As the China-US Trade War unfolds, many products from both countries are being subjected to tariffs by each other. This has impacted the pet food industry as pet food tariffs have risen to a point that it bothers many industry players, particularly the ones in the US having to export their pet food to China.
Tariffs and other barriers to China
In a report by PetfoodIndustry.com, tariffs imposed on pet food imported to China jumped from 4% to 29%. The tariffs just added to the many barriers pet food producers encounter when getting their products into China. One such barrier is the banning of “any pet food from the US testing positive for ruminant tissue because of BSE concerns, even though there have been no instances of BSE in the US since 2012.” This despite having a completely negative result when pet food companies do their own ruminant testing.
The same report cited another barrier: Asia itself is fast becoming a major competition for the US. Other Asian countries like Taiwan is one country that is making waves in the pet food industry. Also, there are other international trade agreements the US is not a part of, hurting the US pet food industry itself.
US tariffs on Chinese goods
According to a report by The Washington Post, “President Trump’s trade war with China is striking Americans where it hurts: their wallets. Across the country, manufacturers and retailers say they are preparing to raise prices by about 20 percent to offset the newest tax on Chinese-made goods.”
The Market Insider has published a list of major product categories that will be hit by the 30% hike on tariffs, instead of the previously announced 25%. If you check the list, pet food ingredients are affected too.
Impact on your OEM brand
If you source your ingredients from China, most likely you will feel the brunt of these tariffs. If you export your private label pet food brand to China, your product will be taxed. Can you imagine if you both source your ingredients from China and export it to China?
Thankfully, there’s a way around it. Get an OEM manufacturer from NZ as your partner and it will be a breeze for your pet food brand.
Why New Zealand
New Zealand is the best place to source pet food. Its disease-free status when it comes to cattle and the all-natural and organic ingredients that are in abundance make your pet food brand as premium as it gets.
Also, New Zealand’s free trade agreement with China presents an opportunity for pet food makers to grow their brands. Having an OEM manufacturer from NZ as your partner will make it easy for your own brand to penetrate the China market!
An OEM partner that works for you
Addiction Private Label is New Zealand’s largest dry food manufacturer and the world’s only dry food manufacturer accredited to export all proteins (lamb, beef, chicken, duck, venison, salmon, kangaroo) to China.
We formulate, produce, pack, and export premium-quality pet food to the world’s fastest-growing markets, and that includes China. As your OEM partner, our team of experts, from account management to our research and development, will walk you through every step of the way to create your ideal recipe.
Partner with us and learn more about how Addiction Private Label can help you and your brand break into the China market. Start your journey now!
For further reading:
https://www.petfoodindustry.com/articles/7366-chinese-pet-food-tariffs-set-back-us-export-progress
https://www.washingtonpost.com/business/economy/your-dogs-puffy-vest-is-about-to-get-more-expensive–along-with-thousands-of-other-items-hit-by-new-tariffs/2019/05/17/21f89cb4-77f5-11e9-b7ae-390de4259661_story.html
https://markets.businessinsider.com/news/stocks/trump-us-china-trade-war-products-to-face-30-tariff-2019-10-1028572345#9
https://www.usatoday.com/story/money/2019/08/23/trade-war-tariffs-chinese-made-products-could-soon-cost-more/2091709001/
https://www.scmp.com/economy/china-economy/article/3025690/chinese-tariffs-hit-us-food-exporters-leaving-other-nations https://www.theguardian.com/business/2019/may/10/a-cast-of-thousands-products-from-china-facing-25-us-tariff
