“Life Science” Brand Fails To Win Public Acceptance And Investors Trust For GE
London/Basel, 11 October 2000 – Novartis and Astra Zeneca will today effectively accept that their involvement in genetically engineered (GE) agricultural products has damaged their shareholder values by merging and floating off their agribusiness departments under a new name, Syngenta. The move, expected to be approved by the extraordinary general meeting of shareholders today, reflects the public rejection of GE products and the growing distrust of shareholders in the financial viability of genetic engineering technology in agriculture.
In a bid to protect share prices in pharmaceutical and health products divisions, the companies are moving away from an all encompassing "Life Science" approach and separating their “Achilles heel”, the agricultural inputs and pesticides divisions. According to Novartis, the main reason for the merger is that the shares of “life science companies are traded at lower levels compared to pure pharmaceutical businesses”. (1)
“The consumer rejection of genetically engineered products has tarnished the image of the Life Science business and made the investors nervous about its financial viability. As a result of an obvious image conflict, the publicly accepted "clean" pharmaceutical companies are seeking to distance themselves from the "dirty" remains of an unwanted GE agribusiness”, said Greenpeace GE Campaigner Charlie Kronick.
In August Novartis gave in to strong consumer pressure and announced that it has eliminated all GM-ingredients from its consumer products world-wide, including Gerber baby food, Ovaltine and Wasa crackers. This situation was clearly incompatible with the promotion of GE seeds, soya and maize. The company has now dumped its GE-agribusiness and decided to concentrate on pharmaceutical & health products. As a result of public distrust on GE products, Syngenta is likely to focus its marketing on farmers, wholesalers and retailers.
"The fact that consumers, supermarkets and even Novartis and AstraZeneca do not want to deal with genetically engineered food is bound to undermine Syngenta‘s strategy.”
“Greenpeace is also deeply concerned about the effect of a further concentration of the seed market. Farmers around the world will suffer from less choices and increasing dependency on a company, whose present perspective is that of an integrated chemical and genetically engineered agro- business. Greenpeace urges Syngenta to take the opportunity of a new start to rethink fundamentally their business perspectives and to work on truly innovative, ecologically sound products and services for farming rather that extremely risky inputs for an industrialised agriculture”, Kronick concluded.
Syngenta shares will be traded on the stock markets of Zurich, London and Stockholm. Headquarters of the company is in Basel, Switzerland.
For more information: In the UK, Charlie Kronick, Greenpeace UK +44 20 7865.8228 or +44 7801 212963 (mobile); in Switzerland, Bruno Heinzer, Greenpeace Genetic Engineering Campaigner in Switzerland, Tel: + 41 794008831; Greenpeace International Press Office, Teresa Merilainen, Tel: +31 20 5236637.
(1) Novartis information brochure for its shareholders’ meeting, 11th October, 2000. end
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