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The Fur Trade Today - 12/04/06

Published 12/04/06

BBC: ‘Big cat’ fur coats found in raid

Fur coats thought to be made from some of the world’s most endangered big cat species have been seized during a raid. Tiger, leopard and snow leopard skins are thought to have been used to make the eight coats found at a fur dealer’s in Camden, north London.

Met officers from the Wildlife Crime Unit carried out the search under Operation Charm which targets the illegal trade in endangered species.

A man has been questioned and released on bail in connection with the find.

Det Con David Flint said: “Products made from the world’s most endangered species continue to be sold in London and it is this which drives the illegal international trade threatening the survival of these animals.”

More than 30,000 items made from endangered species have been seized since Operation Charm began in 1995.

Source: BBC, 11/03/06

There may be a breakthrough in negotiations to obtain at least temporary relief from revisions in China’s tax policies; at presstime, there were unconfirmed reports that China would agree to a one-year moratorium. The new rules would subject raw fur imports to heavy taxes regardless of whether the pelts are to be re-exported after processing or manufactured into garments. Some 1,400 categories are covered in different degrees, the most seriously affected being those described as high-energy consuming and high-polluting products, while the favored ones include those classified as high-technology or produced by other “encouraged industries.” Fur processing is said to be classified as high-polluting.

Negotiations in Beijing aimed at winning some relief for those trades. At least three of those groups are reported to be representing fur trade interests. On the surface, it would appear that China, with its booming economy and huge trade surplus would not be pressured to bow to the prospect of a drop in its export business. However, the point is raised that, despite the country’s capitalistic-style gains, the government is still socialistic in nature and therefore would be sensitive to issues that could result in a loss of employment for its people. And, with some 1,400 industries said to be affected by the duties, the fallout could be widespread.

The question is, allowing for China’s willingness to negotiate, how far would it go in easing the burden? The revised rules theoretically went into effect September 15, but don’t apply to existing import permits under the old system that may not expire until as late as December 15. It was not known how a moratorium would affect this. According to an earlier alert issued by the Chinese branch of a major international accounting organization, the revision raises the tax on certain imports by eliminating the refund of the value-added tax (VAT) when the product is re-exported. That category includes high-energy consuming and high-polluting products. Fur processing is considered high-polluting because of the effluents released by the dressing and dyeing plants.

The old system provided that goods for processing could be brought in under bond and for the duty and VAT to be refunded when the products were re-exported. But there were loopholes that enabled importers to bring in great quantities of undocumented (and untaxed) skins as well. Under the new rules, goods considered to be in the high-energy or high-polluting class will not be permitted to be imported under bond and will be subject to duty and VAT on importation. This ostensibly would also plug the loopholes.

Chinese importers whose permits are still in force will be allowed to continue to bring in goods free of duty and VAT until December 15, when the permits expire. A moratorium might allow extensions for uncompleted projects. Duty and VAT on bonded materials were to be levied if the finished goods were not exported within the required time. The duty on raw mink reportedly will be 15% and for foxes and other furs 20%. The VAT adds another 17%. Such levies — regardless of the low labor costs there — are expected to make the cost of sending furs to China for processing and manufacturing into garments prohibitive. By the same token, it would put a major damper on Chinese buying at the auctions, which has helped send skin prices to record levels this year.

That strong buying and the record prices for furs ranging from mink to muskrat might never have been were it not for China’s ability to produce garments more cheaply than anywhere else on a quality-for-quality basis. But having to pay duties and VATs can change that. If, for example, the duty is collected and the VAT is refunded to the extent of 13% as is to be the case with other products, that would leave about 20% in levies on the furs. Thus, a mink garment consisting of 40 skins that cost only $50 each would carry an additional cost of about $400, which the manufacturer would neither be likely to absorb nor be able to pass on to his customer. At this year’s prices, $50 skins are not expensive. At the last sale in Copenhagen, dark mink males averaged $68.70 and females $45.60, for a combined average of $58.40.

