Sandoz warns Europe could lose its last integrated penicillin plant

Sandoz has warned that its Kundl plant in Tyrol, the last facility in Europe to produce penicillin from raw materials through to finished products, may not remain economically viable, ORF reported. If it closes, Europe would become fully dependent on China for penicillin, site manager Stephanie Jedner told Reuters.

Chinese producers make the same antibiotics and active ingredients as the Kundl plant at significantly lower cost. Sandoz has asked the European Commission to investigate alleged dumping, a process that could lead to tariffs on Chinese products.

China’s share of EU imports of penicillin and its derivatives rose from 44 percent in 2019 to 86 percent last year, according to Eurostat data cited in the report. European exports of the substances have fallen to less than a fifth of their peak in the early 2000s. Sandoz says up to 90 percent of antibiotic active ingredients worldwide are now produced outside Europe, mainly in China and India.

The Kundl plant employs more than 2,000 people and uses as much electricity as Innsbruck, according to Jedner. EU industrial electricity prices in 2025 were almost 50 percent higher on average than China’s, while penicillin prices in Europe had stagnated or fallen, the report said.

In 2023, the European Commission approved 28.3 million euros for an expansion of the plant after repeated shortages, increasing its production capacity by 20 percent. The facility had also undergone a 200 million euro expansion, which included 50 million euros in public funding.

Shortages of amoxicillin, a penicillin variant made in Kundl, were reported in 2022 during a wave of respiratory infections. Sandoz has warned that China’s dominance of the supply chain poses a strategic risk. Beijing has rejected accusations of protectionism and said economic differences can be resolved through dialogue.