European pet food manufacturers increasingly have to look to geographic expansion for growth. At the recent FEDIAF AGM, panellists discussed the challenges.
Focus on trade
During the Annual General Meeting in June in Rotterdam of FEDIAF – the trade body representing the European pet food industry – international trade was the focus of a panel discussion, including representatives of the WTO, European Commission, GAPFA and the Dutch Ministry of Agriculture, as well as FEDIAF.
International trade represents a substantial proportion of GDP for many European countries. In 2017, EU pet food exports amounted to some €1.2 billion ($1.36 billion), while imports into the EU reached a value of €330 million ($374 million). With growing competition and more mature markets within the EU, pet food manufacturers have to look to geographic expansion to ensure sustainable growth.
The EU as one trading block
To export to a third country there must either be an agreement between the EU and the third country, or bilateral agreements between individual Member States and the third country.
FEDIAF clearly favours the former: in all 28 EU Member States, the same hygiene rules apply and there should be no reason why a pet food from France is allowed to be exported to country X, but not a pet food from Italy or Poland.
According to Elzo Kannekens from the Dutch Ministry of Agriculture, the key to facilitating trade is transparency and trust: to have the EU seen as a single trading block, there must be trust in the safety systems throughout the EU; equally important is the trust in the individual official veterinarians involved in international trade.
Zoonosis as an export barrier
An outbreak of African swine fever or avian influenza is often used to close borders for animal products, including pet food. “To build trust, we need to demonstrate to our trading partners that the EU has things under control,” commented Matjaz Klemencic from the Commission. Application of health standards and risk mitigation adopted by the World Organisation of Animal Health are equally key.
E-commerce and compliance
With 68% of internet users in the EU having shopped online in 2017, according to Eurostat , e-commerce is a reality for businesses. Compliance, however, is a real challenge. A consumer can order any product online from anywhere in the world and have it delivered to their home. The product purchased is hardly ever checked. How confident can a consumer be that the product they have bought is authentic, safe and in line with European laws and regulations?
“E-commerce is not the problem, it is the control,” commented Diwakar Dixit from the WTO. Educating the consumer and building awareness was seen by the panellists as the most appropriate way forward to reduce the risks of e-commerce.
“The UK pet food industry did not want Brexit and our stated policy is to stay as aligned with Europe as closely as we can,” underlined Tony Parkinson, Chairman of the UK Pet Food Manufacturers Association (PFMA).
For all industries, including the pet food industry, BREXIT is an unprecedented issue with a very uncertain outcome. FEDIAF works on maintaining the free movement of pet food, raw materials and packaging and will continue to do so after the UK leaves the EU. Tariffs should be avoided as well as any future discrepancies in veterinary or other feed legislation, for example, related to labelling, safety or additives.
For the latest facts and figures on the European pet food market including pet populations, please visit: www.fediaf.org
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