The big biotech firms came a cropper last year as consumers in Europe and Japan mounted an international boycott of genetically modified foods. And even American consumers, who until recently accepted such foods without much thought, are now starting to ask questions. Resistance on the high street has already registered on Wall Street. Firms that dreamed of combining pharmaceuticals and crops watched the value of their thriving drug businesses being dragged down by their agricultural interests. In the past six months Novartis and AstraZeneca have merged and hived off their seed and agrichemical divisions into a new subsidiary called Syngenta.
Further consolidation is likely.
Some firms will continue to benefit. Local seed companies will still be doing deals with biotechnology firms. And those firms that can reassure uneasy shareholders and keep their drug and agricultural divisions together may ultimately reap the promised synergies. But that could still be a long way off. Sales force Much of the pressure on agrochemical and seed companies has come from retailers, whose power to influence the agribusiness chain has grown along with their size.