Analysis: For Merck, bringing cattle feed Zilmax back won't be easy

Thu Oct 31, 2013 3:08pm EDT
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By P.J. Huffstutter and Lisa Baertlein

(Reuters) - U.S. pharmaceutical giant Merck & Co (MRK.N: Quote) faces significant challenges bringing its controversial feed additive Zilmax back to market in the United States and Canada, even after a vote of confidence from South Korea on Thursday.

South Korea plans to begin accepting meat from cattle raised with the muscle-growing supplement early next year, a senior official in the country's food ministry said, opening the door to beef imports after a government risk assessment found the additive could be permitted at certain levels.

To resurrect the once popular drug in the United States, Merck will need to shake this summer's controversy over animal welfare problems - and convince ranchers, feedlot customers and meatpackers that Zilmax was not to blame for some cattle that arrived at slaughter plants having difficulty walking and apparently in pain.

It could be a tough sell: On Wednesday, agricultural giant Cargill Inc CARG.UL told Reuters it would not allow Zilmax-fed beef to enter its supply chain until questions over cattle health issues have been resolved and "until Asia and other trading partners accept it in their markets.

The move by Cargill underscores how the U.S. livestock industry is being pulled in opposing directions: It needs to produce more meat for a growing global population, and it needs to assure corporate customers and an often skeptical public that the use of livestock drugs in meat production is safe.

Merck declined to comment on Cargill's action.

In August, the New Jersey-based pharmaceutical company voluntarily suspended sales of Zilmax in the United States and Canada after Tyson Foods Inc (TSN.N: Quote) said it would stop accepting Zilmax-fed beef as it had observed some cattle arriving for slaughter in physical distress.

Merck defended its product, and launched an audit to ensure that the federally approved livestock drug was being properly used in the field and that customers were not misusing it. The company also formed an industry and academic advisory board to study the effects of Zilmax on animals.   Continued...