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Page 1: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq
Page 2: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

Update on China’s pet food production

and new pet food industry regulations

Jinquan Wang, Ph.D & Associate Professor

Feed Research Institute, Chinese Academy of Agricultural Sciences, Beijing, China.

August 21, 2018 Shanghai

Page 3: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

• The Feed Research Institute (FRI) of CAAS is a national

research institute in China, has more than 10 national

feed scientific technology centers/laboratories. Including

the pet food research center.

Page 4: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

Background:one of the Drafters of:

New《 Pet food Regulations》 2018-06-01

Issued by Ministry of Agriculture and Rural Affairs, China.

Team leader of:

1. Pet Nutrition & Pet Food Processing Technology Research

Team of Feed Research Institute of CAAS.

2. “Survey on the development of China’s pet food industry”(2013-2020)Projects funding by MARA.农业农村部《中国宠物饲料行业发展调研》。

3. “Research on Quality control of the extruding pet food

processing and evaluating standards of the pet food”(2016-

2019) Projects funding by Ministry of Science and

Technology of the China.科技部国家重点研发计划课题《挤压膨化宠物饲料生产质量控制与标准评价技术研究》

Page 5: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

报告内容 Contents

➢2017中国宠物食品(犬、猫粮)行业现状分析Update on China’s pet food industry

➢新版中国宠物饲料(食品)管理法规解读New China 《pet food regulations》2018

Page 6: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

Review:Key Event of Pet Food Industry in 2017

➢ In 2017, there was a phenomenon that capital entered the pet industry. As a representative of such enterprises, New Hope Group participated in the acquisition of Real Pet Food Company in December, which is an Australian pet food enterprise. The transaction amount was as high as Australian Dollar 1 billion (RMB 5 billion Yuan).

➢ In October 26, Neovia, a French company, invested in Tianjin Ken-Sanpo Animal Medicament Health Product Co., Ltd., which started the new mode that foreign-funded enterprises entered Chinese pet food market.

Page 7: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

Neovia was established in France in 1954. Today, they have 8200 employees,business activities include animal feed production and sales, premix, additivesand its value added services,pet care, additives and raw material, aqua-cultureand full rate materials. In 2017, Neovia global sales revenue reach 1.7 BillionEuro, there is high growth in the area it covers, their structure and capacity:

• Has 72 manufacturing plants across 25 countries• Has major businesses in Western Europe, South & Central America and• South East Asia• Focus on creativity, there are 11 R&D centers in 6 countries, 140 professional

scientists, have joint projects with over 40 universities in 17 countries.

In July 2017, after negotiation, via successfully acquiring Neovia, ADM managed to get the exclusive franchise agreement. (Neovia is a supplier providingglobal animal nutrition solutions and value added services)

Page 8: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

➢In July 22, ePet.com (ePet Mall) announced that they just received Series B funding of USD 50 million from IDG Capital.

➢In Sep 20, Grass Green Group of New Hope Group set up Mao Ning Holdings

Page 9: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

There are highest number of Pet Food companies successfully

go public listed in 2017

➢ Petpal Pet Nutrition Technology Co. Ltd(CPET, Stock code 300673)

was listed in Shenzhen Stock Exchange in July 11, 2017, major

business is export of pet treats (chewing gum treats),as of end 2017,

market value 3.4 billion Yuan.

➢ Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market,

was listed in US Nasdaq in Sep 21, major business is export of pet

treats, as of end 2017, market value 63.1 million Yuan

➢ The first public listed China Pet Food company: Shangdong Luscious

Pet Food Co. Ltd, stock code 832419, 2015.

Page 10: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

➢ Yantai China Pet Foods Co.,Ltd was publicly listed on main board in July 2017, major businesses include pet treats (canned, ifex, biscuits, treats, etc), as of end of 2017, market value 3.547 Billion yuan.

➢ Acquired 100% share of New Zealand ZEAL in June 28, 2018

Page 11: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

In Oct 20, 2016, Jiangsu ZhongHeng Pet Articles Joint-Stock Co. Ltd submitted pre-listing tutorial to Jiangsu Securities Regulatory Commission.In Nov 2016, Shanghai Bridge Petcare signed a tutorial agreement with CICC (China International Capital Corp), Hillhouse Capital Group.In Jan 2017, NEEQ listed enterprise Hangzhou TianYuan Pet Products Factory started to receive pre-listed tutoring from Haitong Securities.In July 11, 2017, NEEQ listed enterprise Tianjin YiYi Hygiene Products Co Ltd filed pre-listed tutorial registration materials to Tianjin Securities Regulatory Commission, presently taking pre-listed advice from Huarong Securities.In Aug 24, 2017, U-Play Corporation filed pre-listed tutorial registration materials to Anhui Securities Regulatory Commission, presently taking pre-listed advice from South West Securities.

