Bayer is facing an avalanche of lawsuits because of the weed killer glyphosate. Plaintiffs blame the pesticide for their cancer.
There’s glyphosate in there: the Monsanto/Bayer pesticide Roundup on a store shelf in Belgium Photo: rtr
Bayer is being buffeted by an ever-growing avalanche of lawsuits over the weed killer glyphosate. In the U.S., the number of plaintiffs over the herbicide’s suspected carcinogenic effects skyrocketed. By mid-October, the company had been served with lawsuits from about 42,700 plaintiffs, Bayer announced Wednesday. That’s more than double the 18,400 from mid-July.
"The significant increase is apparently due to the fact that the plaintiffs’ side increased its estimated spending on television advertising in the 3rd quarter," the company said. Bayer added that "the price of the product has roughly doubled in the third quarter compared with the entire first half of this year. He added that the company intends to continue to "fight back decisively," but that the next negotiations are not scheduled until January. The head of the agricultural business, board member Liam Condon, had recently expressed confidence that the dispute over the weed killer would be settled "sooner or later."
The last three scheduled glyphosate trials in the U.S. had all been postponed recently. Mediator Ken Feinberg is trying to reach an out-of-court settlement between Bayer and U.S. plaintiffs. Bayer intends to play a "constructive" role in the mediation process, the company confirmed. So far, the company has lost three lawsuits in the U.S. in the first instance and has been ordered by juries to pay high damages.
Glyphosate is the world’s best-selling pesticide active ingredient and a symbol of chemical-driven agriculture. In Europe, there is discussion about banning the weed killer. The poison kills just about all non-GMO crops, and thus food for birds and insects. That’s why environmentalists consider it a threat to biodiversity.
Bayer makes more profit in the third quarter
In research, the question of whether the chemical glyphosate contained in Roundup has a cancer-causing effect is controversial. The U.S. Environmental Protection Agency (EPA) and also regulatory authorities in the EU and Germany concluded that glyphosate does not pose a cancer risk. In contrast, the International Agency for Research on Cancer (IARC), part of the World Health Organization (WHO), stated in 2015 that glyphosate is "probably carcinogenic in humans.
The wave of lawsuits was brought to Bayer by the multi-billion dollar acquisition of the U.S. seed giant Monsanto, which developed glyphosate. The acquisition significantly expanded Bayer’s agricultural business, making it the world’s largest supplier of seeds and crop protection products. Adjusted operating profit (Ebitda) in this business climbed by almost a quarter to 527 million euros in the third quarter, thanks to higher prices in the important Latin American market, savings and a positive currency effect. While Bayer suffered a drop in earnings in the pharmaceuticals business, the recovery in the long tepid over-the-counter health products business continued.
Overall, Bayer posted third-quarter underlying earnings of 2.29 billion euros, an increase of 7.5 percent. Net profit fell by almost 64 percent to 1.036 billion euros, although in the previous year the company posted high exceptional income. Sales rose by around 6 percent to 9.83 billion, or by a good 5 percent after adjusting for foreign exchange. For 2019, Bayer continues to expect a currency-adjusted increase in sales of about 4 percent to around EUR 43.5 billion, with underlying earnings expected to come in at around EUR 11.5 billion. Bayer has now factored into this the sale of its animal health business and its shares in the chemical park operator Currenta.