Late last week, auction officials and other industry figures were still awaiting official word from Beijing on how the talks were progressing. They felt it was premature to predict the effect on trade and prices other than to concede that, if the Chinese authorities remain firm on the revisions, the impact could be significant. But they expressed confidence that some agreement would be reached that would give importers and others some breathing room while necessary adjustments are made to solve such problems as dressing plant pollution and that, in all likelihood, Chinese buyers would return to the auctions when the new season opens in December.

Meanwhile, pressure on the Chinese also is being exerted through diplomatic channels. Kopenhagen Fur chief Torben Nielsen was traveling to Beijing this week to meet with the Danish embassy, which he noted was already in contact with the European Union’s representation in China and with other embassies from countries with interests in the fur trade. The embassy, he said, confirms that there is still much uncertainty concerning the new rules. As to his own thoughts, Nielsen commented “we think that it is too soon to draw any conclusions on how to plan the December auction. There are still many unanswered questions in this matter and it will, of course, create some uncertainty to the detriment of the trade.”

In North America, the heads of the two major auction companies — ordinarily fierce competitors — have agreed to work together toward a solution. That alone would signify how serious they consider the situation. Steve Casotti, the new president/CEO of American Legend, said “we’ll be working very closely with NAFA (North American Fur Auctions) on this. We’ve supplied information to the International Fur Trade Federation and to U.S. government personnel in Beijing. A lot of work is being done by the Hong Kong Fur Federation to address this matter. But it’s premature to speculate on the effects of this until we know all the details and read all the fine print.” NAFA’s Herman Jansen noted “discussions between the Chinese government and the 1,400 industries are ongoing and it would be irresponsible at this time to speculate on the outcome.”

This is the second time in two years that a major problem has befallen the trade on an international scale, the other being the Justice Department probe of possible bid-rigging. Although apparently totally unrelated, what they have in common is that both have sent shock waves around the world and threatened to curb normal trade activity. The DOJ investigation began when FBI agents showered subpoenas on buyers attending the May 2004 sale of American Legend in Seattle. It caused foreign buyers to shy away from the U.S., causing Legend to hold the following year’s auctions across the Canadian border in British Columbia. The probe, believed to be still going on, so far has resulted in one guilty plea in connection with an otter sale. New York broker David Karsch is to be sentenced later this month.

Source: Sandy Parker Reports, 11/06/06

Three New York fur veterans have teamed up in partnership with a well-established bridal retailer who is opening a lavish store in Manhattan. The three are Gil Rothman, Peter Minakakis and Kim Majors. They are opening a fur department in the new Kleinfeld bridal and evening wear store at 110 West 20th Street. The department, with a 500-square-foot selling area, will stock a full range from sable and broadtail to shearling. Kleinfeld, despite its former Brooklyn location, has built an international clientele during its 65 years in business and operates mainly by appointment. Its previous owner was a furrier, who closed the fur department some years ago. The current owners, Ronnie Rothstein and his wife, Mara Urshel, took over seven years ago and believe furs should be an integral part of the operation, Rothman also operates The Gillen Group, a marketing organization, and Minakakis has The Fur Depot. Majors most recently was with CPL Furs, but before that was with Bergdorf-Goodman and Revillon. The official opening is November 9.

Source: Sandy Parker Reports, 11/06/06

Dog caught in trap has officials searching for ordinances

A pleasant walk on the trails behind Holzinger Lodge turned traumatic Friday, leaving a boy and a dog injured and law enforcement officers scouring ordinances to determine how laws could have better protected the pair.

Diane Spalding was at work Friday while a personal care attendant took her sons, Shane, 11, and Luke, 9, and their seven-month-old puppy to the trails to enjoy the temperate day.

The group had been walking for an hour or so when Bosco, a hound and Lab mix, wandered about five feet off the trail and started to howl.