Page 12: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

➢ Both in terms of capacity and no. of establishment of new enterprises reach the record high

➢ There are more than 30 sets of pet feed equipment installed in China in 2017 and the capacity of single equipment wasabove 2.5t/h, mainly for equipment update of existing enterprises and increase of production line, accounting for above 60%.

Page 13: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

➢ Imported pet feed

➢ International brands register with MARA (Ministry of Agriculture & Rural Affairs) and file with AQSIQ (General Administration of Quality Supervision, Inspection & Quarantine) reach record high

➢ In last 5 years, there are 408 imported pet feed products registered with MARA (Ministry of Agriculture & Rural Affairs)

➢ According to statistics, in 2017, imported brands (including smuggling) from various channels entered into China, sales volume reached 30,000-40,000 tons, sales amount about 6-8 hundred million Yuan.

Page 14: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

2013-17 Ministry of Agriculture Imported Pet Feed Registration Number

Page 15: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

AQSIQ Listing(Last update: Dec 22, 2017)

Product Qty

America | Europe | Oceanic | Asia

Ministry of Agriculture Imported Pet Feed Registration breakdown by Geographic

Ministry of Agriculture Imported Pet Feed Registration breakdown by Source Origin

No. of manufacturers

America | Europe | Oceanic | Asia

Page 16: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

➢ Cross-border e-commerce

Some foreign pet food manufacturers enter into the Chinese

Market via B to C channels; foreign pet food has price and

brand advantages and superiority, this has an impact on

domestic pet food product.

Guangzhou Namshan Free Trade Zone cross-bordere-Commerce Pet Food Area

Page 17: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

1. China Pet Food(dog, cat food)Industry Research Report 2017

Update on China’s pet food production

Page 18: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

Updates in China

• According to the survey result, China Pet food manufacturing

output continues to a high growth in 2017. Full year dog and

cat food total output reaches about 1.1 million tons, a 22.3%

increase comparing to 900,000 tons in 2016, the increase

slowed down. Production output reached about 10 Billion

Yuan, end market sales volume reached 35-39 billion Yuan, a

growth of 30%.

• In 2017, market sales revenue growth is above 30% in 2017,

higher than the output growth, reason maybe due to rise of

product price due to increase of raw material price.

Page 19: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

Pet food output (Million tons)

Growth rate %

Page 20: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

2017 China Pet Feed Major Production By Geographic Location

Shandong & Others 13 11%

Hebei Region

45 41%

Shanghai, Jiangsu, Zhejiang region 28 26%

Beijing, Tianjin

Region

24 22%

Page 21: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

New Trend of Pet Food Production LocationShangdong gradually becomes the new base for China pet food production, has advantages of raw

materials availability and logistics support!

GambolPet, China Pet Foods, Luscious, Shangdong Pet Products Co. Ltd, Nory Pet Food, Haid Pet Care……..

Occupies about 1/3 of country-wide poultry slaughtering capacity, at 2.5 billion heads

Page 22: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

➢ Hebei HuaXing Pet Food invested 500 million Yuan into

modernized new production plant, started operations in 2017,

they use Swiss Buhler processing equipment and doubled the

productivity, annual production capacity at 180,000 tons, ranked

No. 1 as the biggest processing facility in China! (Automated

packaging production line)

➢ Hubei Old Ghost Group invested 400 Million Yuan for fish bait

and pet food production facilities and started operations. In 2017

Pet Fair Asia, WA! Brand pet food was officially launched.

Page 23: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

2017 China Top 15 Domestic Pet Dog/Cat food brand of

sales over 100M Yuan!

Output Vol. / Million tons Output Value / Hundred Million Yuan

Page 24: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

• China Pet Food(Staple food)Industry

Development Trend 2010-2020

In China, pets fed by dried food is less than 25%, even in the most well developed cities like Shanghai, Beijing and Guangzhou, the dried pet food feeding is just about 30%.

