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Third Economic Impact Study On UK Breeding Industry Published

The third Economic Impact Study of the British Thoroughbred breeding industry was published on Wednesday. In the report, key opportunities and challenges for the sector were outlined and provide a blueprint for future progress.

Building on reports published in 2014 and 2018, the study was commissioned by the Thoroughbred Breeders' Association (TBA) and conducted by PwC. Both the Racing Foundation and Horseracing Betting Levy Board (HBLB) funded the project.

British breeding was found to have an impact of over £375m of gross value added to the rural economy, as well as being a world-leading producer of top racehorses and the foundation for a world-class racing programme. There was also greater insight gained into the current climate in which Thoroughbred breeders operate through deeper analysis of factors affecting profitability and the overall health of the sector.

Over 7.5 million data points were analysed in the project following the impact of both Brexit and COVID-19. One of the highlights of the report was how the Great British Bonus scheme has narrowed the gap in average sales prices between colts and fillies at British sales. There are ongoing profitability issues, particularly in the middle and lower tiers of the market, where smaller operators continue to exit the industry. Forecasts on foal crops and broodmare numbers in the report also show a steady but continual reduction without intervention.

The report also outlined some recommendations for the industry to pursue, including the consideration of prize-money levels, new targeted industry incentives, creation of accessible ownership models, encouragement and support of the domestic stallion market, and the development of recruitment and retention strategies to meet the industry's talent requirements.

TBA Chairman Julian Richmond-Watson said, “It is timely as it coincides with the racing industry's development of a new long-term strategy, led by the BHA, which is an opportunity to shape racing's future and strengthen our position as a world-leader in thoroughbred racing and breeding.

“The report will be a key evidence bank for this vital work, as industry stakeholders seek to work together to address the challenges for the long-term health of the sport. A high quality and sustainable supply of thoroughbred horses is a specific objective underpinning the whole strategy, and is a requisite for an attractive, competitive and quality racing product.”

TBA Chief Executive Claire Sheppard added, “It is of fundamental importance that as the TBA, and as an industry, we take action based on a sound and robust evidence base and have a real depth of understanding of underlying trends across the whole industry.

“As this is the third study the TBA has commissioned, a comprehensive and longer-term picture of the key trends now exists, and the data have helped PwC to model into the future and map out what could happen if these trends continue and we do not take interventions.

“The long-term declining trend in the key indicators are an ongoing concern, but there are signs of hope for the future in the upturn in the 2022 British-born foal crop numbers and the positive impact of the Great British Bonus on sales prices and owner returns.

“The report demonstrates that incentives and strategic interventions can work. We must learn from this and take forward a plan with the support of breeders in particular and the racing industry in general as part of racing's new strategy.”

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UK Thoroughbred Industry Economic Impact Study Begins

A third UK Thoroughbred industry economic impact study began on Friday, following confirmation of funding support from the Horserace Betting Levy Board (HBLB). The third study of its kind was commissioned by the Thoroughbred Breeders' Association (TBA), with additional financial support from the Racing Foundation, and will provide an up-to-date audit of the British market, analysing the impact of wider economic and political factors to identify emerging challenges and opportunities. PwC has been appointed to conduct the study. The wider racing ecosystem will also be explored in the study, including the source and size of its horse population, international trade and subsequent impact on the future racing programme.

Claire Sheppard, TBA Chief Executive, said, “We are incredibly grateful to the Levy Board and the Racing Foundation for their support of this vitally important piece of work. The previous studies enabled us to firstly assess the environment in which thoroughbred breeders were operating in, but also provide evidence to build our long-term strategies. Both the emerging and more established trends in these reports demonstrated areas of the sector at risk, which were subsequently addressed by the introduction of initiatives to influence market behaviour and assist the industry.

“This third study will give us an up-to-date overview of the market and allow us to monitor the influence of industry incentives such as the Great British Bonus Scheme. It will also examine the supply of thoroughbreds to British racing and the effects of global trade and competition on the sport. Crucially, the results of this project will show us if our areas of focus remain key priorities for the future or if there is evidence that we should re-align parts of our strategy to new, emerging threats and opportunities.”

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New Arrangements For Equine Infectious Disease Surveillance In England

The Horserace Betting Levy Board (HBLB) has announced the implementation of key steps towards re-establishing on a long-term basis the essential equine infectious disease surveillance provision that had been performed by the Animal Health Trust (AHT) until its closure in July 2020.

Acting on the recommendations of an industry-wide committee set up to assess options for the future, HBLB has concluded an agreement from August 2021 with Rossdales Ltd to provide the diagnostic microbiology testing capacity, arrangements that will work in conjunction with the epidemiological surveillance and monitoring unit that will now be based at the University of Cambridge Veterinary School.