Source: Winona Post (Minnesota), 11/08/06

The international fur trade was breathing a collective sigh of relief last week, following an announcement by the Chinese government that it had removed raw furs from the list of items facing heavy duties and taxes. For almost a month (SPR, 10/23/06), the reports out of Beijing were that China had revamped its import policies covering some 1,400 product categories — including raw fur — and was canceling the duty-free status for items that were to be processed and re-exported. Considering China’s preeminence as both buyer of pelts at the auctions as well as supplier of finished fur garments to the world’s leading markets, trade leaders were envisioning a collapse of the industry’s price structure.

Revised regulations and official delegations were sent to Beijing for high-level negotiations. Although the fur trade was dwarfed by such industries as lumber, paper, metal and coal, its representation in those talks evidently was productive. According to a joint announcement by the Chinese Ministry of Commerce, the General Administration of Customs and National Environment Protection Bureau, the revised list of affected commodities has been whittled down to just 804 and raw fur skins are not among them. But the door to possible restrictions was not completely shut. The announcement concluded by specifying that the central government will continue to monitor and revise the commodity list according to “related national policies.”

Mindful of that, the Hong Kong Fur Federation, which was at the forefront for the trade at the negotiations, said last week it will continue to monitor the situation. Thomas Wong, chairman, noted it is “vital for our federation to continue our lobbying and establishing contacts with the related decision makers in the government in order to keep them informed of the factual information of the fur processing industry in China and avoid raw fur skins (HS code 4301) being listed in the future.” His mention of the processing industry was a reference to possible pollution problems that were said to be a reason for the inclusion of raw furs in the original list.

As reported earlier, the commodities that were most seriously affected were those classified as high-energy consuming and high-polluting products. The more favored ones included those classified as high-technology or produced by other “encouraged industries.” The dressing and dyeing of furs was said to have been classified as high-polluting. China has a serious problem with pollution and reportedly is beginning to address it.

For all practical purposes, China’s latest announcement removing raw fur from the restricted list signals a return to pre-existing practices and what may be described as “business as usual.” An earlier report, to the effect that China was considering a one-year moratorium before implementing the new rules, also had been welcomed by the trade because it would have provided time to correct some of the problems that caused furs to be included in that list. In fact, there were reports that plans were being made to relocate some of the Chinese processing plants to other countries that might be less concerned about pollution. Among the possibilities mentioned were Indonesia, Cambodia, Sri Lanka and Vietnam. However, this would have involved training of new workers and a greater risk of damages to pelts until the new factories gained enough experience. Nevertheless, in view of the uncertainties surrounding government policies and regulations, it is only natural for dressers and other operators at risk to consider contingency plans, including inquiries as to the possibility and conditions of shifting their production to other countries.

The reaction of the trade was notably positive, since the previously bright prospects now were not likely to be dimmed by trade restrictions. In addition to the Hong Kong Fur Federation, others who campaigned in the trade’s behalf included the International Fur Trade Federation and the consuls-general of Finland, Denmark and Canada who are stationed in Hong Kong. Kopenhagen Fur managing director Torben Nielsen, who was in Beijing last week, noted that the major players have been working intensively on the matter. It’s gratifying, he said, “to see that the trade’s work has borne fruit. We can now look forward to the coming season with peace of mind, but at the same time we must make sure that the trade’s political preparedness is in top gear.” Nielsen added that the market situation and the demand for mink skins look “very positive.”

Source: Sandy Parker Reports, 11/13/06

At the request of American Legend, the Department of Justice and lawyers representing ranchers in a separate class-action suit have agreed not to interfere with buyers attending the company’s sale next February. Legend, in a move designed to allay concerns of foreign buyers about returning to the U.S. for fear of being detained for questioning, was actually repeating what it had done prior to this year’s sales. At that time, both the DOJ and the civil case attorneys stipulated they would not attempt to serve papers or in any way interfere with buyers or brokers preparing for or attending the sales.