0

50

100

150

200

250

300

2010 2012 2014 2016 2018 2020

20 25 30 40 50 70

91 118

154

200

260

Volume(Million tons)

Page 25: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

1. Pet dogs/cats market product type development& trend survey

➢ Conduct of the Survey is supported by MARA (Ministry of Agriculture & Rural Affairs

➢ Research respondents cover Beijing, Tianjin, Shanghai, Hangzhou, Shenzhen, Guangzhou, Harbin, Shenyang, Jinan, Tsingdao, Xiamen, Fuzhou, Chengdu, Chongqin, 14 big and medium sized cities’pet stores, pet clinics and hyper-mart, total 420 samples (randomly distributed)

Page 26: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

全国14个大中城市的宠物店宠物医院大型超市

2017 China Pet Food survey city distribution map

Covered 14

big & medium

sized cities

pet stores, pet

clinics and

hyper-mart

Page 27: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

China 14 cities pet stores dog food brands market share

MarsNature Bridge

OdinLiLangMy Foodie

Pure & NatureKitchen Flavor

SanpoProPlan

Pedigree

Page 28: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

China 14 cities pet stores cat food brands market share

My FoodieLiLangNory

SanpoAier

Whiskers

PetMaster

OdinPedigreeMars

Page 29: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

China 14 cities Pet Food Taste Market share

Dog food Cat Food

ChickenBeefFishOther Flavor

Page 30: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

China 14 cities Pet Food Type Market share

Dog food Cat Food

Grain-FreeFresh meatNaturalPrescriptedFunctionalOrdinary food

Page 31: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

Pet dogs & cats staple food trend➢2015

Naturalfood,fresh meat

➢2016 Grain-free, fresh meat

➢2017 Grain-free, fresh meat, wild taste, functional, natural plants

➢2018 Grain Free!

Page 32: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

➢ Pet Food & Nutrition Testing Research Base,Chinese Academy of Agricultural Science

➢ They have 30 Kennels and 10 cat houses; with over 700 pet dogs of over 20 breeds and over 200 pet cats of over 10 breeds. This is the biggest China pet dogs/cats’food and nutrition professional testing research base.

➢ Staff strength: professional researchers including 3 doctorate and 10 post-graduate/master degree holders.

Page 33: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq
Page 34: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

➢ Meal Enhancer (Palatability Test)

➢ Pet food nutritious additives functional test➢ Palatability of different pet food raw materials, digestive test➢ Nutrition value test of different pet food formula➢ Prescripted food, functional food and weight-reduction

formula’s research & development➢ New pet food ingredient selection and evaluation on

nutrition value➢ Pet dogs and cats food quality inspection and evaluation of

feeding effectiveness ➢ Pet food safety evaluation, MARA (Ministry of Agriculture &

Rural Affairs)➢ Pet food ingredient and basic nutrition database set-up

Page 35: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

二、新版中国宠物饲料(食品)管理法规解读

Latest Edition

China Pet Feed 《 Pet Food 》Administrative

Regulations 2018

Page 36: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

中华人民共和国农业农村部公告

第20号Ministry of Agriculture and Rural Affairs Bulletin

No. 20

《宠物饲料管理法规》

本办法自2018年6月1日起施行

“Pet Feed Administrative Regulations”

Effective from June 1, 2018

Page 37: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

法规主要内容 Major Regulations Details:

1. 宠物饲料管理办法

Pet food admin regulations

2. 宠物饲料生产企业许可条件

Requirments of the licensing of pet food manufacturer

3. 宠物饲料标签规定

Pet food labeling regulations

4. 宠物饲料卫生规定

Pet food hygiene regulations

5. 宠物配合饲料生产许可申报材料要求

Pet compound food production license application & requirement

6. 宠物添加剂预混合饲料生产许可申报材料要求

Pet additive premix food production license application & requirement

Page 38: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

1. Pet Food Admin Regulations

Definition: Pet feed is processed food to be directly consumed by pets, including pet feed, additives premix food and other pet food.

Types:

➢ Pet compound food

➢ Pet additive premix food

➢ Other pet foods (Pet snacks)

Page 39: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

Explanation:

Main reason for Pet food classification is to abide with the PetfoodRegulations

1. Characteristics:direct consumption

➢ Pet compound food = full nutrition pet food = full nutrition dog (cat)

food

➢ Pet Additive pre-mixed food = supplemental pet food = nutritional

supplement

➢ Other pet feeds = pet snacks

2. Does not classify by packaging

Page 40: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

Explanation:

3. ”Production Permit” – Permitted details:

①Pet Compound food ②Pet Additive Pre-mix Food

Other pet feeds (pet snacks) do not require permission!

4. Provincial Level Feed Admin Office to approve and issue

license

Pet Additive Pre-mix Food does not need approval number!

