Bloomberg News

Thoroughbred Sex Rules Seen to Illegally Restrict Competition

December 15, 2011

Dec. 15 (Bloomberg) -- International rules adopted in Australia requiring thoroughbreds to physically mate to produce offspring eligible for racing are seen to illegally curb competition and a lawyer said they should be struck.

The industry’s “self-regulation has become anti- competitive and exclusionary,” Ian Tonking, a lawyer for Bruce McHugh, the former Sydney Turf Club chairman who sued to allow artificial insemination for race horses, told a judge today. “This court cannot conclude the rules do not substantially lessen competition or amount to a constraint on trade.”

McHugh’s lawsuit challenges a multibillion-dollar industry for breeding that sees owners of the world’s most-prized horses, including Dubai’s ruler Sheik Mohammed bin Rashid al-Maktoum, send so-called shuttle stallions around the globe to breed with mares. Tonking was commenting during the first of three scheduled days of closing arguments before Sydney Federal Court Justice Alan Robertson, who will rule on the case.

Allowing artificial insemination would threaten traditions behind the sport’s appeal to kings, queens, sheikhs and billionaires, Tony Bannon, lawyer for the Sydney Turf Club, had said during the eight-week trial that concluded Oct. 28.

Fees for a mating episode have reached as much as $330,000, according to breednet.com, a website on the breeding industry in Australia, the world’s second-biggest thoroughbred racing jurisdiction behind the U.S.

The vast majority of breeders in Australia are small operators, who have an average of three mares and whose voice is being ignored, Tonking said during the trial. They would benefit from not having to ship their mares to stud farms and gaining access to the sperm of top-rated horses worldwide, he said.

‘No Public Benefit’

“There is no public benefit that might outweigh the anti- competitive conduct” of the industry, Tonking said today.

New Zealand breeder Janice McDonald said her business came to a standstill when her Australian race horse Heroicity died at stud in the U.S. in 2005.

“Being able to use his frozen semen would allow me to continue what I set out to achieve and surely everyone is entitled to have their dreams, not just wealthy folk,” McDonald wrote in an e-mail. “I do not feel Heroicity was given a true opportunity to show what he was capable of producing.”

A court victory for McHugh could make Australia a trend- setter, tempting stud book operators around the world to follow its lead in allowing the registration of offspring from artificially inseminated mares and saving money in the process, breeders have said.

Stud Book Registration

To be eligible to race, thoroughbreds must be registered in a recognized stud book. The Australian Stud Book dates back to 1878, when the first one was compiled by William C. Yuille, sporting editor of the Melbourne Weekly Times newspaper, according to the organization’s website. The book preserves an official record and ensures the integrity of the thoroughbred breeding industry, the organization said.

Racing associations in other countries also keep stud books. More than 70 stud book authorities are members of the International Stud Book Committee.

The prohibition of any form of artificial insemination for thoroughbreds has been in place in Australia since at least 1949, to prevent fraud and reduce errors in the registration of thoroughbreds, Tonking said. Since horses are now electronically tagged and identified by their DNA, that argument no longer has any justification, he said.

The International Stud Book Committee has always recognized that a challenge to the ban on artificial insemination may occur, it said. Lifting the ban wouldn’t be in the interest of the industry, the group said on its website.

The case is Between Bruce McHugh and the Australian Jockey Club Ltd. NSD1187/2009. Federal Court of Australia (Sydney).

--Editors: Lena Lee, Garry Smith

To contact the reporter on this story: Joe Schneider in Sydney at jschneider5@bloomberg.net

To contact the editor responsible for this story: Douglas Wong at dwong19@bloomberg.net


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