Legal Aspects of International Business and Enterprises

Legal aspects of international business and enterprises
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Bayer In Australia
Bayer is the world's largest chemical and pharmaceutical concern, which includes three
subgroups with its headquarters in Germany. In 2016, Bayer had 115,200 employees worldwide
and more than 10,000 employees in Australia1. Bayer has a wide range of products to support the
health needs of millions of families around the world at different stages of life. These products
include Australia's #1 pregnant women's multivitamin Elevit, Menevit Men's Philharmonic ii,
and other leading brands including Berocca Performance Multivitamins, Bepanthen Scarlett,
Bepanthen Xin wound antibacterial ointment2, Bepanthen baby diaper cream, Canesten Kenny
Ting lotion, Demazin children cough oral liquid and children's cold oral solution, Penta-vite
children's multivitamins and Iberogast to quickly relieve stomach upset. Since its inception in
1863, Bayer has been a world-leading life technology company and has been investing heavily in
R&D innovation to continue to deliver innovative, healthy products of superior quality.
However, the ever-changing socio and economic conditions do not always guarantee that Bayer
will enjoy the vast market without any hindrance3. Although Bayer company has already
established its subsidiary or branch in Australia, it is always important to always evaluate the
feasibility of market so as to ensure that the economic, political and social factors risks do not
affect the operations and performance of the company. This need calls for an evaluation of legal
aspects in Australia that may positively or negatively affects Bayer’s future endeavors. The goal
1 Bayer, Australia/New Zealand, Bayer, [web page] (2018) <https://www.bayer.com.au/>
2 Bayer, Australia/New Zealand, Bayer, [web page] (2018) <https://www.bayer.com.au/>
3 M. Rockel, Internationalisation: the Strategic Challenge for Western Fine Chemicals Company
Bayer Chemicals Arising from the Growth of China. Munich: GRIN Verlag GmbH, 2005.

of the paper is therefore to determine the legislative regulatory framework that may influence the
operations of Bayer in Australia. The paper will also determine and evaluate the treaties,
conventions or agreement that have impacted on the operations and performance of Bayer in
Australia.
Legal regulatory framework
One of the legal regulatory area where Bayer is likely to face some obstacles concerns
licensing of some of its products4. Australia is a law abiding country and hence when it comes to
licensing, Australia is very strict5. Bayer’s products are being improved on a continuous basis.
Bayer, being a pharmaceutical company, needs to comply with many licensing requirements and
its operation depends on its ability to assure that its products are safe. There are many cases to
proof that Bayer might face some challenges as far as licensing of its new products is concerned.
For example, in order to be licensed to deal with genetically modified products, Bayer must have
enough proof that the products are safe and must comply with all regulatory bodies including
FAO. Recently, the company was violently attacked on the stock market, following the sentence
inflicted on the United States to the seed giant Monsanto, which the pharmaceutical group has
just bought at a high price, at the risk of a cascade of troubles court6. Following the attack, the
Bayer stock plummeted by over 12% at the Frankfurt Stock Exchange, 81.79 euros, and saw
4 C. Jasper, ‘Agribusiness giants Bayer and Monsanto clear US regulatory hurdles for $US66b
mega merger’, ABC News, http://www.abc.net.au/news/2018-05-30/bayer-monsanto-merger-
gets-green-light-from-us-regulator/9814702 (Accessed 9/18/2018)
5 M. Blakeney, Intellectual property enforcement: a commentary on the anti-counterfeiting trade
agreement (ACTA), Cheltenham, U.K., Edward Elgar. 2012

more than 11 billion euros of its capitalization go up in smoke7. The attack followed the move
taken by San Francisco court, which forced Monsanto to pay $ 289 million in compensation for
failing to warn of the dangerousness of its glyphosate herbicide, which causes cancer by
American gardener Dewayne Johnson. Australians are very sensitive to their health and there are
many regulatory bodies designed to safeguard the health of Australians. This means that Bayer
ought to be very careful to ensure that her products are safe, failure to which, the company may
not get license to operate effectively.
Another legal regulatory that is likely to affect the operations of Bayer in one way or
another is the tax laws amendments. Currently Australia revised its corporate tax to 30% or
27.5% (companies with annual turnover below AUD 2 million)8. Taxable imports and supplies
by non-residents are subject to the GST. Non-residents are required to register with the GST if
their annual turnover resulting from intra-Australian sales is greater than AUD 75,000 (AUD
150,000 for charities). Since July 1, 2017, non-residents offering digital services are required to
register with the GST if they meet one of the following conditions: the buyer is an Australian
resident, the product is made in Australia, the sale is through a locally managed business in
Australia, the sale is for the purchase of an asset that is related to Australia. It is not mandatory to
6 T. Buck, ‘US legal woes drive Bayer shares to 5-year low’, Financial Times,
https://www.ft.com/content/304d673a-a15a-11e8-85da-eeb7a9ce36e4 (Accessed 9/18/2018)
7 K. Jennewein, Intellectual Property Management: The Role of Technology-Brands in the
Appropriation of Technological Innovation. Heidelberg: Physica-Verlag Heidelberg, 2005.
8 J. Paul, and K. Ramneek, International Marketing: Text and Cases. (New Delhi: Tata McGraw-
Hill, 2008).