The ACCC will not oppose the proposed acquisition of Jurox by Zoetis after accepting a court-enforceable undertaking from Zoetis to divest Jurox’s intramammary product range, consisting of intramammary antibiotics for dry and lactating cows and teat sealants for cows.
Zoetis and Jurox develop, manufacture and sell animal health products. They are two of the leading suppliers in Australia of teat sealants and intramammary antibiotics for lactating and dry cows, which are products used to treat or prevent bacterial infections in the teats of dairy cows.
“Zoetis is a leader in the supply of intramammary products and Jurox is a well-known competitor with a full range of established products,” ACCC Commissioner Liza Carver said.
“Without the divestment, the proposed acquisition would combine the two largest suppliers of intramammary antibiotics for lactating cows, two of the four largest suppliers of intramammary antibiotics for dry cows and two of the three largest suppliers of teat sealants, likely resulting in higher prices for these products.”
The ACCC’s investigation found that there are few alternative suppliers in these markets and barriers to entry or expansion are high. This is due predominantly to lengthy regulatory approval processes, high manufacturing costs and the relatively small size of the Australian market making it difficult to achieve economies of scale.
To address the ACCC’s concerns, Zoetis offered an undertaking to the ACCC to sell Jurox’s intramammary product range, being Ampiclox LC and DC, Juraclox LA, Maxalac LC and DC and U-Seal.
“The ACCC is satisfied that the divestiture undertaking addresses the competition issues raised, and ensures Jurox’s intramammary product range will continue to compete with Zoetis’ products,” Ms Carver said.
Zoetis proposed veterinary pharmaceutical company AVet as the up-front purchaser of the intramammary product range after an agreement was reached between AVet and Zoetis. The ACCC has approved AVet as the purchaser.
Further information, including the undertaking accepted by the ACCC, can be found on the ACCC’s public register:
Note
The ACCC will issue a public competition assessment shortly explaining its decision in greater detail.
Background
Zoetis is a public company listed on the New York Stock Exchange. Zoetis operates in global development, manufacturing and marketing of veterinary medicines and vaccines for companion animals and livestock.
Jurox is a private family-owned veterinary pharmaceutical company based in Australia. Jurox researches, develops, manufactures, and sells a range of over-the-counter products and veterinary medicines. Jurox’s products are marketed in over 20 countries and most are manufactured at Jurox’s plant in Rutherford, New South Wales.
AVet is an Australian veterinary pharmaceutical company founded in 2019. AVet’s product range is currently limited to companion animal products.
In addition to the intramammary antibiotic product markets, the ACCC also closely considered the impact of the proposed acquisition on Zoetis’ ability and incentive to bundle Jurox’s Alfaxan product, and on competition in the markets for the supply of various other animal health products, including:
- Endoparasiticides and endectocides for sheep (sheep parasiticides)
- 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, and
- Injectable penicillin for companion animals.
However, after extensive market inquiries, the ACCC found that the proposed acquisition was only likely to raise competition concerns in relation to intramammary antibiotics for dry and lactating cows, and teat sealants.
The New Zealand Commerce Commission also cleared the transaction on 31 August 2022.
