annual revenue, according to Bayer. The company, which maintains that the herbicide is safe, would consider the ingredient change for residential uses to reduce legal risks, because 90% of plaintiffs have come from that segment. It ruled out any formula changes for the professional and agricultural space, saying there aren’t any alternatives.
“There will be no product recall,” said Liam Condon, head of the crop-science unit. “What we’re discussing with our partners is the future of the active ingredient, that’s all.”
The company will also initiate discussions with the US Environmental Protection Agency about changing the label on glyphosate-containing products, with the aim of connecting consumers to a body of studies that back the company’s view that the product is safe to use.
Elizabeth Cabraser, a lawyer representing consumers in the rejected accord, said she was disappointed by the ruling but continues to believe a multibillion-dollar class settlement is attainable. She said a deal would include, among other benefits, diagnostic assistance, compensation, free legal services, research into NHL treatment, and “Roundup label reform” to inform consumers about the science behind the link between Roundup and NHL.
The ruling is another setback for Bayer in litigation that remains a major obstacle for the company since it closed its purchase of Monsanto in 2018. The settlement process has dragged on, and more lawsuits over the weedkiller pile up almost daily.
There was a bright side for Bayer though. The company said the judge’s ruling means that cash flow this year and next will be higher because the company had “front-loaded” any possible payments that will now not come into effect.
Provisions created to address current litigation, equal to about $9.6bn, are sufficient, and Bayer has already made considerable payments, the company said
Numerous consumers objected to the settlement on a variety of grounds, saying that revisions to the earlier, rejected proposal aren’t good enough. In 2020, Chhabria rejected a $1.25bn proposal for future claims.
Bloomberg News. More stories like this are available on bloomberg.com
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