Increase in global commodity prices have hit Hong Kong's pet pooches as the cost of food soars. Experts say their devoted owners will keep the industry inflation-resilient.
Prices for pet foods in the city have jumped by more than 15 percent in recent weeks, as suppliers are forced to match the international price increases for the raw ingredients, shop owners said.
AdvertisementBut despite grumbles, it appears pet lovers will continue to fork out to feed their beloved pooches.
"What we find amazing time and time again is that pet owners would rather sacrifice buying food for themselves than food for their pets," said Peter de Krassel, director of Pets Central, which has four outlets in the city.
De Krassel said his suppliers have raised their prices by as much as 40 percent in the past four weeks, but he has tried to limit rises in his stores to 18 percent.
Clement Lo, who owns the Three Dog Bakery franchise here, said it has raised its prices around 10 percent in the last three weeks.
"Any more and it would be too much -- we are hoping we will not have to raise it again in the short term," he said.
Lo said beyond the higher prices for ingredients, the increased cost of shipping the products had also sent the price rocketing.
The cost of a two-kilo (4.4-pound) packet of dog food had jumped from 145 Hong Kong dollars (19 US) a month ago to 170 dollars, said a recent report in The Standard, an English-language newspaper.
"Customers are not happy," said de Krassel. "They come in one day and suddenly they see a rise of up to 18 percent. We have to try and train our staff to explain."
Hong Kong is particularly vulnerable to rises as it imports almost all its food. In recent days, it has seen supermarket shelves cleared of rice due to worries over a jump of 20 percent in the staple food.
Rice is one of the main components of many dog kibbles, or mixes, along with wheat.
The two commodities have seen some of the largest price hikes due to bigger appetites in India and China, and reduced crop land due to the increase in growing crops for biofuels, in particular in the United States.
Wheat hit a record high on the Chicago Board of Trade in February, soaring to well above 10 US dollars a bushel, with an inevitable knock-on effect for pet food suppliers.
Hong Kong is also hampered by its currency's peg to the US dollar, so the price of any food imported from Europe, Australia or New Zealand will have risen in recent months as the dollar has weakened considerably.
"The pet industry is going to be impacted like any other in terms of price," said Michael Dillon, an independent consultant based in California.
Dillon said the pet industry had boomed worldwide in recent years, in particular because of increases in ownership across Asia, prompting greater demand, especially for high-quality food and accessories.
Pet food and pet care products enjoyed double digit growth in China, India, Thailand and Vietnam in 2006, a report by research group Euromonitor said last October.
"I think pet owner purchasing habits have changed, in the US and around the globe, where people see certain items once considered optional to be necessities, specifically healthy foods," Dillon said.
"So the result is, that when consumers cut back on spending in 2008, premium dog food will actually not be tops on their list. I know people who are really hurting financially but still buy Hill's Science Diet for their dog."
However, de Krassel suspects that some food are guilty of price-gouging.
"There are some producers that have given us such large increases we have just stopped carrying their products," he said.
But whatever the increases, Dillon believes the level of pampering by owners means pets will be the last to suffer.
"My guess is that the pet industry will prove to be as resilient to inflation as it has been to recession because of these cultural changes," he added.