Misleading Roundup Ads Cost Bayer $40M

Misleading Roundup Ads Cost Bayer $40M

Introduction

Bayer has agreed to pay nearly $40 million to resolve a class-action lawsuit claiming misleading and false advertisements over its controversial weed killer Roundup.

According to the lawsuit filed by several plaintiffs in Missouri federal court in February 2019, Scotts Miracle-Gro Products, Inc. and Monsanto Company, now owned by Bayer, face allegations that the manufacturers falsely claimed that the active ingredient, glyphosate, only targets an enzyme that is not found in humans or pets.

Monsanto, Bayer’s subsidiary, has agreed to pay $39.5 million as part of the Roundup class action settlement. The manufacturer also agreed to remove language from Roundup Weed and Grass Killer labels, which previously indicated glyphosate only affects plant enzymes.

Allegations raised by consumers state that glyphosate attacks an enzyme found in humans and some animals which can become a major cause of cancer. Bayer is actively working to resolve 13,000 plus lawsuits that have blamed the herbicide manufacturer for cancer spread. The German giant is confident of their product not causing cancer and denies linkage of glyphosate to this chronic disease. Bayer has already faced defeat in its last three cancer trials where the combined damages have summed up to $191 million. Due to the postponement of the next round of Roundup trials, there will be more time with Bayer for negotiations. 

Bayer shares were seriously attacked after they acquired Monsanto in June 2018, where their value fell by 47% in the market as the trial loss increased and new cases developed. 

Chris Loder, a US-based spokesman for Bayer stated that the current settlement of $39.5M for misleading ads will not have any impact on the ongoing negotiations. The WHO's agency for cancer research has confirmed the presence of the active ingredient carcinogen in Roundup in its report released in 2015.

Roundup, one of the most commonly and widely used weed killers, contains Glyphosate as one of its main ingredients. Glyphosate is a systemic and broad-spectrum herbicide that was patented by a U.S. company, Monsanto, in 1970. Bayer acquired Monsanto on June 7, 2018.

After the patent for Monsanto expired in the U.S. in 2000 and outside the U.S. in 1991, many other manufacturers started marketing their glyphosate products leading to a substantial increase in sales and global usage. The chemical name of glyphosate is N-(phosphonomethyl) glycine, and it blocks an enzyme in the plant, which helps in preparing amino acids and proteins, thus, killing the plants within a few days.

Initially, the users used Roundup as a non-selective herbicide just like paraquat and diquat. People attempted to use glyphosate-based herbicides to row crops, but crop damage problems restricted its use. In 1996 commercial introduction of a glyphosate-resistant soybean resulted in increased use of Roundup throughout the United States. Monsanto's "Roundup Ready" became the best-selling product of the company following the advertisement and the sales increased by around 20% per year between 1990 and 1996.

In 1996, the introduction of a glyphosate-resistant soybean resulted in the growing use of Roundup throughout the United States. Sales of Roundup increased around 20% per year between 1990 and 1996. The product was used in over 160 countries by 2015. It was mostly used on corn, soy, and cotton crops that are genetically designed to resist the chemical. But as of 2012, crops like almond, peach, cantaloupe, onion, cherry, sweet corn, and citrus have been treated by the glyphosate in approximately 5 million acres of California.

Currently, Bayer faces many lawsuits over its Roundup weed killer, but this case is different from thousands of cases faced by the manufacturer over allegations that long term exposure of glyphosate causes non-Hodgkin’s lymphoma and other injuries to the users of Roundup.

Many state court cases have already been postponed following a settlement discussion between the parties and the prominent mediator Ken Feinberg.