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How Roundup lawsuits could give China an edge

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Bayer is fending off thousands of lawsuits tied to weed killer Roundup, and the payouts are getting bigger with about 113,000 of 167,000 resolved and 54,000 remaining in a handful of states. 

The product contains glyphosate, a chemical that plaintiffs claim causes cancer. Earlier this year, a jury awarded $2.25 billion to a man who used the product and developed cancer. 

Monsanto, the maker of Roundup, was purchased by Bayer in 2018 for $63 billion in what was the largest acquisition in the company’s history. It made the industrial giant the only U.S. supplier of glyphosate, a key crop protector from bugs and weeds, which is considered safe by the Environmental Protection Agency. Still, costly legal trials are making their way through the courts. 

CEO Bill Anderson, who took over in June, is now tasked with managing the potential of spiraling costs. 

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“Another major challenge is litigation. This is a huge burden on our financials and also on our ability to invest in better medicines and solutions to feed the world,” Anderson said during the company’s March earnings call with investors, while also reiterating the company’s commitment to “defend ourselves vigorously.” 

Roughly $16 billion has been set aside for litigation, according to sources. 

Shares of Bayer have lost 22% this year through Friday. 

Bayer’s legal woes may also be giving China, which already produces 70% of crop production products, according to the USDA, an even bigger edge. 

Truck gathers corn crop yield

“I’m worried about what some of this — the litigation that’s going on, the discussion with Roundup, glyphosate — how this is costing companies like Bayer and not moving money into research and development,” Kip Tom, former United States ambassador to the United Nations Agencies for Food and Agriculture during the Trump administration, told FOX Business. 

I worry about us offshoring too much of our supply chain that’s used to produce food, fiber and energy and the other many products that come from agriculture. I don’t want to offshore from the Chinese any longer. All they have to do is turn the kill switch on, and we’re done. So, with what I see going on here with glyphosate, we’re going to quickly probably offshore at some point in time. We’re already seeing it today.”

Tom delivered a similar message to lawmakers in March. 

“Americans need to understand that our national security is dependent upon our food security; Americans cannot take our food systems for granted,” he told lawmakers. 

Farm scene

While Bayer’s litigation issues are far from over, the company has found some recent success in its defense. Last week, a Missouri judge slashed a $1.56 billion settlement to $611 million for three individuals, Reuters reported, noting the company will still appeal. 

Bayer did not respond to FOX Business’ request for comment.

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