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| Visitors and their animal companions look around the K-Pet Fair Seoul, April 12, 2021, at SETEC, central Seoul. Yonhap |
By Lee Hae-rin
It's no exaggeration to say that a growing number of Koreans consider their pets to be an integral part of their family nowadays. In fact, increasingly, people view pets as being just as important to them as their own children.
So one central question is, then, should the tax authorities as well as pet product sellers have to follow the same line of thinking? It's an issue up for debate as, in most cases, pet-related costs are currently considered "personal expenses," which means that pet owners are unable to claim pets as "legal dependents" when filing their taxes.
Given Koreans' preferences around tax policies and the growth potential for pet-related product sales, tax authorities ought to consider expanding the tax deductions that pet owners can claim for their pets and other related expenses. Indeed, there could be a kind of tax break offered, or more assistance for pet owners to get better access to pet-related products at more competitive prices.
Nine out of 10 pet owners in Korea consider their animal companions to be family members, according to the "Korea Pet Report 2021," by the KB Financial Institute of Management. This tendency to associate animal companions with human relations is also known as "pet humanization," and is prominent especially among younger people in their 20s and 30s.
Aside from tax concerns, the primary complaint of consumers here is that sellers and food producers charge too much for pet-related products.
"I am willing to spend as much as it costs for the sake of my cat's health and well-being. However I often feel that I am getting overcharged," said Kwon Yoo-jeong, 29, a cat owner.
According to market researchers, the small, freeze-dried fish called capelin, for example, is sold at 9 won per gram in Naver's shopping section for human consumption. As a dog and cat treat, however, the price is 10 times higher. Similarly, dried pollack cubes are sold at 95 won per gram for making soup, but are 1.3 times more expensive when marketed as pet food.
Non-food products are no exception. The "for pet use" label on a type of sanitizer, for example, quadruples the price. Hypochlorous acid, a colorless, odorless antiseptic widely used in restaurants, is sold at 1,500 won per liter online, but the price changes to 6,200 won per liter if labeled for pet use, according to findings by The Korea Times.
Civic groups are calling for revisions in the pricing metrics of pet-related products. The domestic pet product market received the lowest grade in terms of cost and reliability in a recent Korean Consumer Agency (KCA) study. The report points out that there is little monitoring of the rapidly growing market and highlights the need for quality standards and trade regulations.
The monetary volume of the local pet product market is estimated at 2.25 trillion won ($1.95 billion), according to the latest Euromonitor report. The market will continue to grow and could reach 6 trillion won ($52 billion) by 2027, according to research by the Korea Rural Economic Institute. According to the Ministry of Agriculture, Food and Rural Affairs, Korean pet owners spend about 150,000 won ($130) per month on their pets.
