Many consumers have delayed purchasing pets as a result of low consumer sentiment
Melbourne, Australia (PRWEB) March 24, 2013
The Veterinary Pharmaceutical Manufacturing industry has declined over the five years through 2012-13. Industry revenue is expected to decline in 2012-13 due to poor downstream demand from beef cattle farming and other crop growing industries over the year. According to IBISWorld industry analyst Kosta Lev, “the past five years was marred by industry consolidation.” Pfizer acquired Wyeth and its Fort Dodge animal business, drastically shifting the industry's landscape. The performance of the industry is partially linked to Australia's climate, as it affects the level of demand from downstream drivers (such as cattle farming). Periods of little rainfall reduced demand for the industry's products, as evidenced over the five years through 2012-13. Furthermore, the industry is expected to experience a shift in consumer spending behaviour as more emphasis is being placed on natural alternative treatments, even for animals.
The Veterinary Pharmaceutical Manufacturing industry over the past five years has had a high level of industry consolidation, seen through many major players increasing their share in the industry through many mergers and acquisitions. The largest of these changes was Pfizer Australia's acquisition of Wyeth Corporation and its subsidiary Fort Dodge Animal Health, which led its industry-relevant assets to be split between Pfizer and Virbac in Australia, both already major players. “Market share concentration has risen substantially over the past five years, with the top four major players currently commanding a large majority of the market,” says Lev. Merck and Scherling Plough's choice to merge in 2009, along with Scherling Plough's choice to consolidate its animal health operations internally before the merger, are also examples of this phenomenon over the period.
The level of economic activity also has an effect on industry revenue. The global financial crisis, which began in 2007-08, hindered performance in the Veterinary Pharmaceutical Manufacturing industry over most of the past five years. Many consumers delayed purchasing a pet as a result of low consumer sentiment. Over the next five years, more stable economic conditions are expected to increase demand from downstream cattle farming industries. In addition, increasing income levels and a desire for quality pet care will inflate the amount consumers spend on industry products. However, dampening this positive effect will be the expected reduction of veterinarian numbers – a key market segment for industry products.
For more information, visit IBISWorld’s Veterinary Pharmaceutical Manufacturing report in Australia industry page.
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IBISWorld Industry Report Key Topics
This industry is mainly engaged in manufacturing drugs, medicines, medicinal chemicals, vaccines, serums and other pharmaceutical products for veterinary use. Primary activities include veterinary drug manufacturing and veterinary medicinal preparation manufacturing.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
About IBISWorld Inc.
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