Rattled by litigation risk, herbicide and pesticide giant, Bayer, says it will be replacing glyphosate-based products in the US residential lawn and garden market with alternative formulations in 2023 as part of a five-point plan to contain legal actions.
The company’s shares dropped as much as five percent after a US judge rejected its plan to try and limit the cost of future class action claims that its Roundup weedkiller causes cancer.
Apparently shaken, Bayer is questioning the future sale of glyphosate-based products to consumers in the US and plans to settle around 30,000 legal claims, according to Reuters. This is coming after the judge called Bayer’s plan to end years of litigation “unreasonable”.
Finance chief, Wolfgang Nickl, was reported as saying in an analyst call when asked if the estimate of the potential financial burden had been revised: “We will continue to assess financial risks as we move forward,”
Bayer will be spared payouts related to future cases it had outlined in its plan for this year and next but will continue to set aside billions for the risk of further claims, according to the news source. Investors were less optimistic with shares falling as much as 5.3% and trading 4% lower at 1044 GMT.
The company is seeking to ask the US Supreme Court to reverse the losses suffered in jury trials and appellate courts which came despite the product being deemed safe by the US Environmental Protection Agency.
About 125,000 people have alleged Roundup caused their non-Hodgkin lymphoma and cases involving 96,000 of those have been resolved with a $9.6 billion settlement which also included provisions for the remaining claims.
Bayer Chief Executive, Werner Baumann, was reported as saying, “we are determined to resolve the Roundup litigation and minimize the risk to our company from the existing and potential future lawsuits.”
Announcing a new plan after the ruling, Bayer said it “will immediately engage with partners to discuss the future of glyphosate-based products in the US residential market,” which accounts for most cancer claims.
Bayer that acquired Roundup with its $63 billion purchase of Monsanto in 2018, pointed out that demand for the herbicide has remained robust throughout the litigation.
However, glyphosate-based products will remain available to the agricultural sector though more than 90 percent of the Roundup litigation claims have come from the US residential lawn and garden market business.
Interestingly, Bayer has resolved about 96,000 cases. But, about 30,000 remain outstanding. The herbicide and pesticide giant in a statement said the move to withdraw glyphosate-based products from the domestic-user market was exclusively to manage litigation risk and not because of any safety concerns.
As the vast majority of claims in the litigation came from lawn and garden market users, the action would largely eliminate the primary source of future claims beyond an assumed latency period.
The company said there will be no change in the availability of its glyphosate formulations in the US professional and agricultural markets.
