EUKANUBA says it is ‘business as usual’ for its UK dog-showing interests despite the announcement that its owner, Procter & Gamble (P&G), is to quit the pet care business.
Its exit has begun with Mars’ acquisition of Eukanuba, Iams and Natura brands for $2.9 billion ‘in cash’. The US conglomerate is buying the rights to the brands in North America, Latin America and other selected countries which account for 80 per cent of P&G’s total global pet food sales.
Although this sale will not affect the UK and Europe, P&G has made it clear it wants to divest itself of the European arms of these brands too.
Although all Eukanuba’s plans and commitments to the world of dogs will be fulfilled this year it is not known what will happen to the American Kennel Club/Eukanuba National Challenge and Eukanuba World Challenge. The company also sponsors Crufts.
UK national breeder manager Mike Bloxsome told DOG WORLD that meetings were being held to discuss the World Challenge so that clarification could be given on this.
“As far as the UK – and Europe – is concerned it is exactly as it was as of yesterday before the sale was announced,” he said. “We’re doing all the shows again in this calendar year and all deals we are doing with people we are still doing. We are still partners with the Kennel Club.
“I don’t know what will happen about the Eukanuba World Challenge; that’s something we will have to discuss. The champion stakes is still happening – that’s all done and the hotel booked for the final, and it will still be a great event – but whether the dog will go to the US will have to be clarified because by December it will be owned by a different company.”
Mr Bloxsome said P&G was looking for a buyer for the European arm of the company and that there was no reason why the new owner would not allow Eukanuba to maintain its interests in the showing world.
“I’ve been with this company for 23 years and this is the fourth time the business has been sold. And every time Eukanuba has continued to commit to supporting showing and the show world. Since I started, Eukanuba has always supported breeders and the show world so there’s no reason to think that philosophy will change. That is how the brand was created.
“We’re doing more shows than ever this year. Everything is still the same and will be for the foreseeable future.”
P&G said the sale advanced its ‘corporate strategy of focusing on core categories and brands where our company can sustainably create the most value for shareholders’.
“We will exit the pet care business via geographical phases,” its statement read. “The first phase of sale will be the sale of our North America and South America business as well as selected markets to Mars subject to regulatory approvals.
“Please note UK and Ireland will not be part of this sale to Mars and therefore it is business as usual for us. There will be no change to your P&G contacts and we will continue to invest in our brand business plans including our recent announcement of our strategic co-operation with Novartis Animal Health as we re-enter the Vet Channel with our Eukanuba Veterinary diets.”
P&G, like many of its rival consumer goods goliaths, is attempting to streamline its business, and has announced plans to cut $10bn of costs in five years.
It has said it may sell its European pet care business to different buyers. Analysts are saying that private equity could be interested, or smaller independent players.
P&G is the fourth-biggest player in the pet food market, but a long way behind Mars and Nestlé which together control almost half of the business.
Chairman, president and chief executive of P&G Alan Lafley said: “Exiting pet care is an important step in our strategy to focus P&G’s portfolio on the core businesses where we can create the most value for consumers and shareowners. The transaction creates value for P&G shareowners, and we are confident that the business will thrive at Mars, a leading company in pet care.”
The three new brands will be added to Mars’ existing pet food portfolio which includes Whiskas and Pedigree Chum. The deal is the biggest in five years for the Mars bar maker since its $23 billion Wrigleys gum deal in ’08.
Crufts chairman Gerald King said the KC would continue to work with Eukanuba on existing programmes as part of its relationship as ‘Partners in Pet Nutrition’ and in their role as sponsors of Crufts and Discover Dogs.
“Sponsorship of Crufts 2015 will be reviewed as planned, but the KC is keen to build on the huge success of this year’s show which had near record-breaking attendance and was broadcast on Channel 4 and More 4,” he said.
“We look forward to working with Eukanuba in the future and all our valued Crufts sponsors with whom we work in partnership to deliver such a great event.”