Presentation to the Darley Flying Start Conference at Keadeen Hotel, Newbridge, Ireland
October 25th 2006
Andrew Birch
Irish Thoroughbred Exports: A Comparison with New Zealand
Good Afternoon Ladies and Gentlemen. Thank you for taking the time to listen to us today. My name is Andrew Birch and I am from New Zealand, where I previously worked for New Zealand Bloodstock, the major Thoroughbred Auction House in the country. Today I’m going to talk about Irish Thoroughbred Exports: A Comparison with New Zealand.
Introduction
As you will all be aware, the export of thoroughbreds plays a significant role in the Irish economy. Similarly, in New Zealand, the thoroughbred industry contributes some $1.483 billion to GDP. Both Ireland and New Zealand are respected thoroughbred breeding nations. The two countries have a similar population size, with close to 4 million people; however, New Zealand is much larger in land mass.
The success of these two breeding nations can be attributed to several factors, with both boasting the perfect natural environment for rearing horses, in addition to access to world class bloodlines, skilled horse men and women, while racing has been ingrained in their respective cultures over a long period of time. There is no doubt that racing within Ireland is stronger than racing in New Zealand, with prize money and the strength of the local investment base being distinguishing factors. In New Zealand, while the prize money would be considered reasonable by global racing standards, the fact that it neighbours the powerful Australian Racing scene sees it dwarfed as a racing nation and as such it is predominantly a sellers market.
Unlike Ireland, where investment levels from the likes of Sheikh Mohammed, Coolmore, Sheikh Hamdan and The Aga Khan, just to name a few, are a driving force behind the racing and breeding success, New Zealand is reliant on exporting many of its best quality thoroughbreds while the local racing circuit sees the lesser bred gallopers competing. As a member of Europe, Ireland has several established and emerging racing nations on its doorstep. On the other hand, New Zealand is relatively isolated and beyond Australia, New Zealand looks largely to Asian markets to service its excess thoroughbred population. The fact that both Irish and New Zealand bred gallopers continue to perform on the world stage is the best advertisement for the respective markets.
Size and Scope - Ireland
If we take a look at the size and scope of the 2 industries, we can see that Ireland is reliant on exporting much of its stock and has a focus on keeping only high quality thoroughbreds in the domestic racing system.
Size and Scope – New Zealand
New Zealand breeds around 4,500 foals each year, which is substantially lower than Ireland, but a sustainable level given the state of the bloodstock market in New Zealand at this point in time. In contrast to Ireland, there is no pressure for a horse to perform in order to stay within the domestic racing system. It is left to the owner’s discretion as to whether they want to continue racing a poorly performing horse.
Foal Population
Ireland currently ranks third in the world in terms of foals produced, with only the United States and Australia ahead of them. It currently breeds more thoroughbreds than Great Britain and France combined. New Zealand ranks as the eighth largest producer of thoroughbreds in the world.
Foals Born in Ireland 2001- 2005
As you will note, Ireland’s foal crop has been steadily increasing over the past 5 years. This mirrors the rise of the Irish economy in general and the strength of the bloodstock market in Ireland. As a result there will likely be a larger proportion of quality Irish horses to fly the flag on the world stage, while the larger foal crop size also presents a challenge, with more horses to find homes for.
Foals Born in New Zealand 2001 – 2005
In New Zealand, the trend has been the opposite. The foal crop has shrunk to 4,500 largely due to the rapid rise in foals produced by Australia, which has traditionally been New Zealand’s major export market.
National Hunt: A Key Point of Difference
One of the major differences between the Irish and New Zealand breeding industries is the emphasis on National Hunt racing. In New Zealand we do not set out to breed National Hunt horses, they are largely horses deemed too slow or too stout for races on the flat. Conversely, in Ireland, approximately 50% of the foal crop is bred for the purpose of National Hunt and there are two distinct seasons for jumps and flat racing. In New Zealand, flat racing takes place all year around and there are only limited opportunities for jumps horses, normally during the winter months.
St Steven:
Winner of Nakayama Grand Jump
Stallions at Stud
As you can see Ireland has nearly double the number of stallions at stud and once again, this can be attributed to the fact you have National Hunt stallions as well as flat stallions. Just quickly – our most prolific stallion in New Zealand is Zabeel who stands at a fee of NZ$100,000. The next level down is Pins and Stravinsky at $35,000. If you looked up the New Zealand stallion premiership, you would note that a horse called Volksraad has been champion stallion for the past 5 years and you’d automatically assume he was a world beater. This just reflects the fact that more of his progeny stay within New Zealand than other stallions, whose stock are more commonly exported overseas.
Irish Thoroughbred Exports
Ireland exported 2,973 thoroughbreds in 2005, and with the foal crop having risen steadily in recent years that export figure is set to rise. So where do all these Irish Thoroughbreds go? Well within Europe, Great Britain is by far the largest market for the Irish Thoroughbred, accounting for almost 68% of total thoroughbred exports. It is worth noting that like France, which rates as the second largest importer of Irish Thoroughbreds, many of the horses bound for Britain are National Hunt.
Other traditional European Markets include:
- Spain (78)
- Italy (96)
- Sweden (43)
- Germany (31
Emerging Markets for Ireland include Greece and Cyprus. At the recent Goffs Sales, Greek buyers snapped up 30 yearlings, largely in the middle market price bracket. Talking with Michael O’Hagan from Irish Thoroughbred Marketing, he sees potential markets within Europe including Russia and other Eastern European countries.
