Farm antibiotics – investors are right to be worried

Emma Rose of the Alliance to Save our Antibiotics argues that the intervention of institutional investors in the antibiotics debate shows that the topic has to be taken seriously

The overuse of antibiotics in human medicine has been under the spotlight for a number of years. With the human antibiotic resistance crisis set to reach critical proportions, many are calling on GPs, pharmacists and dentists to rein in inappropriate prescription practices, with some leading figures even suggesting sanctions for those who over-prescribe.

The need to tackle human prescribing is still widely considered to be the highest priority in the drive to safeguard our antibiotics, but global attention is increasingly turning to the overuse of antibiotics in farming.

The discovery in late 2015 of the mcr-1 gene, which confers resistance to the “last-resort” antibiotic colistin, catapulted veterinary antibiotic use into the headlines worldwide. First found in China, the gene was subsequently discovered in at least 19 countries worldwide.

These findings, strongly linked to farm use of colistin, triggered widespread concern. Subsequently, 50 medics and scientists across Europe and the US called on MEPs to support a ban on routine preventative mass-medication of groups of healthy animals.

Civil society groups launched global campaigns aimed at driving public awareness. And, just a few weeks ago, the investment community became the latest to vocalise its concerns.

More than 50 investors managing $1 trillion in assets have added their voices to this debate, calling on the world’s largest food companies to reduce antibiotics in their supply chains and phase out purely preventative group treatments.

This is arguably the most significant intervention to date. As stewards of risk and return, these companies have a fiduciary imperative to identify the most pressing challenges that face companies within their portfolios, and to demand measures to mitigate for this. That these investors have spoken out signifies that the dangers of antibiotic overuse are not simply prognostications of a future disaster. Nor will these impacts be confined to the health sector. With antibiotic-resistant infections predicted to cost the world circa $100 trillion in lost output by 2050, the material consequences of antibiotic misuse will be soon felt by all corners of society.
Financiers are worried, and so they should be.

Risk profile
Human health aside, the risk profile of profligate farm antibiotic use is significant and systemic; from operational disruptions and loss of livestock as antibiotics lose their efficacy, to reputational damage as consumer choices begin to reflect growing public concern. Crucially, forthcoming EU regulation is set to limit veterinary prescribing, with legislative reviews proposing a ban on routine preventative mass-medication of animals via their feed or water.

Those who oppose such regulatory measures point out that improvements are already happening; that farm antibiotic use is only permissible with veterinary oversight; and that voluntary restrictions on use of “critically important” drugs have already been adopted by industry. But progress will be limited if routine group mass-medication remains common practice; even if underpinned by veterinary consent.

While welcome reductions have been achieved by the UK poultry sector during the past 12 months, total 2014 UK veterinary sales of the critically important antibiotics increased by 3% to a record high.

UK industry alliance RUMA points out that considerations such as welfare, loss of livestock, food safety and product quality must be appreciated by investors, “so that farmers have the confidence, means and support to make any necessary changes.”

I would add that considerations such as human health, shareholder value, supply-chain security and consumer trust must be appreciated by the farming industry, so that investors have the confidence to support a thriving food production system which generates long-term financial returns and positive societal impact.

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