Since the green revolution, agrochemical patents have been the lifeblood of R&D, by guaranteeing exclusivity of supply to the inventor of a new chemistry for a set time period.
Globally, governments recognise and respect the value of inventions, and set patent timelines to allow appropriate reward to the inventor and its shareholders; ensuring a recycling of funds back into R&D for new innovation (activities which are also richly supported through UK Government tax breaks).
So what happens when these patents expire? We have analysed real farm gate prices of the industry classic, Amistar (250g/l azoxystrobin). First introduced in 1996, Amistar was registered on a broad spectrum of crops and diseases. In 2012 the registration was extended to potatoes with exclusivity until 2018, when 10 competing brands (also 250g/l azoxystrobin) also gained potato registration through an accelerated process thanks to their similarity to Amistar itself.
|Product Name||Marketing Company|
|Affix||UPL Europe Ltd|
|Azofin Plus||Clayton Plant Protection (UK) Limited|
|Axozystar||Life Scientific Limited|
|Chamane||UPL Europe Ltd|
|Cleancrop Celeb||Agrii (Authorisation holder: Syngenta UK Limited)|
|Conclude AZT 250SC||Globachem nv (Authorisation holder: Syngenta UK Limited)|
|Globaztar SC||Globachem nv|
|Sinstar||Sinon EU GmbH|
The new registrations applied rapid price pressure on Amistar, dropping 18% over 2017 to 2019. Post-patent brands have followed the competitive nature of the market, with prices falling back 9% over the same period to an average of £17.34 per litre.
That still leaves a 28% average price difference between the original patent holder, Amistar, and the new entrants.
Or: a remarkable premium of £18/ha for the choice of label (potato rate @3l/ha).
Yet still, Amistar retains a 52% market share of straight 250g/l azoxystrobin.
Wise product choices yield significant gains for the farm business. By tracking patent positions and price moves on over 1’500 UK registered products, YAGRO Price Check gives you total transparency over the Ag Chem market, allowing you to make the best decisions for your business.
Source: analysis of YAGRO Price Check data 2017-19
Revealed: it Pays to Benchmark Your Prices
We are often asked the question: ‘is benchmarking actually going to result in better performance for my business?’ Thanks to some clever number-crunching at YAGRO, we’ve found the statistical answer. Data shows an average £7.50/Ha saving for a wheat crop, straight to the farm’s bottom line, every year.
Ag Chem Price Inflation Report 2018-19
Opportunities in dynamic price movements
Our data team did a detailed analysis of the YAGRO Ag Chem price database showing a 0.5% decrease in real farm paid prices 2018-19. Understanding these moves across 1’500 products is not an easy job. However: the dynamics of the market show how significant cost reduction opportunities might exist, even where average inflation is flat. Accurate product understanding and selection is critical – as is direct control of your purchasing, so you can pick and choose to follow the opportunities.