Page 41: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

Transitional Period:

– For enterprises that already have the approved Production

Permit and Import Registration Permit: can continue to use

the certification document till expiry, BUT HAVE TO

COMPLY WITH THE LABELING REGULATION SEP 1, 2019 /

HYGIENE STANDARD REGULATION JAN 1, 2019

– For ingredients used in the pet food that is not applicable

to pet food related regulation, follow the rule of pet

additive & remix food , Pet Use Remix

– Pet additive & remix food = Pet Health product, direct

consumption

Page 42: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

– Regulation 14: Overseas pet food manufacturing companies exporting pet compound food, pet additive pre-mix food, should appoint their China local office or their China local representatives to apply for registration from the Agriculture Administrative Department of the State Council of China and obtail the “Import Registration Permit”

– Explanation:Other Pet Food (tweats and snacks) do not to register with MARA (Ministry of Agriculture & Rural Affairs) !

Page 43: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

Regulation 15: For exporting pet food to China, should be packaged with Chinese labeling as required by“Pet Food Labeling Regulation”, product hygiene labeling should abide with the “Pet Food Hygiene Regulation”; pet compound food, pet additive pre-mix food quality and quantity should fit with the requirement of the“Import Registration Record Standard”

Understanding: Presently, to register imported pet food,

need to follow the new edition of “Pet Food Labeling

Regulation”, don’t wait till Sep 1, 2019. “Pet Food

Hygiene Regulation” will take effect from Jan 1, 2019.

Page 44: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

Regulation 12: Online Pet food sales 3rd party platform provider, need to require Pet Food business providers to use “Real Name Registration” to use their platform, make sure that the business providers to seriously fulfill their responsiblities and obligations to Pet Food Product Quality Safety Management, to protect and ensure that online sales of pet food product to comply with the requirement of the regulations.

Temporarily

cease of online

sales due to

comply with

MARA

requirement

Page 45: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

2. Conditions for Pet Food Manufacturing Enterprise Permit

– Product Type:

Solid pet compound food, solid pet additive pre-mix food,

Semi-solid pet compound food, semi-solid pet additive pre-

mix food

Liquid pet compound food, liquid pet additive pre-mix food

production requirement, there is no requirement on

production equipment capability!

Page 46: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

3. Pet food Labeling RegulationNo.4: Pet food product label should be displayed in easily

visible position, marked “This product complies with Pet

Food Hygiene Requirement”( 本产品符合宠物饲料卫生规

定”) , use stickers or printed style to attach “Product Quality

Test Passed Certification”.

No. 5: Product name should be displayed in the label with

generic name. Generic name should use consistent font type,

font size and font color, not allow to emphasize any partial

content. Product name can be displayed together with the

generic name, but must be AFTER or BELOW the generic name,

font size cannot be bigger than generic name.

Page 47: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

Label Content:

①Product Name ② Ingredient composition ③ Product composition

analysis & guarantee value ④ Net weight ⑤ Storage condition ⑥

Instruction for use ⑦ Precaution ⑧ Manufactured date, expiry date

⑨ Production company name & address ⑩ Permit Cert no. and

product standard info, etc ⑩ Product inspection passed certification

Smart display position :This product complies with Pet Food Hygiene

Regulation, do not feed this to ruminents, (except animal origin, milk

and milk product)

Imported Pet product: In addition to above, display country of origin or

district name in Chinese, mark “Import Registration Cert Number”

and “Imported Product Review Inspection Report Number”

3. Pet Food Labeling Regulation

Page 48: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

Generic Naming

Pet Compound Food:(Chinese naming)

“Pet Compound food”(宠物配合饲料),”Pet full nutrition food”(宠物全价饲料)、”Full-nutrition Pet Food”(全价宠物食品)、”Full Nutrition (Dog/Cat food) ”(全价(犬、猫粮))、Full Nutrition Teddy food”(全价泰迪粮) etc.,

Prescriped food naming“处方粮” :Under designated physical condition of pets, pathological condition compound food, must indicate ingredient, mark “Please use under Veterinary advice”

Pet Additive Pre-mix food: (as below Chinese naming)

“Pet additive pre-mix food”(宠物添加剂预混合饲料), “Supplementary Pet food”(补充性宠物食品), “Pet Nutrition Supplement” (宠物营养补充剂)

Other Pet food:”Pet snacks”(宠物零食) ,can label as chew gum (咬胶)、teething stick (磨牙棒), etc

Besides, need to label the animal type that is suitable to consume and their life stage

3. Pet Food Labeling Regulation

Page 49: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

Generic Naming

Prescribed food:Pet designated physical or pathological condition’s full nutrition food, must prove ingredient, label “Please use under licensed veterinary instruction!”

Refer to appendix 5 to label products applicable to physical or pathological use and major nutrition characteristics;

4、reduce urate stone

Example:this product used to reduce dogs and cats urate stone formation possibility, the purine and protein in the product has been adjusted scientifically.

If is not covered in Appendix 5, can label as well and

provide relevant verification information.