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Since the closure of the AHT, the surveillance services have been provided by the former AHT team headed by Dr. Richard Newton on a temporary basis under contract to the British Horseracing Authority (BHA). This team will be employed by Cambridge University under the new agreement and will continue to respond to disease outbreak incidents and to produce daily updates on infectious disease reports worldwide for the benefit of the health of all horses, Thoroughbred and non-Thoroughbred.

Over the past year, diagnostics have been available to Dr. Newton's team on an ad hoc basis from Rossdales Ltd, and funded by HBLB. Full coverage has therefore been maintained, meaning that the team was able to respond promptly and effectively to any incidents of disease.

The new arrangements will span an interim period of at least two years while options for the longer term are considered and developed.

Funding will be provided, as previously, by HBLB, racehorse owners and the Thoroughbred Breeders' Association (TBA). Discussions are also being held with the sport and leisure horse interests regarding potential contributions in the future.

In addition, HBLB has formed a representative oversight committee, with HBLB Government Appointed Member Anne Lambert as its chair. The membership will include representatives from HBLB's Veterinary Advisory Committee, the TBA, the Racehorse Owners Association, the BHA and the non-Thoroughbred sport and leisure sectors. This committee will have responsibility for monitoring the service in its initial phase and for designing plans for future, with the paramount objective of safeguarding the national herd. Full engagement between the Thoroughbred and non-Thoroughbred sectors in respect of infectious disease management will underpin the work which includes the development of an epidemic risk management plan.

Alan Delmonte, Chief Executive of HBLB, said: “This is an important milestone in putting in place successor arrangements to the services that had been carried out by the Animal Health Trust for a long time. A full evaluation of the current situation and the equine sector's requirements took place including through a tender process that was announced by BHA in 2020. Substantial work has been done by Stephen Atkin, who was retained to act as project manager of this complex area that has taken many months to consider. As well as now engaging the widely recognized expertise of Rossdales, it will be welcomed that it has been possible to retain the previous AHT team headed by Dr. Richard Newton. All in the equine sector are grateful to them for continuing to provide disease monitoring coverage and reaction to outbreaks given the challenging circumstances of the past year.”

Dr. Alastair Foote, director of Rossdales Laboratories, added: “We are delighted to have been awarded the tender, and to be able to provide continuity of the former AHT services that were critical to the equine industry, maintaining essential diagnostic testing and surveillance work. Our recent major investment in new laboratory facilities at our Newmarket site has meant we have been able to rapidly accommodate the required testing requirements, with new tissue culture and virus isolation facilities, and we look forward to working alongside the surveillance and research team at Cambridge.”

HBLB Boosts Prize Money Contribution For 2022

There will be an increase in prize money contributed by the Horseracing Betting Levy Board (HBLB) in 2022. Fixture-related funding will increase to £90 million for UK racing's 2022 fixture list, with £70 million specifically allotted for prize money, £10 million more than was set aside for that purpose in both 2018 and 2019. These sums do not include the additional grants for prize money and towards regulation and integrity already announced following the HBLB taking a £21.5 million loan from the UK Government's Sport Winter Survival Package. The HBLB is likely to contribute up to £75 million in prize money in 2022 versus around £60 million in pre-Covid years. In addition, the HBLB Board recognises that the investment by the HBLB is likely to decrease in 2023. In 2021, including the additional grants arising from the Sport Winter Survival Package loan, HBLB expects to contribute around £81m to prize money.

A total of £55.8 million of the £67.2 million prize money allocation is via a newly developed ratecard mechanism, £6.9 million for the Appearance Money Scheme, £3.5 million for the Great British Bonus, a Divided Races Fund of £800,000 and an additional fund of £200,000 to support prize money at racecourses most affected by the new ratecard mechanism. For more information, please visit the HBLB website here.

Paul Darling, Chairman of HBLB, said, “The Board recognised the importance of maintaining its higher than usual allocations to prize money in 2022 to support the ongoing recovery of the sport from the effects of the Covid period. This adds to the substantial extra grants that we have made in 2020 and 2021. In addition, by the end of 2021 the Board's contribution to Covid-related regulatory costs is likely to have reached £3.7m.

“We are pleased to have modernised and developed our funding arrangements with regard to both prize money and the fixture incentive fund. Moving to a race-by-race basis for allocating all prize money gives the Board, and indeed all of racing and betting, more transparency as to where Levy funding is being allocated. The additional payments that incentivise racecourse executive contribution are intended to encourage a return of total prize money in 2022 towards pre-Covid levels.

“It must be recognised throughout the sport that although drawing again on our reserves makes it possible to continue with higher funding in 2022, the position in 2023 will be different. The Board is required to make the first repayment to Government of the Sport Winter Survival Package loan that was taken this year. That will be the first call on expenditure in 2023 and in the seven subsequent years.”

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