Bayer AG got more bad news this week as the Austrian parliament voted to ban glyphosate, the active ingredient in the company's legacy flagship product, Roundup. One member of the parliament told the media, “We want to be a role model for other countries in the EU and the world.” Other European countries have passed partial bans and severe restrictions on the sale and use of glyphosate, but Austria is the first EU member to ban the herbicide outright.
Other countries that have banned the substance include Bermuda, Saudi Arabia, and Malawi. Vietnam, which bore the brunt of an earlier Monsanto product during the conflict that raged in the late 1960s, banned the import of all glyphosate-based weed killers this past March after a San Francisco jury found glyphosate liable for a couple's lymphoma.
Despite the bans and restrictions on glyphosate, as well as findings by the International Agency for Research on Cancer, both the European Chemicals Agency and the US Environmental Protection Agency have continued to declare the weed killer to be safe and not a cancer danger.
The government of the EU has approved the use and sale of Roundup through 2022, which may nullify Austria's total glyphosate ban. According to a representative from the Austrian Ministry for Sustainability and Tourism, the European Commission has 90 days to file an objection and possibly overrule the ban.
Austria's market for glyphosate is a small one. The ban would have little effect on sales of Roundup and other glyphosate-based herbicides, which generated approximately $5 billion in sales in 2016. Nonetheless, the Austrian ban is a bellwether for increasing popular and political opposition to glyphosate.
Bayer has held firm in its insistence that glyphosate is “perfectly safe” when used according to the instructions, and continues to fight the judgments against it. Nonetheless, its defense of the product is starting to show some cracks in the face of tumbling stock prices and a shareholder revolt.
Recently, Bayer announced that it would spend $5.6 billion over the next decade for research and development of more “environmentally friendly” methods of weed control and offers of “greater transparency.”
It may not help. While there may be conflicting evidence about the carcinogenicity of glyphosate, Bayer has no definitive method for proving that it is as safe as is claimed. Safety studies conducted by Roundup's original manufacturer, Monsanto, have been called into question over revelations that company “scientists” ghostwrote much of the “research” that was submitted to the EPA.
According to a recent article published on the investment website Seeking Alpha, if only 1 percent of the 13,400 pending glyphosate cases against Bayer is successful, it could wipe out shareholders' equity altogether.
Bayer recently announced that it had hired outside legal counsel in order to advise the board on glyphosate litigation, suggesting that a global settlement may be on the horizon. However, unlike other corporate defendants that pull products off the market in such situations, Bayer appears to be looking for “a workable solution that continues to enable use” of glyphosate.