3. Pet Food Labeling Regulation

Page 50: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

Ingredients Formation:

① Ingredients formation :must meet the requirement of “Pet Food Ingredients Directory”

Accending order additive %, Decending order for animal hydrolysate, label as “pet food compound additives”(宠物饲料复合调味料) or Taste Enhancer”(口味增强剂)

②Additive formation :must meet the requirement of “ pet Food Additive Directory”

Anti-oxidants, colorants, seasoning or attractants’additivescan be labeled Category Name (类别名称).

Variety Name (品种名称) ≠ Category Name (类别名称),cannot mixed-up

3. Pet Food Labeling Regulation

Page 51: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

3. Pet Food Labeling RegulationITEM REQUIREMENT LABELING

Crude Protein Minimum value ≥,equal or not lesser than

Crude Fat Minimum value: for product claiming of ≥,equal or not lesser than;

low fat, should label the maximum value For low-fat product, should label:

Min value≤Crude fat≤Max value, or Crude

fat not lesser than,and not more than

Crude Fiber Maximum Value ≤,equal or not greater than

Moisture Maximum Value ≤,equal or not greater than

Coarse ash Maximum Value ≤,equal or not greater than

Calsium Minimum value ≥,equal or not lesser than

Total Phosphorus Minimum value ≥,equal or not lesser than

Water soluble Chloride Minimum value ≥,equal or not lesser than

(Cl) Minimum value ≥,equal or not lesser than

Lysine, for dog food Minimum value ≥,equal or not lesser than

Taurine, for cat food Minimum value ≥,equal or not lesser than

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Analysis Guarantee Value:

① Pet Compound Food

Besides the basic items, designated physical, pathological

nutrition needs, can put special labeling, e.g. omega-3,

linolenic acid, etc

② Pet Additive Pre-mix Food

Moisture, nutritious additives

③ Other Pet Food

Moisture, can based on needs to label other ingredients

3. Pet Food Labeling Regulation

Page 53: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

Multiple packing:

① Inner packing not selling on its own:Outer packing labeling as required by the regulation, inner packing at least have to indicate product name, expiry date and net weight

② Inner pack to sell on its own:Both Inner and outer pack must label as per the requirement of the regulation

③ Inner pack sell on its own, outer pack is transparent or use for protection during transportation

Giveaway:

In addition to label as per the requirement of the regulation, need to indicate “Free Sample”(免费样品), “Giveaway”(赠品), “Not For Sell”(非卖品) or “Tester”(试用装) etc

Contract processing:In addition to label as per requirement, need to indicate name of the contract manufacturer company name, registered address and production permit number

GMO:need to comply with “Agricultural Genetically Modified Organism (GMO) Labeling Administrative Rule” (农业转基因生物标识管理办法)

3. Pet Food Labeling Regulation

Page 54: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

Principle:

Pet food labeling can make CLAIMS on ingredients, function and

characteristics,all the claims should have proof, proof doc includes

published materials, textbook, formula formation, inspection data or

testing reports, etc.

Forbidden to promote pet food to be able to prevent or treat pet

diseases。For non-disease problem such as against pets hair ball /

tartar accumulation, can use“preventive”wordings in labeling

When claim for ingredients, claim’s content should place adjacent to

product name, use same font type and font color, font size cannot be

bigger than product name, cannot be in any form to exaggerate or

emphasize any part of the content

3. Pet Food Labeling Regulation

Page 55: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

Claim – Ingredients Claim:

①“Chicken”formula:chicken content ≧ 26%;

“chicken rice”formula: chicken content ≧ 26%,rice ≧3%;

② Containing “chicken”formula: chicken content ≧14%;

containing “chicken rice” formula: chicken content ≧14%,

rice ≧ 3%;

③ Containing“chicken”: chicken content ≧ 4%;

Containing“chicken rice”: chicken content ≧ 4%,rice ≧ 3%;

3. Pet Food Labeling Regulation

Page 56: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

Claim – Ingredients claim:

④ Flavor claim:beef flavor, chicken flavor, fish flavor, use of flavoring

agent

⑤ add-on claim:cheese added, advocado added, spirulina added

⑥ nutrient and additive claim: contains VE%,contains chelated iron %,

contains chondroitin sulfate %, contains yucca extract %;

⑦“High” “increase”“low”,should be 15% above relative to this

company’s product

⑧ Non“XX”No“XX”,only restrict to not containing“pet food

ingredient and additives”.