This cleared the way for a number of buyers who might not otherwise have attended, but a few who evidently were still leery chose to be represented rather than appear in person. The latest assurance by the DOJ again was signed by John Schmoll, the lead attorney in the case. The stipulation by class-action lawyers was signed by U.S. District Judge Ricardo S. Martinez of the western district court in Seattle. As noted, the DOJ has been investigating possible bid-rigging since 2004, which has resulted in the indictment of Alaska Brokerage International for bid-rigging in connection with otters and a guilty plea by its vice-president. Sentencing has been set for later this month. The class-action suit was brought by two former mink ranchers against five New York dealers and brokers, alleging conspiracy to fix, maintain or stabilize prices. One dealer has agreed to cooperate.

Source: Sandy Parker Reports, 11/13/06

Indiana Animal Trapper Released from Jail

An animal trapper won’t face criminal charges for the way he killed two coyotes. The Marion County Prosecutor says hitting them on the head with a shovel and then suffocating them by standing on them is an approved method of killing them.

The man captured the animals in a rural area and brought them back to his Indianapolis home. Animal control officers received an anonymous complaint and went to his house. They told him the animals needed a bigger cage. But the next day they were dead.

Source: Fox 28 (South Bend, IN), 11/16/06

EU poised to ban trading in cat and dog fur

BRUSSELS — Think twice about buying a cuddly soft toy this Christmas — it could be made from dog fur.

Next week, the European Commission plans to call for an EU-wide ban on trading in cat and dog fur to consolidate what several national governments have already prohibited for years.

“There is evidence that cat and dog fur is being put on the European market either disguised as synthetic fur, or other types of fur, or in an undeclared way,” it said in a statement.

Source: Reuters, 11/17/06

EU Proposes to Ban Sale of Some Furs

BRUSSELS, Belgium (AP) — The European Union proposed a ban Monday on the sale and import of dog and cat fur in all 25 member nations, saying it has been found in some clothing, toys and other items on sale in Europe.

The European Commission — the bloc’s executive body — said the dog and cat fur had either been falsely labeled as coming from another animal or was hidden within the products.

According to animal rights activists, millions of animals are bred for their fur — mostly in China and other Asian nations. A ban on dog and cat fur has been in place in the United States since 2000, but activists complain that labeling is not required on items costing less than $150.

Source: New York Times, 11/20/06

The strongest legislation yet to protect animal-related businesses from terrorism was passed by the House of Representatives last week; the measure, identical to that already approved by the Senate, is now at the White House where the president’s signature is expected. Known as the Animal Enterprise Terrorism Act, it will broaden the powers of the Justice Department to combat eco-terrorism. It also expands the scope of existing laws to include fur retailers; addresses the intimidation of secondary and tertiary targets associated with animal enterprises; further increases the monetary penalties and prison terms, and provides other prosecutorial tools.

Both measures were introduced late last year following six months of intensive lobbying by members of the fur trade acting through a coalition known as Fur Wraps the Hill. The coalition represents virtually every segment of the industry from the primary skin level through retail. The senate version was introduced by Sen. James M. Inhofe of Oklahoma and the house bill by Rep. Thomas E. Petri of Wisconsin. Both had wide bipartisan support as well as that of the Bush administration. Weighing heavily in their favor were not only the long record of eco-terrorism in the U.S., but possibly more importantly the protracted campaign against Huntingdon Life Sciences which has included violence against people and property as well as intimidation and harassment of second- and third-party companies that do business with it.

Source: Sandy Parker Reports, 11/20/06

Imports of fur apparel into the U.S. continued their steep downward path in September, reflecting reduced purchases at this year’s international fairs. According to the latest Commerce Department figures, imports from all sources dropped more than 24%, roughly the same as the declines in the three previous months. This is the period of the year in which imports are usually the heaviest, so that the small gains registered in the first quarter have been more than wiped out. Considering this year’s substantially higher prices, the decline in value indicates the drop in the number of comparable units is even greater.

