FRANKFURT (Reuters) - Bayer <BAYGn.DE> and BASF <BASFn.DE>, among Europe's largest makers of farm supplies, all but ruled out pursuing genetic plant breeding at home after the EU ruled the technology should be regulated like genetically modified organisms (GMO).
The European Court of Justice (ECJ) said on Wednesday mutagenesis-based gene-editing methods such as CRISPR/Cas9, which can rearrange targeted bits of DNA, fall under rules that now apply to genetic modification via strands of DNA from a different species.
"As we run a global platform, it would mean that basically these applications of these instruments would not be used in Europe and Germany. So overall, that does not impact us as a company too much, but as a European, I'm worried about what that means to the Europeans," Chief Executive Martin Brudermueller told analysts in a call on Friday.
BASF in 2012 moved its plant research operations to the United States from Germany in frustration over regulatory proceedings in Europe but this year it agreed to buy most of Bayer's seed business including some German-based genetic research operations.
Bayer, taking the No.1 spot in the global seeds and pesticides market with the purchase of Monsanto, also ruled out trying to bring gene-edited crops based on mutagenesis to European markets.
A company spokesman referred to a statement that Chief Executive Werner Baumann made after signing the Monsanto deal, vowing the combined group would not develop genetically modified crops for commercial use in Europe.
Following the ECJ verdict, the company has widened the definition of "genetically modified" accordingly to include gene editing, the spokesman said.
Few, if any, commercial ventures based on gene editing have been launched so far in Europe, and only large players were seen as likely to pioneer product development, industry analysts say.
The ECJ ruling will translate into near-prohibitive overhead costs of market access, meaning that smaller players can be ruled out from taking the challenge, they added.
Legal uncertainty before the ruling previously limited work on gene-edited plants to early-stage research and discouraged the launch of commercial applications in Europe.
The verdict on Wednesday was widely condemned by biotech and chemical industry associations as well as academic scientists, but drew praise from environmental and consumer rights groups.
Germany's KWS Saat <KWSG.DE>, the world's largest supplier of sugar beet seeds, said it would study the ruling before making any changes to its strategy.
"We now have to consider which market needs which product," a spokesman said. The group has research centres in Germany and the United States.
A spokeswoman for Swiss-based seeds and pesticides maker Syngenta, owned by ChemChina, referred to a statement from the European Seed Association saying much of the potential of these innovative methods would likely be lost for Europe.
She had no further comment.
Proponents of gene editing argue the method can be seen as equivalent to conventional breeding but many times faster.
(Reporting by Ludwig Burger; editing by David Evans)