“Grain-free”“non-gluten”,“NO clenbuter”“NO hormone”

3. Pet Food Labeling Regulation

Page 57: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

Claim – Ingredient claim:“Natural”

① All pet food ingredient and additives need to be UNPROCESSED, NON-CHEMICAL PROCESSED, OR ONLY UNDERGONE PHYSICAL PROCESSED, THERMAL PROCESSED, EXTRACTED, PURIFIED, HYDROLYSED, ENZYMATIC HYDROLYSED, FREMENTED or SMOKED, etc, can use “Natural”, “Natural Food”or similar wordings.

② If added chemically synthesized nutrients, can also claim as “Natural” or “Natural Pet Food”, but need to use wording “Natural, with XX added”

Claim“Freshly…”, the“Fresh”:Certain ingredient, except refrigerated, should be UNCOOKED, DRIED, FREEZE-DRIED, DYDROLYSED, or similarly being processed, and should not contain sodium chloride, preservatives or other pet food additives.

3. Pet Food Labeling Regulation

Page 58: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

Moisture recovery:

For dehydrated pet food ingredient, can claim the

product content as per after moisture recovery. If to use

moisture recovery, other ingredients should be

recovered at the same time, to execute as per appendix

No. 7

Fruits and vegetables anhydrates(not including the by-

products made from fruits and vegetables skin or

residues ):90.0%;

Meat, fish anhydrates(Only includes edible poultry

/animal tissues):75.0%;

Cereals:15.0%

3. Pet Food Labeling Regulation

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• Noted: 1. In above example, original recipe of 24.2kg chicken powder, after moisture recovery will have 87.2 kg chicken meat, about 46.4% of the recipe after recovery, this can claim as “Chicken recipe”; original formula of 2.0kg of carrot powder, after moisture recovery will have 18.4kg carrot, about 9.8% of formula after recovery, can claim as “contains carrot”; original recipe of 1.8kg beef powder, after moisture recovery will get 6.4kg of beef, about 3.4% of the recipe after recovery, can claim as “beef taste”.

Raw MaterialRecipe mix

(kg)

Moisture

content in raw

material %

Dried content

in recipe (kg)

Moisture

recovery

standard %

Recipe structure

after recovery

(kg)

Recipe

formation

proportion

after

recovery%

corn 66 10 59.4 15 69.9 37.2

chicken

powder24.2 10 21.8 75 87.2 46.4

beef powder 1.8 11.1 1.6 75 6.4 3.4

carrot powder 2 8 1.8 90 18.4 9.8

additive pre-

mix4 4 4 2.1

Fat 2 2 2 1.1

Total 100 187.9 100

Page 60: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

4. Pet Food Hygiene Regulation4. Agriculture Admin Department of the State Council and

Provincial People’s Government Feed Admin Department

will act according to their duty and power, supervision and

random checking, will announce a list of bad records’pet

food production enterprises, business owners and 3rd party

online trading platforms. list.

5. Pet food production enterprises, business owners, will be

penalized according to Rule No. 46 of“Pet food & Pet food

additives Admin Regulation”if the pet food produced does

not comply with the standard of the Hygiene Regulation

6. This regulation took effect from June 1, 2018.

Page 61: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

TypeSerialNo.

HygieneIndicator

Product Name Limitation① Testing Method

Remarks

Inorganic pollutant

& nitrogen compound

1Florine,F,

mg/kg

Pet compound food ≤150

GB/T 13083

Pet Additive pre-mix food, other

pet food

≤500

(Phosphorus

content ≤4%)

•Phosphorus

content in

this chart is

based on

88% dried

material

content

≤125/1%Phosph

orus content

(Phosphorus

content >4%)②

2

Cadmium

(Cd),mg/kg

Pet compound food, pet

additive pre-mix food, other pet

food

≤2 GB/T 13082 —

3

Chromium

(Cr),mg/kg

Pet compound food, pet

additive pre-mix food, other pet

food

≤5

GB/T 13088-

2006

(Atomic

Absorption

Spectrometry)

4

Mercury

(Hg),mg/kg

Pet compound food, pet

additive pre-mix food, other pet

food

≤0.3 GB/T 13081 —

Page 62: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

TypeSerialNo.

HygieneIndicator

Product Name Limitation① Testing Method

Remarks

Inorganic pollutant &

nitrogen compound

5Lead

(Pb),mg/kg

Pet compound food ≤5GB/T 13080 --

Pet additive pre-mix food, other pet food ≤10

6Total

Arsenic,mg/kg

Pet compound food, pet additive pre-mix food, other pet food that contain aquatic animal and its products or algae and its products

≤10

Total Arsenic:GB/T 13079Inorganic

Arsenic:GB/T 23372

Inorganic Arsenic not exceed 2 mg/kg

Pet compound food that does not contain aquatic animal and its products or algae and its product

≤2

—Pet additive pre-mix food, other pet food that does not contain aquatic animal and its products or algae and its product

≤4

7Melamine,mg/kg

Pet compound food, pet additive pre-mix food, other pet food ≤2.5 NY/T 1372

Canned pet food of

moisture over 60% need to base on its

original form

8

Nitrite(NaNO2

),mg/kg

Compound pet food of moisture content less than 14% ≤15 GB/T 13085 —

Page 63: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

TypeSerialNo.