Source: Sandy Parker Reports, 11/20/06

Trap kills dog
Poachers blamed for illegal baited snare

A couple’s dog was killed in a gruesome accident with a poacher’s trap during a routine morning walk Sunday near Perryville.

Lynn Melfa, 50, said she was walking her 2-year-old German shorthaired pointer, Santini, on a trail near her Principio Drive home when the accident took place.

Source: Cecil Whig (Maryland), 11/21/06
Update: Cecil Whig, 11/28/06

MP calls for end to seal hunting

Dartford MP Dr Howard Stoate is urging the Government to ban the trade in seal products as part of the campaign to end Canadian commercial seal hunting.

He signed a parliamentary motion on the issue on November 15, and is encouraging fellow MPs to do the same.

Source: News Shopper (UK), 11/24/06

Family pet killed in hunter’s trap
Dog’s owner now crusading for signs warning of danger

LAKE LUZERNE - Janice Reid hasn’t slept since Wednesday. She passes the hours in her living room, thumbing through the pages of a telephone book, looking for people who might listen to her story — the ordeal that has kept her up at night.

On Wednesday, one day after her birthday, Janice watched her 14-month-old Labrador retriever, Hunter, die in the clutches of a hunter’s trap. There was no warning.

“We were walking, then we hear a yelp,” said her husband, Alexander Reid. “I turned around ... and I knew something was up; they never yelp.”

Source: Post Star (New York), 11/25/06

November, the first of the critical selling months for fur retailers, has produced mixed results so far, but at the same time is fueling their optimism for the balance of the season. More than midway through the month found some disappointment that sales were not exceeding those of last year’s month — which was a strong one — but solace in that they were keeping pace and, more importantly, that their operating margins were running higher, which would translate into bigger profits. For the third consecutive year, retail price tags on virtually all fur garments have gone up substantially, enabling the merchants also to obtain a better markup on stocks carried over from prior seasons.

The past weekend ushered in the holiday shopping season, which was kicked off by “Black Friday,” regarded as the biggest shopping day of the year and so named by retailers for the black ink it brings to their books. That day also is the biggest of the year for animal activists, who call it “Fur-Free Friday” and conduct demonstrations at important locations in key cities across the U.S. Such exercises have been relatively muted in recent years and have generated steadily decreasing coverage by the media. This year’s activities were scheduled to begin as we went to press and there were indications that the various organizations would be stepping up their efforts. At the same time, the Fur Information Council of America distributed a new handbook to retailers to help them address the issues. The 32-page booklet aimed at helping FICA members answer questions from customers and the press as well as deal with demonstrators.

Worldwide, the retail fur sales picture remains spotty: most active in Russia and China, still growing in Japan and Korea and improving in the U.S. Although better retailers in Italy, Spain, France and Scandinavia have been doing business in recent weeks, fur sales in Western Europe are still described as sluggish — partly the weather, but mostly economic problems, especially in Germany, France and Italy. Yet, all of those markets, whether active or not at this juncture, are expected to be in action at least to some extent at the upcoming auctions. As a result, as previously indicated, next season’s skin prices are expected to open strong and continue the upward spiral of the past three years.

The skin market’s strength, while unquestioned until recently, appeared to falter about a month ago, when China indicated changes in its import policies that would apply heavy duties to raw furs. Had the changes remained in place, they would have added about 25% to the cost of processing and manufacturing furs in China, virtually eliminating its competitive advantage. That was viewed as impacting heavily on that market’s skin buying plans in the coming season. Considering China’s dominant role at the auctions, market veterans feared it would send skin prices into a tailspin, causing a collapse of the international fur trade. But fur was only one of about 1,400 commodities to be affected by the new import rules and the quick reaction by many countries in the form of high-powered delegations to negotiate with Chinese authorities resulted in the removal of furs and many other products from that list (SPR, 11/13/06), thus assuring that the auction season will proceed normally.

