Germany-based Bayer said on July 29 that it plans to remove glyphosate, the active ingredient in the popular herbicide Roundup™, from the U.S. residential lawn and garden market beginning in 2023. The announcement came as part of a broader list of actions the company is taking to address future Roundup litigation risk.
“This move is being made exclusively to manage litigation risk and not because of any safety concerns,” Bayer said. “As the vast majority of claims in the litigation come from Lawn & Garden market users, this action largely eliminates the primary source of future claims beyond an assumed latency period. There will be no change in the availability of the company’s glyphosate formulations in the U.S. professional and agricultural markets.”
Bayer reported in May (GM May 28, p. 30) that it planned to reassess its activities in the U.S. lawn care market after U.S. District Judge Vince Chhabria on May 26 rejected a proposal for the company to pay as much as $2 billion to resolve future claims that its Roundup herbicide causes cancer.
Bayer, which took over Roundup as part of its 2018 acquisition of Monsanto Co. for $63 billion, reached the $2 billion settlement earlier this year (GM Feb. 5, p. 32). The rejected settlement is part of a broader $11.6 billion agreement to resolve Roundup lawsuits in the U.S. from about 125,000 consumers (GM June 26, 2020).
Bayer said it will replace glyphosate in the U.S. lawn care market with “new formulations that rely on alternative active ingredients.” The company also detailed other aspects of what it calls a “five-point plan” to address future Roundup litigation risk, including filing a petition with the U.S. Supreme Court in August seeking review of a lower court verdict that found Bayer liable in the case of a California man, Edwin Hardeman, who claims that his non-Hodgkin’s lymphoma was caused by exposure to Roundup.
If the Supreme Court declines to hear that case, Bayer said it set aside an additional $4.5 billion in the second quarter to manage anticipated claims through settlement and litigation.
“We want to provide comfort to our investors that the glyphosate litigation exposure should now be reasonably accounted for and leaves significant upside in the event of a favorable Supreme Court decision on the case,” said CEO Werner Baumann during an investor call.
“It is important for the company, our owners, and our customers that we move on and put the uncertainty and ambiguity related to the glyphosate litigation behind us,” he continued. “This clarity should also allow informed investors to direct their focus on operational performance, the quality of Bayer’s businesses and its intrinsic value.”
Bayer also said it will engage in discussions with EPA about Roundup labels, with the goal of providing more scientific information to users. It also plans to set up a new website by the end of 2021 with information on scientific studies related to Roundup safety to provide more transparency to purchasers.
“We have set up a very strong team that reports directly to the Board of Management and is laser focused on the further execution of our five-point plan, while the Board of Management will now fully concentrate on business performance and strategy execution,” said Baumann.