HygieneIndicator

Product Name Limitation① Testing Method Remarks

Mycotoxin

9Aflatoxin

B1,μg/kg

Pet compound food, pet additive pre-mix food, other pet food ≤10

NY/T 2071(Applicable for pet

food of moisture content <60%);

GB/T 30955(Applicable for pet food

content ≥60%)

10FumonisinB1+B2 ,mg/kg

Pet compound food, pet additive pre-mix food, other pet food

≤5 NY/T 1970 —

11DON,

vomitoxin,mg/kg

Pet compound food(cat food)、Pet additive pre-mix food(cat food)、Other pet food(catfood)

≤5

GB/T 30956 —Pet compound food(dog food)、Pet additive pre-mix food(dog food)、Other pet food(dog food )

≤2

Page 64: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

Mycotoxin

12Zearalenone,

mg/kg

Pet compound food(infancy, pregnancy, lactation), Pet additive pre-mix food(infancy, pregnancy, lactation)、Other pet food(infancy, pregnancy, lactation)

≤0.15

NY/T 2071 —

Pet compound food(adult stage)、Pet additive pre-mix food (adult stage)、Other petfood (adult stage)

≤0.25

13OchratoxinA,

mg/kg

Pet compound food, pet additive pre-mix food, other pet food

≤0.01 GB/T 30957 —

14T-2 & HT-2,

mg/kg

Pet compound food(cat food)、Pet additive pre-mix food(cat food)、Other pet food(catfood)

≤0.05 SN/T 3136 —

Natural plant toxin

15Cyanide

(HCN),mg/kg

Pet compound food, pet additive pre-mix food, other pet food

≤50 GB/T 13084 —

Page 65: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

Type Serial No. Hygiene Indicator Product Name Limitation① Testing Method Remarks

17

Polychlorinated biphenyl(Total of PCB28、PCB52、

PCB101、PCB138、PCB153、

PCB180),µg/kg

Pet compound food, pet additive pre-mix food, other pet food ≤40 GB 5009.190 —

18666(HCH),mg/kg

α-HCH

Pet compound food, pet additive pre-mix food, other pet food

≤0.02

GB/T 13090 —-

HCH

Pet compound food, pet additive pre-mix food, other pet food

≤0.01

-HCH

Pet compound food, pet additive pre-mix food, other pet food

≤0.2

19Hexachlorobenzen

e(HCB),mg/kg

Pet compound food, pet additive pre-mix food, other pet food

≤0.01 SN/T 0127 —

Page 66: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

Microbial Pollutant

20Salmonella,

(25g)

Pet compound food(except canned food)

Should not have in test

result

GB/T 13091 —Pet additive pre-mix food(except canned food)、Other pet food(exceptcanned food)

Should not have in test

result

21Micro

organism

Pet compound food(canned food)、Pet additive pre-mix food(canned food)、Otherpet food(canned food)

Commercially sterilized

GB 4789.26 —

Remarks:①Limitation as stated in the chart, besides specified, is based on 88% dried material (except microbial pollutant index) ②When phosphorus content is >4% in Pet additive pre-mix pet food and other pet food, every 1% increase in phosphorus, the limitation of fluorine content in 500mg/kg can increase by 125mg/kg. E.g. Pet additive pre-mix food, other pet food phosphorus content is 5%,fluorine limitation is 625mg/kg;if phosphorus content is 5.5%,fluorine limitation comparatively increases to 687.5mg/kg。

Page 67: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

IMPORTED PET FOOD MARA (Ministry of Agriculture & Rural Affiars)

LICENSE REGISTRATION PROCESS

The registration procedure and related expenses as followings:

Registration Procedure (ALL ingredients and/or active composition of the product must be on the list of the approved feed additives issued by Chinese MARA.)

Firstly, the applicant prepares the registration documents according to the requirements of Chinese MARA.

Secondly, MARA will fax the Acceptance Letter to the applicant if the documents passed the evaluation. The applicant to submit the Acceptance letter with the samples under three batches to Chinese Feed Control Inspection Institute to undergo the test, the inspection is free. The test should be done within 3 months.

Lastly, MARA will issue the Registered License if the samples pass the test. This procedure will take 20 working days. If the samples do not qualify, the applicant can apply again after 1 year.

