Like any athlete, producing a successful racehorse takes a lot of work. The amount of effort and resources that go into breeding a potential winner, raising them, training them and getting them to the starting line is massive, but there’s no better place to do it than Australia.
Horse racing is a major economic driver for the country, contributing over $1 billion to Australia’s Gross Domestic Product in 2017-18 and supporting over 91,000 direct employees in Victoria alone, and countless more indirectly.
Governments are all too aware of this, pouring copious amounts of money into the industry to boost the state’s money stores for use on other projects. The Victorian state government generated $469.4 million in taxes from the racing industry in 2018. The Federal government pulled $81 million, bringing the total Government benefit to $551 million.
The Victorian thoroughbred industry generated over $2 billion in direct spending for the same period, with over $1.3 billion spent on race wagering.
These figures are music to the ears of the nearly 70,000 horse owners and syndicate members because they confirm that racing is as popular as ever, and is very much here to stay.
A recent announcement from Racing Victoria will see prize money up for grabs hit a high of $314 million for the upcoming racing season, an increase of 80% on the 2015 prize money pool. The prize money boom is designed to facilitate continued investment in the racing industry.
The move is a sign of the strength of the industry in Australia which has seen continued engagement despite a difficult COVID lockdown period. The industry has attracted owners and trainers from the US, UK and New Zealand to set up shop here by dangling the carrot of huge prize money, and serious grandstanding rights.
The boost to prize money will undoubtedly see an uptick in breeding and other racing activities, putting demand on already in-demand services in the industry, a trend already being reflected in soaring yearling sale prices which have increased 28%.
Apiam Animal Health (ASX: AHX) provides equine veterinary services to a number of racing clients and has been predicting this demand lift for a while now, having set themselves up strategic acquisitions of equine practices, the latest being the Victorian Equine Group– one of the State’s largest, well regarded equine hospitals.
Victorian Equine Group now joins other large equine practices Scenic Rim and Agnes Banks under the Apiam banner, putting the Company in an ideal position to capitalise on surging need for racing related veterinary services.
“Alongside the companion animal market which has seen companion animal ownership increase more than 15% through the pandemic, the equine industry has been the fastest growing segment for Apiam,” said Apiam Managing Director, Dr Chris Richards.
“Major prize money increases like these announced by Racing Victoria and Racing NSW drive increased investment from breeders and owners, driving Apiam’s organic growth.
“Replicating Apiam’s successful equine hub and spoke model in Queensland, we anticipate similar organic growth at our new Victorian equine hub following last month’s acquisition of Victorian Equine Group as part of our strategy to double Apiam’s revenue to $300m by FY24.”
Rising standards of animal care and an increased focus on horse health- both mental and physical, have seen vets become the ultimate stewards of animal welfare. Racing vets have a deep understanding of the importance of their role as a respected voice with responsibilities to their patients, their clients, the public and the profession as a whole.
The use of veterinary services and diagnostic technologies for preventative care is expected to increase in line with the public’s expectations. More money in the industry means more money going towards equine welfare initiatives including preventative veterinary care. This subsequently opens opportunities for veterinary service providers like Apiam to play a key role in improving equine welfare, and shaping the industry for the better.
Samantha Freidin is a business journalist at Emerald Financial whilst also completing a Masters of Marketing and Digital Communications at Monash University.
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