6 Entrepreneurship has the potential to reinvigorate, and perhaps even revolutionize, the veterinary industry. However, it is not a panacea to mend all ills; it can also have a darker side, as entrepreneurship manifests itself along a spectrum from informal entrepreneurship to criminal entrepreneurship (Smith, 2009; Gottschalk, 2009). There is a moral dimension to entrepreneurship, and with regard to the veterinary industry the illegal trade in medicines is a contemporary example of criminal entrepreneurship. The illegal trade is a hidden and thus a deniable crime that occurs at the interface of veterinary business and free enterprise. This practice has hit the veterinary press headlines of late and, as such, is both a hot topic and an example of ‘rural criminal entrepreneurship’ (Davis and Potter, 1991). After reading this chapter, students will be able to: • Be aware of incidents of criminal entrepreneurship that may be present in and related to their profession. • Demonstrate the links between legitimate veterinary business and criminal entrepreneurship. • Identify key case examples of the negative trade in the international market, as well as the profession’s response to such cases. • Highlight the dangers to both human and animal health and welfare through the risk of using illegitimate medicines. • Identify the areas of financial loss from the veterinary profession to the illegal trade in medicines. One normally associates the practice of criminal entrepreneurship with serious and organized criminal groups such as the Mafia or other organized criminal cartels (Arlacchi, 1986; Smith, 1978), not rogue farmers, stable hands, stud bosses or, more contentiously, unscrupulous veterinarians, pharmacists and others involved in the veterinary profession. This point, although contentious, is important in this chapter which spans veterinary science, entrepreneurship and criminality. First we must define what we mean by the term veterinarian. In the UK, the term veterinary surgeon is defined by statute (Veterinary Surgeons Act 1966). An individual becomes a veterinarian by the power invested in the President of the Royal College of Veterinary Surgeons (RCVS) through the 1966 Royal Charter. This charter enables the president to add the names of people to a statutory list of veterinarians, and only those on that list are veterinarians.1 This emphasis on legal responsibilities is important in this chapter. This statutory protected title limits veterinarians to be the sole profession able to diagnose and treat animals. Traditionally, veterinarians are held in high esteem, a position which is broadly in line with the notion of the rural idyll (Mingay, 1989) in which veterinarians enact and perform their everyday duties. The veterinary industry in the UK and Ireland has, traditionally, been viewed as a bastion of male domination, with men running the industry’s institutions (Grant and Greaves, 2009, p. 9; Windsor, 2002). This still largely holds true in rural veterinary practice, which remains male dominated despite the changing demographic relating to the dominance of female veterinarians in urban practice (Grant and Greaves, 2009; Henry et al., 2010). Indeed, Henry et al. (2011) question the viability of this traditional model of veterinary practice. Moreover, the veterinarian is socially constructed and viewed by the public as a kindly, stoic man.2 More recently, the veterinarian has been constructed in popular culture and rural folklore as a hero figure, a purveyor of rural expertise (see Grant and Greaves, 2009). It is of relevance that there is a similar heroic construct in relation to farmers; indeed, for Saugeres (2002) there is a discourse in farming which embodies the inherited relationship between the farmer and the land whereby ‘good farmers’ possess an innate understanding of nature. A sympathetic feel for the land is often associated with traditional farming, and this intuitively stretches to the veterinary profession. Saugeres argues that, conversely, the alienated and exploitative attitude of the ‘bad farmer’ towards nature is associated with modern agriculture and agribusiness (and by extension entrepreneurship). Similarly, for Malecki (2006) the ‘lives and livelihoods’ of entrepreneurs in rural contexts are embedded in their socio-economic circumstances. These factors, perhaps, explain why some farmers adopt a cynical and cunning single-minded pursuit of money. Such farmers fit the cultural stereotype of the ‘bad farmer’ (Nerlich et al., 2002). This notion of the ‘rogue farmer’ (Smith, 2004; Smith and McElwee, 2013) is of great importance to veterinary practice because it stands between the unwritten moral contract that exists between the veterinarian and the farmer as a client. Accepting that farmers are not a homogeneous breed (McElwee, 2006), and that some may breach their public trust in upholding animal welfare, or even act criminally, loosens the bond of reciprocal trust. As they go about their daily business veterinarians undoubtedly witness some acts of immoral or illegal practice committed by their