Page 68: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

The Requirements for the New Registration of Feed and feed Additives

Items Introduction

1 Application

FormChinese Agent should fill in this form on website of Chinese MARA,English with Chinese, and get the final version with QR Code after

Chinese MARA confirmed the form. Both the manufacture and the

Chinese Agent must sign and seal on this form.

2 License of

Chinese

Agent

A sealed copy of business license of the Chinese Agent should be

provided.

3 Authorization The agent of China should submit an Authorization letter in

Chinese to MARA, confirming that the agent is consigned and

authorized by the manufacturer to handle the import registration

procedure. The agent should be a registered company in China.

This document should be notarized by a third party in the origin

country.

Page 69: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

4OfficialCertificates

Certificates evidencing

the registered product

and its main

ingredients are

allowed for production

and use as feed or

feed additive in thecountry of origin.

EU: copy of the ingredients on the list of Approved Feed

Additives by EC No 1831

USA: copy of the ingredients on the list of Approved Feed andFeed Additives by AAFCO

A copy of Manufacturelicense

It should be notarized by third party and confirmed by ChineseEmbassy in the origin country.

Certificate of Free Sale Name of the product, name and address of the manufacture must be

shown on this file and it need to be confirmed by Chinese Embassy.

The manufacture, use, sale of the product in the origin country is

free and no other limitation.

This file should be confirmed by Chinese Embassy in the origincountry.

5 Physical and chemical characters Including sensory properties (color, flavor, existence state, etc.) and

physical and chemical characters (such as boiling point, melting

point, density, refractive index, in a common solvent solubility, light,

or heat stability, etc.).

Page 70: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

6 Composition

and ingredients

Raw material composition or active ingredients of the product. The names of

raw materials shall be as detailed as possible, and the chemical structural

formulas shall be provided for chemical structures, if any.

1. Formula: The content of each ingredient must be provided.

2. GMO statement: For the product made of the plant and/or vegetable

ingredient and the fermentation product, GMO Statement is needed, and this file

needs be notarized by third party in the origin country.

3. Identification Certificate: For the fermentation product, the manufacture

should provide the Identification Certificate of Strain used in the product.

7 Manufacture

description

and flow

chart

Manufacture flow chart for the product and details description. The flow chart

shall reflect critical steps of the production process. The text description shall

reflect the technical conditions and methods in the flow, and simply indicate the

raw materials and equipment used in the production as well as the steps in the

production process.

Page 71: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

8 Specification

(or Quality

standard), test

method, and

test reports

1. Quality standard or specification: The quality standard for the product shallbe consistent with the quality specification approved, and analysis methodacknowledged, by relevant management authority in the country of origin.The quality standard shall include the contents of various active ingredientsand the control indicators for various hazardous substances in the product.2. Analysis method: The standard code shall be specified if the internationalstandards such as ISO/IEC and AOAC are adopted, and the detailedinspection operating procedure shall be provided if other inspection methodsare used.3. Analysis reports: Analysis reports on the samples under three differentbatch numbers shall be provided for each product. The product must be inshelf life.4. Analysis report for Dioxin: For some products include the mineralingredient such as bentonite, silicon dioxide or/and silicic acid.

9 Label and the

photos of the

package

including front

and back

9.1 English Label9.2 Chinese Label: it is provided by Nadine.9.3 Photos of the packaging,9.4 Manual: This file should include the information such as the function,composition, quality standard, usage, storage, net weight and shelf life, etc.

Page 72: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

10 Application and

Usage/dosage

Specify in detail the scope of applicable animals, the additive amount fordifferent animal feeds and notes on usage.

11 Package,

storage and

shelf life

11.1 Packaging specifications: Shall specify the packing materials and unit netweight of the product. Please cut the corner of the packaging bag and provideit with the application documents.11.2 Notes on storage: Include the storage place, storage condition andstorage method.11.3 Shelf life: Shall indicate the production date and shelf life of the product.

All English files except the official certificates must be printed on the papers with letterhead of the manufacturer, sign and seal on each page. All Chinese translations must be sealed by Chinese Agent.Samples: The manufacturer should provide the samples under three numbered batches, two bags per batch number, and 400g per bag. Three batches mean that the manufacture dates of the samples should be different.

Register Consulting email: [email protected]

Page 73: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

Imported Pet Food Management:

Need to obtain “Import Pet Food Registered License”issued by MARA, valid for 5 years

Page 74: Update on China s pet food production and new pet food industry … · 2019-09-01  · Qingdao Tiandihui Foodstuffs Co.,Ltd entered the US capital market, was listed in US Nasdaq

Contact: Please scan my Wechat QR Code