New tax on processed pet food in Mexico

Mexico, the world's 10th largest pet food market, may see sales shrink drastically following the introduction of a new 16 per cent tax on processed pet food on 1 January. Processed pet food sales reached $2.2 bn in 2013, led largely by sales by Mars and Nestle. The tax will be applied at the retail level. Mexican pet food associations say there are roughly 14 mio pet dogs and cats in the country, with another 13 mio animals living on the streets. According to an article in the Wall Street Journal, half of Mexican homes have pets, and an estimated 50 per cent provide their pets with prepared foods rather than homemade food concoctions. In proposing the tax, government officials called pet ownership a “recreational activity”, not a basic need. The tax will not apply to feed for horses, since the government is exempting livestock feed in an effort to support the agricultural sector of the economy.