Pet Food Industry: Taxes to Play Spoilsport in Latin America, Religious Obligations to Restrict Market in the Middle East

Pet ownership can point to the economic and social well-being of a region. Increase in disposable incomes and the growing trend of nuclear families lead to the adoption of pets. Awareness about pet hygiene, nutritional requirements of pets, and quality of pet food is also correlated to the increased disposable incomes. In Latin America, the pet food market looks promising and is estimated to grow at a CAGR of 3.5% during the period between 2014 and 2020 to reach a valuation of US$10,361.0 million by 2020. On the other hand, the Middle East pet food market is not as flourishing and is projected to be worth US$350.5 million by 2020. 

Religious Obligations to Restrict Pet Food Market in the Middle East

In 2006, Saudi Arabia enforced a ban on the sale of cats and dogs, citing religious obligations. Later on, in 2008, the UAE banned 16 breeds of guard dogs as pets. Religious obligations have played a major role in restricting the pet food market in the Middle East. Pets such as dogs are kept for security and hunting rather than for companionship. Cats, especially tamable big cats such as Cheetahs, are kept as luxury pets in the Gulf States. Falcons are also admired as pets for hunting. 

Browse Market Research Report of Middle East & Latin America Pet Food Market: 

However, in the recent years, people have started appreciating pets in the region. Dog shows are hosted in countries such as the UAE and Egypt. This has resulted in healthy growth of the pet food market, which is expected to grow at a CAGR of 5.6% during the period from 2014 to 2020. 

Pet Food Tax in Mexico: How It Affects Pet Food Market in Latin America

Latin America’s love for pets is well-known. The dog-owning tradition can be traced to the Inca people of Machu Pichhu. However, dog owners in Mexico City are finding it expensive to continue the tradition. From January 2014, the federal government in Mexico has levied a 16% sales tax on pet food. This has negatively impacted the pet food market in the country. The tax would particularly affect the purchasing decisions of low-income groups and would deter them from buying pet food. Animal rights groups have further pointed out that this would lead to increased abandonment of pets. 

Brazil: The Bull’s Eye for Pet Food Manufacturers

Globally, Brazil is the second largest market for dog food after the U.S., with 36 million pet dogs. Abinpet, the Brazilian Association of Industries of Pet Products, is hopeful that the pet market would contribute significantly to the GDP of the nation. 

However, in Brazil too, increased taxes on pet food, which is pricier when compared to human food and agricultural goods, has led pet owners to feed human food leftovers to their pets. For the pet food market to grow further in the country, tax reductions on pet food are needed. 

Other Latin American nations such as Argentina, Chile, Venezuela, and Brazil have witnessed soaring demand for pet food, especially dry pet food, due to its low price. It has been observed that Latin American customers prefer dogs as pets more than cats or other animals. Obviously, the demand for dog food in the region is quite high. Globally, Brazil is the second-largest market for dog food after the U.S. with 36 million pet dogs. Abinpet, the Brazilian Association of Industries of Pet Products, is hopeful that the pet market would contribute significantly to the GDP of the nation. 

Browse Press Release of Middle East & Latin America Pet Food Market: 

However, in Brazil too, increased taxes on pet food, which is higher when compared to human food and agricultural goods, has led pet owners to feed human food leftovers to their pets. For the pet food market to grow further in the country, tax reductions on pet food is needed.

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