Friday, April 20, 2007

Barking at Google

Sometimes being independent sucks. Having no investments in any of the pet industry companies I write about gives my company legitimacy and allows me to maintain a truly independent market research firm.

But watching companies like VCA Antech Inc. (NASDAQ:WOOF) grow over the last four years sometimes makes me jealous. VCA Antech outperformed Google Inc. (NASDAQ:GOOG) over the last 12 months.

Note the interesting inverse relationship between these two very different companies as they rise. Click on the chart to enlarge.

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Tuesday, April 10, 2007

PetSmart, Inc. Nears All-Time High

PetSmart, Inc. (NASDAQ:PETM) celebrated its 20th anniversary this month by announcing a three cent dividend, payable on May 11, 2007, to shareholders of record at the close of business on April 27, 2007.

The stock is quickly approaching its highest point in 140 years. Dog years, that is.

Another company well-positioned after two decades in the pet business is VCA Antech, which also celebrated its 20th this year, as noted in an earlier post.

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Bad Pet Food Kills Thousands of Cats and Dogs

Two groups presented data confirming a sharp spike in kidney failure from December through March. Dr. Paul Pion of the Veterinary Information Network conducted a survey of veterinarians and estimates 5,000 to 10,000 affected pets, with 1,000 to 2,000 dead. Banfield hospitals saw a 30% rise in kidney failure over the 1 million pets it treated during the same time, mostly in cats, and estimates 39,000 pets to be affected overall. Read the article here

The FDA indicated it will rely on these numbers moving forward.

In a separate development, Pet Connection points to the Marin Independent Journal reporting a top UC Davis lab identified melamine in three Nutro products not on the recall list.

And a Forbes commentary on PR damage control by pet food companies.

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Thursday, April 05, 2007

Senate Hearing on Pet Food Recall

United States Senator Dick Durbin (D-Ill.) announced a Senate oversight hearing on pet food regulations, stressing the need for stronger FDA involvement and better modes of communication between consumers, manufacturers and the government.

Here's the official announcement.

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Three Weeks Later, Recall Still Growing

The pet tragedy continues to unfold three weeks after the first public announcement on March 16. Menu Foods, the first of six companies to recall product, and after several attempts to reassure the public of its safety, today expanded the date range of its original recall.

Sunshine Mills today announced a recall of its products but failed to mention brand names. Sound familiar? Yes, that is exactly what Menu Foods did on March 16, prompting retailers to pull too many products and consumers to panic.

Tracing just one of the supply chains: the tainted wheat gluten came from unknown sources, through a known middleman in China, to a distributer in the US named ChemNutra, then to Menu Foods' two processing plants. There are other routes, possibilities and companies involved. So the difficulty in finding exactly where the contaminant entered the supply chain is obvious.

Listen to a discussion on pet food manufacturing and animal nutrition with a vet, a food safety expert and a pet food maker, from KQED Forum.

The damage to established brands is yet to be determined, but it seems clear from the news that consumer confidence has been shaken.

I can't keep up anymore.

Pet Connection can.

[update: Sunshine Mills recalled brands have been posted on their website and include Wal-Mart's (WMT) Ol' Roy Puppy Biscuit and Peanut Butter Biscuit.]

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Monday, April 02, 2007

Pet Food Recall: More Questions Than Answers

What's next? After finding traces of rat poison and large amounts of a chemical used to make plastic in over 100 brands of dog and cat food, the FDA has not ruled out finding yet more contaminants. And I imagine they will, submitting dog food to such a massive battery of tests.

USA Today has an interesting article on the pet food recall, discussing food inspection standards and recent announcements by the FDA.

To stay updated on the recall go to Pet Connection.

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Sunday, April 01, 2007

Pet Food Recall: Supplier Identified

Thanks to Pet Connection and Itchmo for digging this bone out of the media junkyard.

The FDA issued an import alert that names the supplier of tainted wheat gluten as Xuzhou Anying Biologic Technology.

Itchmo has the details and points out that other companies using this importer should contact the FDA immediately.

The implications from all this bring into question the current standards for food quality, testing, importing and labeling. In a global marketplace, maybe the U.S. needs to tighten screening procedures, using data from the supplier country as the least common denominator in determining standards.

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