Roundup Ads Rise as Suits Mount -- WSJ
May 02 2019 - 03:02AM
Dow Jones News
By Jacob Bunge
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (May 2, 2019).
Roundup is getting an advertising boost after thousands of
plaintiffs have alleged that the world's most widely used
weedkiller causes cancer.
Bayer AG, the manufacturer of Roundup, and Scotts Miracle-Gro
Co., which markets it to home-and-garden retailers in the U.S.,
have spent millions of dollars this year on expanded marketing for
the weedkiller, Scotts executives said.
"We were concerned, the retailers were concerned," James
Hagedorn, Scotts' chief executive, said Wednesday on a call with
investors. So far, he said, U.S. consumers haven't abandoned the
product.
Roundup is at the center of lawsuits brought by more than 13,000
farmers, gardeners and others who blame the herbicide for causing
their cancer and seek to hold Bayer accountable. The German company
acquired Monsanto, Roundup's maker, for $63 billion in 2018.
Residential gardeners and landscapers appear to be buying more
Roundup, according to Scotts. Over the first three months of the
year, Scotts's sales of Roundup increased 20% from the same quarter
a year earlier, the company said. Many farmers, who make up the
main market for Roundup, have stood by the weedkiller, considering
it less harsh on the environment and people compared with other
agricultural chemicals.
Two juries over the past year have ruled in favor of plaintiffs
and awarded tens of millions of dollars in damages, sending shares
of Bayer about 39% lower in that time. Bayer is challenging the
verdicts, and another trial is under way in a California court.
Shares in Scotts climbed 5.4% in Wednesday's late-afternoon
trading, while Bayer settled slightly lower in European
trading.
Regulators have stood by their assessments showing the herbicide
to be safe. The Environmental Protection Agency this week
reiterated its previous conclusions that glyphosate, Roundup's main
chemical ingredient, is safe when used as directed and doesn't pose
a cancer risk. The EPA said it is in the process of renewing
glyphosate's U.S. authorization.
Bayer on Tuesday welcomed the EPA's assessment. "Today's EPA
announcement is just the latest instance of a global regulatory
agency reaffirming that glyphosate is not carcinogenic," the
company said.
Some consumer groups criticized the EPA for overlooking research
they said showed glyphosate's risks. But regulators in the European
Union and Canada have ruled similarly, in some cases after
revisiting scientific research that plaintiffs' lawyers have
questioned.
Bayer recently paid $20 million to reimburse Scotts for higher
costs related to Roundup, including increased ad spending, Scotts
executives said. Plaintiffs' lawyers have aired their own TV ads
seeking new clients in the litigation against Bayer.
"Given the environment we thought we were in, I think we spent
the money extremely well and I think you're seeing the results,"
Mr. Hagedorn said. "We're two cases into this, and it's the court
of public opinion and consumers that matters here."
A Bayer spokeswoman said the company routinely reimburses Scotts
for expenses, including ads.
Write to Jacob Bunge at jacob.bunge@wsj.com
(END) Dow Jones Newswires
May 02, 2019 02:47 ET (06:47 GMT)
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