Meanwhile, the import-problem scene has shifted to Russia, where for the past couple of months manufacturers in Greece and elsewhere have been having problems delivering to their accounts. The official Russian duty on mink and other garments is over 50%, but for years the more resourceful members of the trade have found ways of skirting the official routes, including having busloads of “tourists” buy furs in Greece and bringing them back as personal property and paying no duty. Other reported schemes have involved large wholesale shipments. Lately, however, the government apparently has realized that the country’s retail fur business is flourishing, but its customs revenues from those imports are not.

The recent government campaign to plug the leaks in its borders has resulted in a pile-up of outgoing shipments at the Thessalonika Airport in Greece and of incoming goods stalled by the authorities in Moscow’s airport. There are no official figures as to how much may be involved, but trade estimates are that it amounts to many millions of dollars. And, while the shippers still have access to what hasn’t left their country, they could have problems retrieving what is languishing in Moscow and which could be confiscated.

Unlike the Chinese situation, which involved new rules that caused other countries to go to bat for their affected industries, those affected by Russia’s action were trying to flout existing rules and not likely to get much support from their government. With the holidays fast approaching and Russian retailers less likely to accept deliveries after that, concerns are running high in Kastoria, Siatista, Katerini and other fur-oriented towns in northern Greece, especially with manufacturers’ bank loans about to become due. There were reports that private efforts are being made to work out an arrangement whereby furs would be permitted to enter with sharply reduced customs declarations. While this would raise costs, the rationale is that it would reduce the risks inherent in the existing procedures.

But while Russians shopping for furs in Moscow and St. Petersburg may have difficulty finding what they want, those traveling to Dubai should have no such problem. The Middle East emirate has become a popular vacation and shopping destination for thousands of newly-rich Russians only a relatively short hop from home. Not only are they finding balmy temperatures, luxury shopping and other amenities, but more than 100 Greek manufacturers — along with furriers from other countries — have set up retail shops there. Although they are primarily after the oil-rich arab trade, they are said to be getting plenty of action from the Russians. Not exactly like the busloads of “tourists” coming into Kastoria, but on a much higher level.

Source: Sandy Parker Reports, 11/27/06

In the U.S., a spot check of retailers indicated that the majority expected to make their figures for November. While that would be acceptable, considering last year’s month was a good one — even outstanding for some — they were disappointed at the lack of punch in the current activity. Invariably, they cited an inconsistent weather pattern, but noted that consumers were generally upbeat and appeared to take the higher prices in stride. That, they felt, augured well for the next few months and more favorable weather conditions. The spokesman for a prestigious nationwide department store chain, who was up against “an outstanding month,” said it was “slightly sluggish, but running about even.” His fashion items were moving well, but noted there were fewer of what he termed entry-level and multiple sales.

Source: Sandy Parker Reports, 11/27/06

At presstime, American retailers were gearing for good traffic on “Black Friday,” but also against animal rights demonstrations. In some cases, this called for extra security measures. In New York, an activist group applied for a sound permit to use a bullhorn in front of Bergdorf-Goodman, but the Police Dept. turned them down saying that only one per site is allowed and the store had already applied for it. Undismayed, the group enlisted the American Civil Liberties Union and got its permit. Caring Activists Against Fur (CAAF) also planned to demonstrate on Saturday at Steven Corn Furs in Paramus, N.J. Its further agenda includes Antonovich Furs in Totowa, N.J., on Dec. 10; Macy’s and Lord & Taylor in New York on Dec. 16, and Saks Fifth Avenue in New York on Feb. 10.

Source: Sandy Parker Reports, 11/27/06

Fur is back ... and the fashion industry should hang its head in shame

There is a moment when you realise that fashion has, this time, gone too far. Mine came last week when I was standing in the Joseph shop in Fulham trying to find something to wear to a Christmas party.

I overheard two young women, probably in their late 20s, talking while they caressed a black poncho made entirely of rabbit fur and costing over £300.

Source: Daily Mail, 11/30/06

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