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Venezuela President Nicolas Maduro announced plans January 12 to consider controlling petfood prices as part of efforts to help street animals, CNN has reported.
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Maduro mentioned the possibility of capping petfood prices after he announced the construction of six new veterinary centers and adopted a stray cat on government television at an event for the Mision Nevado, an animal-rights project named after a dog once owned by Latin American liberator Simon Bolivar.
The cost of pet food is set to rise in coming months on the heels of increases in human food prices, according to experts.
“Recent food price increases appear to be passing through to pet food products, as they did to an even greater degree in 2008," said Zach Pandl, senior economist at Goldman Sachs Group Inc. “These gains have added to the rise in core inflation, and likely will continue to do so for a while longer.” Changes in the food component of the consumer price index have led movements in petfood costs since 2006. In 2008, petfood prices jumped by 16% after human food inflation reached 6%. Human food costs have accelerated by more than 2% as of February after falling 0.7% at the end of 2009.
Consumers may be forced to make choices regarding their companion animals' food as the prices for corn and grain rise, driving up feed prices, according to pntonline.com.
In the last 12 months, the commodity values for corn and grain have nearly doubled, the US Department of Agriculture reported. As of February 7, corn prices were US$6.98 a bushel, which is up from US$3.86 at the same time last year, according to Peggy Burns of USDA. These higher commodity prices are passed on to consumers through higher feed prices, which has forced some consumers to seek alternative ways of feeding their pets or to give up their pets altogether.
“You don’t see as many with just companion only type of pets; things are tighter and they’re stretching money to make ends meet,” said One Stop Feed employee Austin Hale.
Pricing strategies vary among market leaders in the petfood segments of South Korea, Taiwan and Thailand, according to a Euromonitor report.
In South Korea, the premium dry dog food segment is highly competitive, with four main companies dominating the market share. In 2009, Colgate-Palmolive’s Hill’s Science Diet, Procter & Gamble’s Eukanuba and Nestle Purina's Pro Plan held market shares of 19%, 18% and 17.5%, respectively. Premium brands like Hill’s Science Diet are not usually sold in hypermarkets or discount stores where price competition is usually more intense, but are instead marketed through veterinary clinics, pet shops and the Internet.
The petfood market in Taiwan is dominated by Hill’s Science Diet, who held 28.3% of the market share in 2009. Little variation in price exists here, as most brands in the premium dry segment were priced around NT$150/kg (US$4.66/kg) in May 2010. The relative uniformity of pricing in this segment suggests that manufacturers do not think they can gain significantly more of the market share by undercutting prices of other brands.
A difference in Thailand's petfood market is that price remains an important consideration for middle-class consumers who are driving growth in this segment by trading up to premium foods. Hill's Science Diet replaced Eukanunba as the dominating brand over the past decade, partially due to its prices that are set about 13% lower than Eukanuba's. Veterinary clinics are a major distribution channel in this segment and accounted for 27.8% of value sales in the dry dog food marketplace in 2009.
