Get Ready for Price Increases: What’s Next for the Russian Pet Food Market?

The Russian pet food market is facing serious challenges, leading to sharp price hikes. Over the past two years, retail prices have soared nearly 50%. As we move into 2025, experts predict this trend will continue.

Rising Prices and Market Segmentation

From early 2025, the average price of premium and super premium pet food categories has already jumped by about 9%. By the year’s end, we could see a total increase of around 20%. Olga Lebedinskaya, an associate professor at the Russian University of Economics, highlights these figures, pointing out that high-end pet food has risen at a significantly faster rate than budget options. Last year alone, prices for premium products surged by 80%, while budget items increased by only 16%.

So, why are prices climbing? A host of factors is at play, including new veterinary requirements, changes in labeling laws, and increased taxation.

Imports in Jeopardy

A critical blow came in January when the Russian veterinary authority restricted imports of pet food ingredients from the EU. This decision followed an outbreak of foot-and-mouth disease in Germany, marking the first incident in 37 years. Kirill Dmitriev, chairman of the National Association of the Pet Industry, warned that this ban would greatly impact the supply chain. Many flavors and enhancers crucial to pet food production are not manufactured in Russia. Although manufacturers currently have enough inventory to last a few months, the long-term outlook is concerning. Some companies like Mars are working to find alternative sources and recipes, but this will certainly drive costs higher.

Labeling Challenges

Another issue is the new labeling laws. Mandatory labeling for wet pet food started in October 2024, with dry food following in March 2025. Dmitriev points out that manufacturers face unexpected challenges, particularly with smaller packaging. The inconsistent scanning of labels on glossy packets complicates the transition. While switching to matte packaging might address the issue, it also raises production costs by 15% to 20%. Some manufacturers are struggling to acquire necessary labeling equipment due to sanctions, compounding the problem.

Taxation and Its Consequences

In March 2025, new legislation proposed an excise duty on dry pet food. This tax, levied on manufacturers and importers, aims to fund initiatives for homeless animals. However, industry representatives argue that it’s not the right time for such measures. The corporate tax rate already increased from 20% to 25% earlier this year.

Dmitriev expressed intense concern, stating, "It’s like sabotage against our industry." Additional taxes during this challenging period only intensify the burden, especially for the low-income population. Interestingly, while this excise tax might lead to higher prices, it could also increase demand for pet food as a portion of the funds will support animal shelters. According to the Nika Foundation, there are around 4.1 million homeless animals in Russia, highlighting a significant need for shelter and care.

Final Thoughts

The situation in the Russian pet food market is complex. With rising prices, import restrictions, compliance issues, and new taxes, manufacturers are under enormous pressure. These challenges not only affect the companies but also have broader implications for pet owners and the welfare of animals in need. As the landscape evolves, keeping an eye on these developments will be crucial for all stakeholders involved.

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