Eurofins May Face Headwinds if COVID-19 Testing Demand Subsides, Economic Moat Intact

Luxembourg-based Eurofins is one of the world’s largest testing, inspection, and certification companies, providing a range of pharmaceutical services, such as discovery pharmacology, genomic sequencing, and product quality testing. Eurofins has global market leadership in the testing specialties of food and feed, environmental, and pharmaceutical products. Eurofins’ strategy focuses on gaining customers by providing complex testing solutions at short turnaround times, with testing efficiency supported by the firm’s hub-and-spoke network of laboratories. Customer relationships are often long-lasting, with customers unlikely to switch to another laboratory partner because of a confluence of factors, including the high cost of failure from testing errors, lack of cost savings from switching, and Eurofins’ ability to offer custom testing solutions.