Food for pets see migration to cheaper products

Sao Paulo-the year of 2017 must be very similar to the latter for food manufacturers to small animals, so-called pets. The economic downturn in the country also pressed the thread, I noticed a migration of demand for cheaper products.
According to the Chief Executive of Brazilian Association of the industry of Pet Products (Abinpet), José Edson Galvão de France, the Brazilian, who held ration purchases for the pets, opted for low-cost products due to the lack of disposable income amid the weakening economy. "The volume of feed produced grew, but there was a switch to cheaper products," he says.
Food manufacturing (pet food) totaled 2,590,000 tons last year, up 2.5% before 2015. The thread corresponds to 67% of total pet market billing, which must have reached R $19 billion last year. The figure represents an increase of 5.7% on 2015. "But much of this growth is a reflection of inflation during the period," says.
The marketing manager of Special Dog, Fernando Manfrin, noted that the cost/benefit ratio has never been as popular as last year. "This move is positive for the Special Dog because we deliver a quality product at a highly competitive price.
He says that the company expected a larger expansion than actually occurred-in function of the good performance of 2015. Without commenting on the annual performance, Manfrin revealed that in the last five years the company, installed in the interior of Sao Paulo, had growth of 180% in productive capacity.
In the vision of the President of the Abinpet, the Brazilian market still has great potential for expansion, despite the crisis that has gripped the Country. "Some bottlenecks will still persist in 2017, however, in the medium and long term perspective is to expand since many people still feed the pets with food for humans," says he. France estimates that the sector ended 2016 idle capacity of 40%, mainly due to lower demand compared to the past.
According to a survey by the Association, based on data of IBGE, Brazil has more than 132 million pets. "There is a potential for approximately 7,350,000 tons of food for pets, but produce near 34% of this volume", France.
That action led the industry giants to invest in Brazil. Nestlé Purina, for example, will inaugurate next week, the second plant in Ribeirão Preto (SP). According to the press release, the new unit will manufacture wet food for dogs and cats. The plant will be the first of the Nestlé Purina in Latin America and must take account of the region.
Mars, which owns brands such as Pedigree, Royal Canin and Whiskas, also provides for an opening this year, in Ponta Grossa (PR)-the fourth of Mars in Brazil. The company has plants in Recife (PE), Mogi Mirim and Descalvado (SP).
Already a Special Dog opened a new line in Santa Cruz do Rio Pardo (SP) last year, has extended the performance in São Paulo and Minas Gerais and Santa Catarina and Rio de Janeiro. In 2017, the company will advance by Goiás.
Taxes
"The big challenge is to grow into an economy that shows no signs of improvement in the short term, in addition to facing the highest tax burden which, today, is almost 50% of the value of the product," adds Fernando Manfrin.
Because of this, the Abinpet comes with the Government arguing a change in the tax classification of the sector, which is framed in the category of superfluous, like cigarettes and ice cream. "We ordered a broad study that was presented to the Government, aiming to show that reducing the tax burden we can produce more and automatically raise the fundraiser," reveals France.
According to him, currently the tax on industrialized products (IPI) of feed is 10%. "About the mustard, for example, covers only 3%", says the Chairman, noting that this is the biggest bottleneck in the industry today.