European Animal Health Markets & Opportunities

Worth comfortably in excess of €4 billion, sales of animal health products in the European Union's 27 member countries are responsible for well over a quarter of global market value. As such, the region is a key target for all major companies operating in the sector. This report examines the size, structure and development of the EU market, and profiles the European operations of leading animal health product manufacturers.

The EU has expanded dramatically since the beginning of this decade, welcoming no less than twelve new member states since May 2004. Many of the accession countries are fledgling democracies that, little more than a decade ago, were communistled command economies. Their current contribution to the region's aggregate GDP is limited, at less than 7%, but their accession to the union has increased its population by more than 100 million, and will have a dramatic impact in many areas, including EU agricultural production.

Chapter one of this study looks at the foundations and growth of the European Union, from its roots in the 1950s to the latest round of enlargement, which saw Bulgaria and Romania become full members at the beginning of 2006. It outlines key goals and achievements of the union, describes its main institutions and legislative procedures, and looks at the structure of its economy and population. Finally, it examines the role played by agriculture in the EU, and the way in which recent reform of the Common Agricultural Policy will affect the region's farmers.

Livestock and companion animal populations are the platform on which the animal health products market is based. Accordingly, chapter two of the report looks in detail at food animal and pet numbers in the EU. Livestock products are responsible for over 40% of the region's agricultural output by value, with milk, cattle and pigs the main contributors. The EU contains a cattle herd of approximately 88 million. Pig numbers are around 160 million, while the sheep flock totals 96 million. Regional milk production currently stands at some 146 million tonnes a year, while the EU produces almost 22 million tonnes of pork, 11 million tonnes of poultry meat and over 8 million tonnes of beef and veal a year.

Enlargement has had a significant impact on both livestock populations and production. Cattle numbers rose by almost 20% following the accession of the 12 new member states, for example, while the EU pig herd expanded by more than 37 million. Along with recent reforms of the Common Agricultural Policy, this has had a significant impact on the structure of livestock farming in Europe, and of trade flows in terms of both live animals and animal products. These trends are discussed, along with prospects for producer incomes, herd and flock sizes and output of the leading animal products through the next five years and beyond.

Companion animal products have become an increasingly important source of revenues for the animal health industry in recent years - to the point where they are now responsible for more than half of all sales in one of Europe's biggest markets. Pet numbers and developments in the region's companion animal sector are also discussed in this section of the report.

Almost two-thirds of EU animal health product sales are generated in the region's four biggest markets - France, the United Kingdom, Germany and Spain. Chapter three of the study contains detailed profiles of these markets, examining market size and recent growth, the structure of sales by species and by major product segment, and assessing prospects for market growth over the next five years.

It also contains overviews of a number of 'second-tier' EU markets.

Having analysed key national markets in the EU, the report moves on to an in-depth examination of the market at regional level. The geographical make-up of the market is discussed, along with its structure in terms of major species and product segments. Factors that will affect rates of market growth at regional level during the next five years are also highlighted. Based on an analysis of the main market drivers and constraints, regional market forecasts have been developed for the period to 2011, and are contained in tabulated form at the end of chapter four.

Just as the market is concentrated in geographical terms, so a limited number of manufacturers account for major shares of the EU sales total. The five leading companies operating in the sector generated aggregate sales of more than €2 billion in 2006, accounting together for more than half of total market value, while the ten leading players in the sector were responsible together for approximately three-quarters of all animal health product sales in the EU. Market shares are set to be concentrated further in the next five years as a result of merger and acquisition activity.

The final chapter of the report contains profiles of leading animal health product manufacturers operating in the European Union.

Individual company sales in the region are discussed, along with the relative importance of Europe as a contributor to global animal health revenues generated by each business. European product portfolios are also discussed in detail, highlighting areas of specialization and identifying both established brands and new products that are major contributors to the European sales totals being posted by individual companies.