Beyond Europe
The United States accounted for 109 Irish Thoroughbred Imports, many of which are fillies and mares bound for stud. The Irish product extends to the United Arab Emirates, thanks largely to the investment of the Maktoum family. Irish exports to Japan and Hong Kong are not insignificant, with these two Asian markets capable of paying top dollar for quality thoroughbreds. It is less common for Irish thoroughbred sales to Singapore, Malaysia, the Philippines and Korea due to the budget of these nations when sourcing thoroughbreds. In India where only Indian bred horses are allowed to race, there is a market for selling breeding stock.
I have tagged Korea as a potential market for Ireland even though at this stage the Korean Racing Association has imposed a cap of US$20,000 for purchasing racing stock as a means of protecting their own breeding industry. Korea can still outlay unlimited funds for stallions and broodmares and I believe the KRA will alter the cap in years to come. China is potentially a boom market for all thoroughbred exporters and there is no doubt that should gambling on racing be legalised, Ireland like most nations will be looking for their slice of the action in terms of supplying horses.
Methods of Sale: Ireland
Irish Auction Houses, Goffs and Tattersalls Ireland have recently conducted their major yearling sales for flat horses with 1175 and 638 yearlings catalogued respectively. In addition, Irish breeders have available to them the opportunity to sell at Tattersalls in the UK, Doncaster and Deauville. Other options include selling horses privately, with many sold once they have proven their ability on the racetrack. A number of National Hunt horses exported the UK and France are plucked from obscurity in bumper and point to point races. One of the best examples of this is BEST MATE.
New Zealand Exports
Looking at the New Zealand export market, you can see the importance of Australia to New Zealand, accounting for 69% of total exports. Other major markets for New Zealand include Hong Kong, where the New Zealand bred horse wins approximately 35% of all races, while Singapore is a valuable middle market and the number two export destination.
Similarly, Macau sources a number of middle market colts and geldings while Korea is increasingly coming on board, with the US$20,000 cap imposed by the Korean Racing Association for sourcing racing stock actually playing in New Zealand’s favour given the appeal of the relatively low New Zealand dollar (€0.55). Another advantage of Korea is they will buy fillies as well as colts as they look to become a breeding nation. The Philippines accounts for a number of lower end sales, while Malaysia is an up and down market, depending on the state of their racing. In recent years, there has been a trend of selling more fillies off the track to the US, which are capable of winning a minor stakes race on turf before heading to the broodmare paddock.
NZB – Breakdown of Sales
This pie chart illustrates the breakdown of purchases by country at this year’s New Zealand Bloodstock National Yearling Sales. You will note the presence of Ireland on the chart. It is quite common for the likes of Demi O’Byrne, Adrian Nicol, Hubie De Burgh, Dick O’Gorman, Angus Gold to be active at New Zealand’s Sales.
Methods of Sale
New Zealand breeders can sell their product via New Zealand Bloodstock. The National Yearling Sales alone see nearly a third of the annual foal crop change hands. Other options include taking horses to Australia for Sale through Magic Millions and William Inglis, the major Auction Houses in that country. In New Zealand we have regular trails races which are used as methods of qualifying horses to race or getting a horse race fit. The trials results do not appear on a horse’s official records. A number of horses are sold offshore on the strength of an impressive trials victory.
We also have a number of horses sold off the track itself and with few exceptions; almost any horse in New Zealand is on the market given the right price. In addition something which has come into play particularly in Singapore is the lease option. Many Singapore owners are racing horses in partnership with New Zealand owners, leasing a share in the horse and competing for the better prize money available in Singapore without having to outlay the full purchase price for a horse.
Here are some recognisable globe trotting Irish breds:
Yeats – winner Ascot Gold Cup and Coronation Cup
Caradak – winner of the Prix de la Foret
Alexander Goldrun – Winning Hong Kong Cup
Grey Swallow – Irish Derby winner and Gr. 2 winner in US
Our Falstaff – winner of Singapore Derby and 3rd in Dubai Shema Classic
Here are some leading New Zealand exports:
Big Easy – Singapore Guineas, Raffles Cup
Vengeance of Rain – World Racing Series Champion and Hong Kong Cup
Rock N Roll Kid – Macau Cup, Macau Gold Cup, Macau Guineas
El Segundo – dual Group 1 winner and favourite for Cox Plate
Starcraft – Winner of the Queen Elizabeth and Prix Moulin de Longchamp
Promotional Bodies
Like Ireland, New Zealand has to be proactive in marketing its product. As such organisations such as New Zealand Bloodstock, New Zealand Thoroughbred Marketing and the New Zealand Thoroughbred Breeders’ Association are constantly canvassing new and existing markets. Ireland has equivalent organisations through Irish Thoroughbred Marketing, Goffs and Tattersalls, and the Irish Thoroughbred Breeders Association.
Both Countries promote the elements of high class thoroughbreds, exceptional environments for raising thoroughbreds, history of performance and budgets to suit all buyers.
"To see where a horse is going, take a look at where it’s come from"
"Think Thoroughbred, Think Ireland"
The Future
Ireland faces the challenge of finding homes for an ever increasing thoroughbred population at the same time as ensuring that new owners do not find themselves in a situation where their horse struggles to gain a start in a race. Ultimately the bloodstock market will determine what is a sustainable level of thoroughbreds to be breeding and those who get burnt at the sales will likely cut back their breeding commitments in years to come.
Like other breeding nations, Ireland will continue to canvas new markets and while the Irish bred continues to perform, service existing markets. The major challenge for New Zealand will be to rectify problems within its own domestic racing market, thus taking the pressure off the need to export. Japan, Korea and perhaps China appear the markets with greatest room for expansion from a New Zealand perspective.
Once again ladies and gentlemen, thank you for your time.
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