The Experts in Animal Health

Brakke Consulting’s
Animal Health News & Notes for May 24, 2002

Copyright © Brakke Consulting, Inc.

Company Earnings Releases

>  Patterson Dental Company reported consolidated sales of $44.5 million for its Webster Veterinary Supply subsidiary for the fourth quarter of fiscal 2002 ended April 27.  Webster’s comparable basis sales increased approximately 12% from last year’s fourth quarter.  For fiscal 2002, Webster’s sales totaled $134.8 million. Webster’s comparable basis sales increased
approximately 9% in fiscal 2002. Webster’s comparable basis, year-over-year sales growth of approximately 12% does not include the impact of sales through distribution of ProHeart-6, which was introduced earlier in the year. Including ProHeart sales resulted in pro forma sales growth of 18% in the fourth quarter. (Business Wire)

>  Mars reported that subsidiary Royal Canin’s sales increased 12% in the first quarter of 2002 to reach 137.7 euros ($124.7 million).  Almost 65% of sales are now “nutritional” products, encompassing the therapeutic and functional foods.  (Animal Pharm)

>  PETCO Animal Supplies, Inc. reported strong sales and pro forma net earnings growth for its first quarter ended May 4, 2002.  Net sales in the first quarter of 2002 were $349.2 million with a
comparable store net sales increase of 9.3%.  Overall, net sales increased 14.7% over the first quarter of fiscal 2001.  First quarter 2002 represented the 37th consecutive quarter of comparable store net sales increases of 5% or greater.  Net loss available to common stockholders for the first quarter was $29.7 million, compared with net loss of $7.2 million in the prior-year period. PETCO completed an initial public offering in the first quarter of fiscal 2002. (Business Wire)

Company News Releases

>  Novartis announced that Econor, an antibiotic for preventing and treating swine dysentery, will be immediately relaunched in the European Union following a decision by the European Commission to lift a suspension of the drug’s market authorization in the union.  The Commission ruling was made on the unanimous recommendation of the Committee of Veterinary Medicinal Products after an extensive investigation.  The relaunch will carry and amendment on the warning label and include new one-day withdrawal times for its 10% and 50% formulations.  Econor was originally approved for use in the EU in 1999, but in 2000 the Commission suspended its marketing authorization amid a number of suspected adverse drug reactions. (Feedstuffs)

>  Hicks, Muse, Tate & Furst Inc., parent company of meat processor Swift & Co, and other investors plan to acquire ConAgra Meats Co., the fresh beef and pork processing business of ConAgra Foods Inc. The deal is said to be worth $1.4 billion and is expected to be completed later this summer. It also includes ConAgra Meats’ Australia Meat Holdings. Australia Holdings is the largest beef processor in Australia and ConAgra Meats is the third largest meat processor in the United States. The buyers will own 54% of the venture, leaving ConAgra Foods with a 46% stake in the business. However, ConAgra Foods agrees to reduce its equity interest in the fresh beef and pork business to $150 million from over $1 billion currently. (Wattnet Meatnews)

>  Lawsuits have been filed against Cargill Inc and ConAgra Foods, alleging that their beef businesses (Excel and ConAgra Beef) are engaged in market manipulation through captive supplies and other special arrangements.  The lawsuits are similar to one already filed against IBP.   Both suits are class actions.  (Feedstuffs)

>  AUSTRALIA   Virbac launched a new heartworm preventative in Australia.  Canimax contains the active ingredients abamectin, praziquantel and oxibendazole and is effective against roundworms, hookworms, whipworms and tapeworms.  Canimax is a palatable tablet that can be used every six weeks, and is available exclusively through veterinarians.  (RuralBusiness)

>  CANADA   AniGenics, Inc. announced a three-year, C$27 million (US$17.5 million) collaborative research program sponsored by Genome Canada, making this the single largest food animal genomics initiative in the history of this new industry.  AniGenics will perform this research with a consortium of partners including the Veterinary Infectious Disease Organization (VIDO), University of Saskatchewan, plus the University of British Columbia, Simon
Fraser University and Inimex Pharmaceuticals, Inc. The program focuses on infectious disease genomics of cattle and poultry, and will begin this summer. AniGenics will establish a Canadian research subsidiary in Saskatoon and anticipates hiring a significant number of scientists and technical staff. (company press release)

CORRECTION:  As a pharmaceutical, Novartis’ Percorten V was approved by the US FDA, rather than the USDA as reported in last week’s newsletter.  Also, the “For Healthy Pets, Visit the Vet” campaign is co-sponsored by Merial and the American Animal Hospital Association.

We continue to expand our executive search business within the animal health, veterinary, pet and specialty chemical markets.  In the past few years, we have filled over 100 positions from division CEO’s to product managers for the leading companies in our industry.  We believe that our services in executive search are of the highest quality.

In 2001, we added field sales recruiting to our search and recruiting services.  We now have two consultants working full time in this area of our business. 

If our your firm has never used Brakke Consulting’s executive search services, we encourage you to either visit out website at or call any of our offices to learn more about how we are uniquely qualified to help you find the best possible candidate for your position.

Brakke Consulting has the experience, insight, abilities, and contacts that provide our clients with the highest quality services in the animal health, pet, veterinary, and specialty chemicals markets.  Please contact any of our offices for a confidential consultation on our range of services.  Contact information for all offices are available on our website at and click on a starred location on the world map.

