The Australian Competition and Consumer Commission is concerned about global animal health giant Zoetis's proposed acquisition of Australian rival Jurox.
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TEAT SEALANTS: The ACCC is concerned an animal health company takeover could reduce competition for teat sealant products.

In a statement of issues released on Friday, the ACCC said both companies develop, manufacture and sell animal health products that detect, prevent, or treat health issues in companion and production animals.

“We have concerns that the acquisition will remove one of Zoetis’s closest competitors in the supply of three types of products that are used by farmers to treat or prevent bacterial infections in the teats of cows,” ACCC deputy chair Mick Keogh said.

“We also have concerns that Zoetis will control two of the three sheep parasiticides that are most effective at managing parasiticide resistance.”

Mr Keogh said in each of these markets, which were already highly concentrated, market feedback indicated that Zoetis and Jurox were two of the key players, and there were few alternative suppliers.

“Barriers to new entry appear to be high in these markets as suppliers need to invest significant time and capital to develop products and meet manufacturing, licensing, and registration requirements,” he said.

“The manufacturing process also involves expensive technology and equipment and a high degree of technical expertise.”

Zoetis is a public company listed on the New York Stock Exchange and operates in global development, manufacturing and marketing of veterinary medicines and vaccines for companion animals and production animals.

Jurox is a private family-owned veterinary pharmaceutical company based in Australia.

It researches, develops, manufactures and sells a range of over-the-counter products and veterinary medicines.

Jurox’s products are marketed in more than 20 countries globally and most are manufactured at Jurox’s plant in Rutherford, NSW.

At this stage, the four production animal markets where the ACCC considers the proposed acquisition is likely to substantially lessen competition are:

-Intramammary antibiotics for lactating cows.
-Intramammary antibiotics for dry cows.
-Teat sealants for cows.
-Endoparasiticides and endectocides for sheep (sheep parasiticides).

Competition for companion animal products

he ACCC is also considering whether the proposed acquisition may substantially lessen competition in five highly concentrated markets for the supply of various companion animal products to veterinarians, including opioid and non-opioid sedatives, antidotes for sedatives, corticosteroids and penicillin.

“We have received some market feedback that Zoetis and Jurox compete closely in each of these markets and that post-acquisition, the number of effective competitors in each market may be reduced to only two or three,” Mr Keogh said.

The ACCC’s investigation is also considering whether the proposed acquisition could provide Zoetis with the ability and incentive to engage in anti-competitive bundling, particularly given the importance of Jurox’s Alfaxan product, an injectable steroid anaesthetic for use in treating dogs and cats.

“Market feedback indicates that Alfaxan is a unique product with no comparable alternatives,” Mr Keogh said.

“We are investigating whether Zoetis could successfully prevent its rivals in companion animal products from competing effectively, by bundling the supply of Alfaxan with those companion animal products.”

At this stage, the five companion animal markets where the ACCC considers the proposed acquisition may substantially lessen competition are:

-Pre-anaesthetics and sedatives (opioids) for companion animals.
-Pre-anaesthetics, sedatives, and short-term anaesthetics (non-opioids) for companion animals.
-Antidotes for short term pre-anaesthetic sedatives for companion animals.
-Long-acting injectable corticosteroids for companion animals.
-Injectable penicillin for companion animals.

ACCC seeks submissions

The ACCC invites submissions from interested parties in response to the statement of issues by March 11. The ACCC’s final decision is scheduled for April 28.

More information, including the statement of issues, is available at Zoetis Australia Research and Manufacturing Pty Ltd – Betrola Pty Ltd (including Jurox Pty Ltd).

Packets of snacks and a small heap of onions await customers in front of a road-facing house in Mettukadai village, located six km south of Uthukuli — a town in Tamil Nadu famed for its butter.

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