clients, and it is often easy to ‘turn a blind eye’. Many are, no doubt, dealt with pragmatically with sound advice and verbal warnings. The veterinary industry within the UK is mainly operated under an entrepreneurial model of private practice, with practices catering for geographical areas and veterinary specialisms. This situates the organization of the majority of veterinary practices within the framework of being a SME (small and medium size business).3 However, Grant and Greaves (2009) also identify other types of veterinary practice in the UK, such as the category of the State Employed Veterinarians. This (re)construction of the veterinarian as an administrator, policy maker and enforcement officer (such as those employed by DEFRA in the UK) is somewhat at odds with the traditional bucolic image of rurality (see Budge et al., 2008) and of the jovial country veterinarian of popular culture. Cooper and Cooper (2008) argue that veterinarians have long played a role in the investigation of illegality that directly or indirectly involves animals, and stress that the role of the veterinarian in such instances is accelerating rapidly. Another matter arising from the state ownership of veterinary knowledge and expertise is that it changes the traditional role of veterinarians in the eyes of their traditional communities of practice, such as farming and the equine industry, because they have a formalized legal obligation to report breaches of regulation, crimes and offences. Thus they become part of the intelligence-gathering apparatus of the state. Kogan and McConnell (2001) stress that the upbringing of veterinary applicants reflects their choice of career locations, i.e. that people who grow up in urban settings tend to practise in urban settings upon qualification, and that the rural veterinary applicant tends to gravitate towards rural practice. Moreover, Grant and Greaves describe an industry that has been undergoing a number of changes, including: • a gender shift in the composition of a profession dominated by men to one in which women make up by far the greater part of the graduate intake; • a trend away from large-animal (i.e. farmed livestock) work to small-animal (i.e. domestic companion animals) work; • a trend towards more multi-centre practices owned by companies with professional financial managers; As a practice, entrepreneurship is associated with traits such as risk-taking behaviour (Brockhaus, 1980). In the case of the veterinary industry one has to differentiate between the label and the behaviour because veterinary medicine is regarded as a profession gained after many years of academic study and practical experience; one cannot become a veterinarian without being accredited. Thus, unlike other areas of business one cannot simply become a veterinary entrepreneur, albeit one does not need to be a veterinarian to start a practice. The owner of a practice does not need to be a vet; for example, the large chain of (currently) 232 veterinary practices, six veterinary laboratories and one crematorium managed by the overarching company CVS is mainly managed by non-veterinarians (CVS, 2012).4 It is thus a partially restricted occupation in terms of entrepreneurial opportunity. This does not mean that individual veterinarians cannot learn to be entrepreneurial and adopt entrepreneurial ideologies and practices. This is a particularly salient point because entrepreneurship is about change, and change often occurs slowly. It is also of relevance that examples of what constitutes entrepreneurship are often industry specific. (For an overview of entrepreneurship in the agricultural sector see studies by Alsos et al., 2011; Iaquinto and Spinelli, 2006; McElwee, 2006; and Sharma et al., 2010.) Existing writings on criminal entrepreneurship (such as Hobbs, 1988) are location and sector specific and have a tendency towards descriptiveness. The most useful definition is that of Baumol (1990, p. 14), who defines criminal entrepreneurship as ‘the imaginative pursuit of position, with limited concern about the means used to achieve the purpose‘. In the criminological literature there is an assumption that rural crime is committed by marauding urban criminals, and that the indigenous population are always the victims (Dingwall and Moody, 1999; Smith, 2010). This chapter challenges this assumption, demonstrating that examples of criminal entrepreneurship can come from within the industry. The trade consists of several subsets of practice, as follows: • the ‘parallel trade in the pharmaceutical industry’ whereby legally manufactured drugs are sold at a price difference between countries resulting in labelling, etc., not matching the standards of the country into which they are imported (Barfield and Groombridge, 1999; Kanavos and Costa-Font, 2005); • legally manufactured drugs which have reached their recommended expiry date (Daughton and Ternes, 1999) and are offloaded elsewhere; • the fraudulent sale of one type of banned drug as another; • legally manufactured drugs which have been stolen; • the counterfeit trade whereby