Nufarm loses Roundup right
Nufarm has held the right to distribute glyphosate under the Roundup brand, owned by global agricultural biotechnology company Monsanto, in Australia and New Zealand since 2002.
But Monsanto terminated the agreement on Tuesday, sending Nufarm's shares plunging by 12 per cent to close at a 14-month low of $4.85.
Nufarm will stop selling glyphosate under the Roundup brand after August 28.
Managing director Doug Rathbone said the glyphosate market had become increasingly competitive and was generating less value for suppliers in the Australian market.
"The brand premium attached to Roundup has consequently been eroded," he said.
"We will now focus our ongoing investment in glyphosate on Nufarm's own brands where we can build long-term value on a more secure basis and ensure our cost competitiveness."
Monsanto said it had ended the deal with Nufarm following changes in the market.
Frequently Asked Questions about this Article…
Monsanto terminated the distribution agreement with Nufarm, saying it ended the deal following changes in the market. Nufarm had held the Roundup glyphosate distribution rights in Australia and New Zealand since 2002.
Nufarm will stop selling glyphosate under the Roundup brand after August 28, according to the announcement in the article.
Nufarm shares plunged 12% on the news, closing at $4.85, which was a 14‑month low at the time reported in the article.
Nufarm said it will develop its own glyphosate-based weedkillers and focus ongoing investment on Nufarm’s own brands to build long-term value and maintain cost competitiveness.
Managing director Doug Rathbone said the glyphosate market had become increasingly competitive and was generating less value for suppliers in Australia, and that the brand premium attached to Roundup had been eroded.
Monsanto stated it had ended the deal with Nufarm following changes in the market.
Nufarm had held the right to distribute glyphosate under the Roundup brand in Australia and New Zealand since 2002.
The immediate takeaway for investors is that the termination triggered a sharp share price fall and represents a strategic shift for Nufarm from selling a licensed global brand to building its own glyphosate brands. The company says it will focus on cost competitiveness and long-term value creation for its own labels.
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