Why does antimicrobial resistance matter to food companies?

Antimicrobial resistance is accelerating at a rate that could threaten modern medicine. Why is it a material issue for food companies?
November 2020

Catherine McCabe

Analyst, Responsible Investment

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The value of investments and any income derived from them can go down as well as up and investors may not get back the original amount invested.

Views and opinions have been arrived at by BMO Global Asset Management and should not be considered to be a recommendation or solicitation to buy or sell any companies that may be mentioned.

The information, opinions, estimates or forecasts contained in this document were obtained from sources reasonably believed to be reliable and are subject to change at any time.

Animal protein production accounts for roughly 73% of global antibiotic use.1 Due to growing demand for meat, dairy and fish in in low- and middle-income countries, coupled with a boom in large-scale intensive farming operations, antibiotic use in animal agriculture is projected to rise by 67% by 2030, and nearly double in in Brazil, Russia, India, China, and South Africa.2

Antimicrobial resistance (AMR) is a natural phenomenon in which microorganisms develop resistance to antimicrobial agents. However, this is being accelerated by poor stewardship of antibiotics in healthcare and farming. It has been estimated that – if AMR continues unchecked – there will be an 11% loss in livestock production by 2050.3

AMR bacteria or AMR-encoding genes can transfer from animals to humans through the environment, food chain, or by direct contact. A growing number of common bacterial infections in humans – including urinary tract infections and pneumonia – are becoming more difficult to treat.

If antibiotics continue to lose their effectiveness, caesarean sections, chemotherapy and other commonplace medical interventions could become extremely high risk. This would severely undermine modern medicine. Around 700,000 deaths per year globally are caused by antibiotic-resistant infections – and this could rise if we don’t tackle AMR appropriately.

Using antibiotics to treat disease in animals protects their welfare and prevents unnecessary deaths. However, it is not necessary to use antibiotics to prevent disease in animal groups if no animal is diseased, nor to promote growth in healthy animals.

Many countries have taken action to curb antibiotic use in animal agriculture in recent years. Animal protein producers need to ensure that they comply with the restrictions they are subject to in their countries of operation.

As well as managing the risks associated with antibiotic use, animal protein producers need to consider the opportunities. Consumer demand for “antibiotic-free”* meat is increasing:

 

  • Sales of “antibiotic-free” meat in the US grew by c. 29% each year between 2011-15
  • Compared to c. 5% for “conventional” meat4

 

A recent survey conducted by Consumer Reports in the US found that more than one-third of consumers frequently buy meat, poultry, and other foods with a “no antibiotics” claim.5 Animal protein producers willing to respond to consumers’ concerns about antibiotic use in food animals are therefore arguably better positioned for growth.

Let’s talk about risk

The value of investments and any income derived from them can go down as well as up and investors may not get back the original amount invested.

Views and opinions have been arrived at by BMO Global Asset Management and should not be considered to be a recommendation or solicitation to buy or sell any companies that may be mentioned.

The information, opinions, estimates or forecasts contained in this document were obtained from sources reasonably believed to be reliable and are subject to change at any time.

Our engagement on AMR

From 2109 to date, we have engaged 47 companies on AMR, leveraging the research of FAIRR and the Access to Medicine Foundation – organisations which are evaluating how food companies and pharmaceutical companies are addressing AMR, respectively. Tyson Foods, McDonald’s and Tesco – key players in their respective industries in the food sector – are stepping up to ensure that antibiotics are used more responsibly.

Use our handy terms to look up any technical terms you are unfamiliar with.

Click the link below to discover more about why AMR matters for both food and pharmaceutical companies, as well as details of our engagement.

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