the drugs are manufactured illegally by chemists for an organized criminal conspiracy (Liang, 2005; Stearn, 2004). Although this chapter is primarily concerned with the illegal UK trade in unauthorized veterinary medicines, it is obviously a global problem involving both unauthorized and counterfeit veterinary products.5 This gives an indication of the potential illegal revenues to be had by unscrupulous operators. It is a subject which the pharmaceutical industry takes very seriously. (For further information on the counterfeit trade see the Bayer website entry on the subject. For a wider discussion of the counterfeit trade in veterinary medicines see work by Stearn, 2004, and Terzi The primary methodology in the study presented in this chapter is that of documentary research (see Mogalakwe, 2006; Platt, 1981; Scott, 1990, 2006). This methodology is essential to this inquiry because much of what we know about the illegal trade in veterinary medicines comes to us from the media and, in particular, newspapers. Mogalakwe (2006) lists one of the strengths of documentary research as being that it allows one to access ‘difficult to reach’ research topics. Given that in using documentary research one is reliant upon what is reported by journalists, it is vital that we as academics take care to ‘read between the lines’ (Fitzgerald, 2007) to reach a more nuanced understanding of the issues involved. Furthermore, newspaper and media articles are useful in developing objective case studies (Yin, 2003), as reported below. For this chapter, this particular approach led to the development of the micro case stories illustrating examples from two geographical contexts: namely Britain and Ireland. Such examples are necessary as they serve to document the trade in illegal veterinary medicines. There is a well-documented Irish connection to the trade, with Eire being suspected of being a source of such illegal medicines.6 In 2004, Medicines Enforcement Officers from the Department of Health, Social Services and Public Safety (DHSSPS) interdicted a major operation to manufacture illegal veterinary drugs. After a prolonged multi-agency investigation they seized a large quantity of unauthorized and counterfeit veterinary medicines from locations across Northern Ireland and the Republic.7 In 2005, a large quantity of illegal veterinary medicines were found abandoned at a rural location on waste ground. In 2007, a veterinary practitioner was convicted and given a conditional discharge at Londonderry Magistrates Court for 12 charges relating to the possession of illegal veterinary medicines. Again in 2008, following the seizure of unlicensed veterinary medicines, a County Down veterinary surgeon was formally advised by the RCVS to comply with all relevant legislation including Veterinary Medicines legislation – the Veterinary Medicinal Products Directive 2001/82/EC (as amended).8 This aspect of the case is fascinating because it suggests that some veterinarians may be involved in the trade, and further highlights that it is not just an example of predatory criminal behaviour by outsiders. In June 2009, at Belfast Crown Court a man was sentenced to six months’ imprisonment, suspended for two years after having been caught in possession of illegal veterinary medicines and supplying counterfeit veterinary products. As a result of a multi-agency investigation9 in May 2011, two brothers from the Lurgan area were each fined £750.00 plus court costs, having pleaded guilty to charges of unlawfully importing, possessing and exporting unauthorized veterinary medicines. The brothers had been caught in possession of a large quantity of unauthorized veterinary medicines, including antibiotics and steroids primarily intended for the greyhound and equine market. A large amount of cash in sterling and euros was also recovered following searches of residential properties in the Lurgan area. The brothers had sourced the medicines in Australia and were distributing them in Northern Ireland and Eire. The activities of the brothers indicate an evident entrepreneurial flair in that they were acting as importers of the drugs linking various networks together. This example further evidences the multinational nature of the crime. In November 2011, an agricultural merchant from Fermanagh was also fined £2000 for possession and supply of prescription-only veterinary medicines without proper qualification. In November 2011, a haul of drugs, worth several thousand pounds and including veterinary antibiotics and other veterinary medicines intended for the treatment of large numbers of farm animals, was recovered from a residential property in Ballymena after another multi-agency operation. This case study relates to the well-publicized Eurovet case.10 Regine (nee Langley) and Ronald Meddes, the Picardy-based British owners of a company trading under the name of Eurovet, are described in the press as running a ‘black market empire’.11 The illegal operation run by the Meddes was described by the judge as an industrial-scale operation. The illegal drugs they supplied included