Animal Health News

>  KOREA   South Korea confirmed two new cases of foot-and-mouth disease in pigs, bringing the total to 12 since the outbreak started.  The latest infections were in the same areas as some of the earlier cases of foot-and-mouth, and the ministry intends to destroy a further 13,000 cows and pigs as a precaution. (AnimalNet – Reuters)

>  US   U.S. poultry imports are beginning to trickle back into Russia more than a month after Russia lifted its ban on American chicken.  At least 20 Russian companies have been granted licenses to import American poultry. A spokesman for the USA Poultry and Egg Export Council, said American poultry is getting into Russia in “dribs and drabs’’ but not anywhere near the pre-ban level. (AP)

>  The possibility that bovine spongiform encephalopathy may be in European chickens was raised earlier in the week when bovine and pig proteins were identified in Dutch imported chicken breast fillets tested by the food safety authority of Ireland.  This situation came to light after the U.K. Food Standards Agency found undeclared pig proteins in chicken fillets being imported into Great Britain from the Netherlands. The UKFSA contacted the Irish agency, which then used more sensitive tests on 30 samples of chicken imported from the same Dutch companies into Ireland. Seventeen of the samples were found to contain foreign DNA: seven had DNA from cattle, seven from DNA from pigs, and three had DNA from both cattle and pigs, according to London’s The Guardian. So far scientists can only conclude that foreign DNA had been added to the chicken meat, but they have been unable to trace where the bovine and pig DNA came from. (Meating Place)

>  US   The Centers for Disease Control and Prevention (CDC) and Aventis announced the launch of Maxforce Tick Management System to reduce the risk of Lyme disease and other tick-borne infections.  The Maxforce Tick Management System, which is a child-resistant box containing fipronil, treats the primary hosts of Lyme disease – the field mouse and chipmunk.  In field trials, the System showed nearly an 80% reduction in the nymphal tick populations after the first year and a 96% reduction over two years. The Maxforce Tick Management System was developed and tested by scientists from the CDC and manufactured in collaboration with Aventis Environmental Science. (PRNewswire)

>  US   Senator Edward Kennedy has introduced a bill to phase out “the routine feeding of medically important antibiotics to healthy farm animals.” The legislation is known as “The Preservation of Antibiotics for Human Treatment Act of 2002.” The Senate bill is similar to one in the House (H.R. 3804) that carries bipartisan support, as well as endorsements from the American Medical Association and other groups.  (Pork Alert)

>  FRANCE   The new French agriculture minister said that the French ban on British beef exports will continue. Speaking in Paris this week, the minister said he could see no reason to change the French position over the import of British beef, which has been banned since 1996 over fears from BSE. France is the only European country to continue the ban and is still defying a European Court decision that the embargo should be lifted. (Wattnet Meatnews)

>  US   A new Senate bill would require microbiological performance standards for federally inspected meat and poultry plants and an animal-identification system that would facilitate the traceback of meat and poultry to the live animal. The bill (S. 2532) amends the Federal Meat Inspection Act and the Poultry Products Inspection Act to improve the safety of meat and poultry products. It would require the USDA to withhold the mark of inspection from products produced at plants that fail to meet microbiological standards as well as reinstating the Salmonella performance standards. (Drovers Alert)

>  ISRAEL   Israeli scientists are working to engineer a new breed of featherless chicken that will allow farmers to process birds faster and cut down on cost according to Israel’s daily Yediot Aharonot.  According to the Yediot Aharonot, the bird is being developed by the genetics faculty at the Rehovot agronomy institute near Tel Aviv. The scientists at the institute believe the new besides saving processors on scalding and picking costs, the breed will grow faster, suffer less from heat, and will be leaner. (Meating Place)

>  US   NCAA has said it will stop using leather basketballs at all of its tournaments. The decision came after PETA loudly protested the use of leather. The new balls will be introduced in the championship tournaments in 2003.  The WNBA already uses synthetic basketballs and the NBA could follow suit. (Pork Alert)

Brakke Consulting Viewpoint

The first part of this week was spent attending the annual American Feed Industry Association (AFIA) meeting in Reno, Nevada with another 250 executives and managers from the feed industry.  While the general mood of the meeting was upbeat, one has to be concerned with the challenges of the changing marketplace.  The theme of the conference was “Succeeding in a Competitive World.”  Many speakers addressed the current competitive environment.  But quite often I heard them addressing basic changes in the customer base and government’s direct and indirect involvement in the production of food.

We believe that the incoming chairman Richard Frasch has it right when he states “more and more, we need to look beyond the producer and focus on the consumer of the meat, milk and eggs.” 

The nutritional food animal business faces threats from many sources that will require planned, thoughtful responses and, in some cases, changes.  The industry must be proactive and ensure that the consumer has the full story on animal protein production.  Also, everyone employed by or servicing the industry needs to be the voice of reason against activist groups such as PETA.  While a few synthetic basketballs do not sound like a very important issue, it is an example of how those organizations not interested in animal protein production keep chipping away at our industry.  Let yourself and your company be heard on these issues.

We wish our US readers a safe and enjoyable Memorial Day Weekend.

[Ron Brakke]

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