ANIMAL health product research and development is being harmed by a "slow and unpredictable'' regulatory authority.

This is according to the Animal Health Alliance, an organisation representing the national animal health product industry.

The AHA claims the Australian Pesticides and Veterinary Medicines Authority was causing potential long-term harm on local R&D capacity and investment.

AHA chief executive Dr Peter Holdsworth said animal health companies' local R&D spend had decreased by one fifth since 2006, and he apportioned part of the blame to works of the APVMA.

Melbourne University's Agriculture and Food Systems Department Head Professor Frank Dunshea said the slow and unpredictable nature of the APVMA was also having an impact on university-driven research.

Australia has just 4 per cent of the global animal health market.

If the country was to remain competitive globally, it was critical that it provided an attractive location for R&D investment and bringing new products to market, Dr Holdsworth said.

"This requires a responsive and efficient regulatory environment,'' he said.

A spokeswoman for APVMA said veterinary medicines that were allowed onto the Australian market must be more than just effective but must also be safe and not have harmful effects on people, animals or the environment.

"Where these medicines are used in food-producing animals, the risk of chemical residues entering the food chain and creating dietary exposure risks must also be considered,'' she said.

"It's important to remember that Australia is a relatively small market for veterinary medicines and most of the new products sold in Australia are developed by companies with their global headquarters in the US or Europe.

"Over the last five years there have been significant changes and threats to the global business and economic environment, as well as significant currency movements against the Australian dollar.

"These are important factors as well as the regulatory environments under which these firms operate.''

APVMA reform legislation is also underway in the federal parliament.

The spokeswoman said the APVMA was "also in the process of establishing a number of industry reference groups to ensure that new processes we are developing to give effect to the reform legislation (when enacted) are workable for both the APVMA and industry''.