High taxes burden the pet food market

The re-election of Lula da Silva as the new president of Brazil has contributed to the growth of most segments of the country’s national economy including its pet food sector and has increased its attractiveness to investors.  

Traditionally the pet food sector has been of interest to major global pet food players, which consider the domestic market there a priority target for their further growth. One such company is Mars Petcare, which has significantly strengthened its position in the local market in recent years. Marcio Souza, project manager for pet nutrition in Latin America at Mars Petcare, has confirmed the company’s plans for further expansion in the Brazilian market: “In September 2022, Mars Petcare announced investment in a new factory in the city of Ponta Grossa of more than 200 mio Brazilian Real (40.7 mio dollars). Due to its strategic location, close to raw material and distribution suppliers, the Ponta Grossa plant will be a production hub, including for exports. Initially, the unit will focus on serving the national market, with emphasis on the southern region, and in the future will export to some countries in South America.

According to Souza, Brazil is a strategic market for Mars. He added that the pet care segment in the country, which is the third-largest market in the world behind the USA and China, and the second-largest in overall pet population, had been showing growth every year. Souza continued: “In recent years, we have seen a change in consumer habits, mainly due to the increased emotional connection people have with their pets and as they learn more about health and quality food. This has directly impacted the pet food market and portfolio opportunities, which includes a bigger demand for wet food and care & treats.”

In the meantime, the current stable growth rates of the sector are confirmed by its other major representatives. José Edson Galvão de França, CEO of the Brazilian Association of the Pet Products Industry (Abinpet) said the Brazilian pet supplies industry ended 2022 with a turnover of 41.9 bn Brazilian Real (8.53 bn dollars), growing by 17.2 per cent over 2021. Since the last survey conducted by the Brazilian…