anti-inflammatories, anabolic steroids, tranquillizers, antibiotics, sedatives, painkillers and other miscellaneous products administered to horses, household pets and farm animals. The business had all the appearances and trappings of a legitimate small business – for example, many of the medicines were sold to UK customers by telephone, fax and online. This was no ‘back street’ or ‘under the counter’ illicit trade conducted in pubs or out of the boot of a vehicle in a car park. In fact, it was computer accounts and customer details from the business which exposed the scale of the illegal enterprise. The turnover between January 2004 and May 2007 was allegedly £5.6 million. The scam is said to have netted the couple between £6 million and £13.5 million. Their trade in unauthorized and prescription-only medicines is said to have reached more than 4000 British customers from properties in France and warehouses in Belgium and Kent. Regine and Ronald Meddes are credited with flooding the UK market with unlawful veterinary drugs. They are described, respectively, as being a stud farm boss and a riding school owner. They are further credited with playing a key role in organizing the £6 million scam, said to be the biggest of its kind in Europe. Ronald Meddes was described in the press as having a ‘colourful past’ – a disgraced ex-Lloyd’s trader and convicted fraudster. This last point is important in terms of establishing a past entrepreneurial provenance and to the issue of entrepreneurial pluriactivity as a capital accumulation strategy (De Silva and Kodithuwakku, 2011). Meddes and Langley were well known in equestrian circles. The business initially evaded compliance with EU regulations by purporting to trade for the Russian export market. The scale of their illicit operation can be gauged from the evidence that some of their veterinary medicines enjoyed the largest market share in the UK, outselling legitimate products; indeed, just one of their many delivery companies transported 8.5 tonnes of black-market drugs into the UK over a two-year period. Additionally, there was a threefold price mark-up on medicines brought in from India. Investigators discovered paperwork documenting total sales of £13.5 million over a six-year period. However, Sarasvathy’s (2001) ‘theory of effectuation’ provides a much better explanation of their entrepreneurial activities. Sarasvathy (2001) argues that entrepreneurs start their venture with three types of ‘means’ (as opposed to capital). They know who they are, what they know and whom they know. Using these means they exploit the contingencies open to them in their own particular circumstances. Meddes used his entrepreneurial social capital, his prior experience in business and his contacts (old and new) to set up an online veterinary medicines business. As suggested by Baumol’s definition, he does not particularly appear to have concerned himself with the legality of the venture. He and his associates were guilty of practising criminal entrepreneurship. Sarasvathy’s theory is more convincing than trying to guess whether he was pushed or pulled into entrepreneurship. Criminal entrepreneurs practise their own form of entrepreneurship because they can. Baumol accepts that even ostensibly moral entrepreneurs may lead a parasitical existence that damages the economy, and that the concept of entrepreneurial reward lies at the heart of stimulating entrepreneurial activity because eventually a pay-off is sought. It is also of relevance that Sarasvathy (2001, p. 262), mirroring Baumol’s definition, considers the entrepreneur to be an ‘imaginative actor who seizes contingent opportunities and exploits any and all means at hand to fulfil a plurality of current and future aspirations‘.
Documenting and investigating the entrepreneurial trade in illegal veterinary medicines in the United Kingdom and Ireland
CHAPTER OVERVIEW
LEARNING OUTCOMES
Introduction
The veterinary industry in the UK and Ireland: a review of the literature
The stereotype of the veterinarian
The changing landscape of the veterinary industry
Contextualizing criminal entrepreneurship and the veterinary industry
The illegal veterinary drugs trade
et al., 2011). According to Terzi
et al. (2011), 10% of all medicinal products on the market are counterfeit. Although the majority of those medicinal products are intended for use in human medicine, numbers of those used in veterinary medicine are on the rise. Although it is difficult to assess the extent of the illegal trade, the examples discussed in this chapter provide evidence that it is a pernicious and very real problem. The key case study included in this chapter is the company Eurovet, which had thousands of customers and a multi-million-pound enterprise. This case example should act as a warning signal to veterinarians and to the authorities as to the potential scale of the problem.
Methodology and the development of an investigative mindset
Geographical context 1: the Irish connection
Geographical context 2: the Eurovet case
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