ANIMAL health and genetics company Zoetis’s proposed purchase of Neogen Genomics’ global animal genomic testing business could substantially lessen marketplace competition in the field and requires an in-depth Phase 2 assessment, the Australian Competition and Consumer Commission has determined.

Zoetis and Neogen Genomics both supply genomic testing services for beef cattle, dairy cattle and sheep in Australia.

“We consider the acquisition could substantially lessen competition in the supply of genomic testing services for cattle in Australia,” ACCC commissioner Dr Philip Williams said in a statement.

“The acquisition would combine the two largest suppliers of genomic testing services for cattle in Australia. The information before the ACCC indicates that there are limited competitive alternatives, none of which would operate at a similar scale to the merged entity, and that barriers to entry and expansion are significant,” Dr Williams said.

The ACCC is also considering the competitive significance of Zoetis obtaining access to an increased volume and breadth of genetic data on cattle and sheep in Australia through the acquisition.

ACCC would conduct further in-depth inquiries and seek more information about the likely competitive effects of the proposed merger as part of a Phase 2 assessment, Dr Williams said.

Submissions for the Phase 2 study have now closed.

Zoetis notified the proposed acquisition to the ACCC back on 12 May.  Zoetis is a US-listed global animal health company, whose businesses include genomic testing for beef and dairy cattle and sheep in Australia. Zoetis conducts all of its genomic testing for Australian customers in its laboratory based in Michigan, US.

Neogen is a US-listed global biotechnology company. The Neogen Genomics division supplies genomic testing services for beef and dairy cattle and sheep in Australia. It has laboratories globally, including in Brisbane. Neogen acquired its Brisbane laboratory from the University of Queensland Genetics Laboratory in 2017.

Cattle genomic testing involves the analysis of an animal’s DNA samples to identify genetic traits that can inform farmers’ breeding and sales decisions. Testing generally focuses on economically important traits, such as milk production, meat quality, feed efficiency, disease resistance, fertility, growth rates, genetic defects and overall health.

Genomic testing helps farmers to quickly and accurately identify higher-value animals and improve herd genetics through selective breeding.

Under the Competition and Consumer Act, a Phase 2 assessment can take up to 90 business days, unless extended under specific circumstances.

Source: ACCC