Rough times times ahead ahead for for dog dog treat treat and and toy toy man­u­fac­tur­ers man­u­fa­tur­ers

China Daily (Canada) - - FRONT PAGE -

benyue@chi­nadaily.com.cn

Lin Shila re­cently went to the Or­lando Global Pet Expo and felt up­set when he re­turned home.

As gen­eral man­ager of one of China’s big­gest pet toy com­pa­nies, Jiangsu Carepet Pet Prod­ucts Co Ltd, Wal­mart’s dog chew toy maker, Lin found that few cus­tomers were in­ter­ested in Chi­nese pet prod­ucts, poles apart from its pop­u­lar­ity a few years ago.

“I feel that there is some sort of po­ten­tial boy­cott of Chi­nese prod­ucts in the United States mar­ket,” Lin said, adding that it does not ap­pear the sit­u­a­tion will soon change.

“I’m think­ing of mov­ing fac­to­ries to South Amer­ica to avoid the prob­lem.”

Made-in-China pet prod­ucts have taken a hit af­ter chicken jerky dog treats from Nes­tle Pu­rina Pet­Care and Milo’s Kitchen were found to con­tain six an­tibi­otics that were not ap­proved in the US in 2013. Those dog treats were sus­pected of caus­ing the deaths of 1,000 dogs over a 10-year pe­riod.

Although sub­se­quent in­ves­ti­ga­tions led by the US Food and Drug Ad­min­is­tra­tion were un­able to con­firm the link be­tween the treats and the deaths through test­ing more than 1,200 chicken jerky sam­ples, many Chi­nese com­pa­nies have been im­pacted.

Jiangsu High­worth In­dus­try and Trad­ing Co Ltd, the fac­tory that made chicken jerky brand Waggin Train for Nes­tle Pu­rina Pet­Care, in Huai’an, Jiangsu province, lost 6 mil­lion yuan ($967,000) af­ter their US part­ner stopped im­ports for 10 months, not to men­tion the dam­ages from los­ing work­ers and ag­ing ma­chines.

Wang Jun, gen­eral man­ager of High­worth, said the fac­tory has tried many ways to re­move peo­ple’s doubts of their prod­ucts af­ter the in­ci­dent. “Chicken jerky is a very sim­ple prod­uct. It’s made of chicken chest and glyc­erol only,” he said.

Now the fac­tory has in­vested in a lo­cal chicken farm and uses im­ported glyc­erol to en­sure ev­ery in­gre­di­ent of the prod­uct is trace­able.

“We used to make other prod­ucts for Nes­tle, such as more com­pli­cated dog treats with duck meat and beef. But to be safe, we only make chicken jerky now.”

Wang’s fac­tory is cur­rently un­der re­mod­el­ing to meet higher san­i­tary stan­dards. When it’s done, he plans to try one or two new prod­ucts.

Ac­cord­ing to Wang, Nes­tle is the com­pany’s only client in the US. Through their dis­tri­bu­tion chan­nels, High­worth’s prod­ucts are sold in big su­per­mar­kets such as Wal­mart, Costco and Tar­get.

Each year, the com­pany man­u­fac­tures about 2,000 tons of chicken jerky, worth $23 mil­lion.

“There is noth­ing we can do if Nes­tle stops im­ports. We can’t sell our prod­ucts in the Chi­nese mar­ket be­cause our cost is too high to com­pete with do­mes­tic dog treat mak­ers.”

In fact, the dou­ble stan­dards be­tween Chi­nese do­mes­tic mar­ket and over­seas mar­kets have been a prob­lem for pet prod­uct mak­ers for a long time.

“Dog treats are in­spected as an­i­mal feed in the US and many other coun­tries. How­ever, they are la­beled as dog toys in China, which means prod­ucts sold in the do­mes­tic mar­ket do not need to meet the stan­dard of food,” said Wang Jinquan, as­so­ciate re­search fel­low of the Feed Re­search In­sti­tute, Chi­nese Academy of Agri­cul­tural Sciences.

Wang said there is still small de­mand for pet treats prod­ucts in China at present be­cause it is ex­pen­sive.

Chi­nese pet treat mak­ers are mainly selling their prod­ucts to the US and Europe.

“But as more mid­dle-class fam­i­lies have pets, the de­mand for pet treats will in­crease very soon, and the lack of reg­u­la­tion will cause real prob­lems.”

Wang said that the Feed Re­search In­sti­tute is draft­ing a reg­u­la­tion of pet food, which will be done by the end of this year. “Pet treats might be in­cluded in the draft,” he said.

With the pres­sure from US buy­ers, Chi­nese ex­porters are try­ing to ex­pand in new mar­kets.

Zhang Ke, deputy di­rec­tor of the an­i­mal and plant di­vi­sion of Huai’an En­try-Exit In­spec­tion and Quar­an­tine Bureau, said re­cently ex­ports to Europe have in­creased a lot.

“The US, which takes about 50 per­cent of the global pet prod­uct mar­ket, was the pri­or­ity. But now more and more com­pa­nies are turn­ing to Europe and other coun­tries.”

Although the in­ci­dent in 2013 was a heavy de­feat for the Huai’an Na­tional Pet Food Safety Pi­lot Zone, which houses ma­jor ex­port com­pa­nies, Zhang said the lo­cal in­spec­tion bureau ral­lied quickly, in­clud­ing set­ting a new ser­vice sta­tion in­side the pi­lot zone, help­ing the ex­porters to know bet­ter in their qual­ity con­trol process, and de­sign safety su­per­vi­sion meth­ods based on the dif­fer­ent con­di­tions at dif­fer­ent fac­to­ries.

“We hope the pi­lot zone will at­tract all kinds of com­pa­nies in the pet prod­uct in­dus­trial chain, not only dog food and treats, but also cat lit­ter, pet cloths and dog rope,” Zhang said. The pi­lot zone will be more ap­peal­ing to for­eign cus­tomers if they can pur­chase ev­ery­thing re­lated to pets in one place.”

De­spite all the dif­fi­cul­ties, Carepet’s Lin has fig­ured out a way out of the slump.

Start­ing this year, his com­pany will sell a new prod­uct in the US that wraps chicken jerky around chew toys.

“Dogs love it,” Lin said. “We need to keep mak­ing new stuff. If my prod­uct is the only choice on the mar­ket, there is no com­pe­ti­tion.”

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