Weekly reading – 18th December 2021

What I wrote last week

Is Menadione, a synthetic version of Vitamin K, safe for pets?

Good reads-0on Business

Netflix Cuts India Prices in Struggle for Biggest Foreign Market. The fact that Netflix slashed prices by 60% in India shows that the streamer feels very threatened by Disney+ and Amazon Prime. I have a lot of love for Netflix, but I don’t think the company is as invincible as many Netflix bulls make it out to be. If it were indeed invincible, then why would it cut prices that much? I often see Netflix bulls make fun of Disney+ ARPU because it has been growing its subscriber base by keeping the price low, especially in India. Now that Netflix lowers prices itself, I can’t imagine this will do the company’s own ARPU any good

U.S. appeals court denies motion to file amicus brief from Coalition for App Fairness. “U.S. courts–and especially appeals courts–normally have a permissive approach toward amicus briefs, above all in high-stakes high-profile cases like this one. It rarely happens that they tell stakeholders they are unwelcome to join a proceeding as “friends of the court” contributing potentially useful information. Here, however, a filing by the Coalition for App Fairness (whose three key members are Epic, Spotify, and Match Group, which is best known for Tinder) and four of its members (Match Group, Tile, Basecamp, and Knitrino) has been flatly rejected by the Ninth Circuit. As a result, the CAF now faces a credibility issue in any other App Store cases around the globe in which it may try to support Epic or even another one of its large members. Even if other courts ultimately allowed the CAF to join other cases, Apple would point to the Ninth Circuit decision, which at a minimum would diminish the credibility of anything the CAF would say on Epic’s behalf. The CAF has now been stigmatized as part of an Epic anti-Apple initiative designed to raise issues regardless of whether those were “organic or manufactured” as the evidence shows.” Even though I have shares of Match Group, Tinder’s owner, and Spotify, I don’t support their effort here. Yes, having to pay commission to Apple cuts their revenue and profit down, but that’s part of doing business on a platform you don’t own.

The DMV Is No Longer a Bureaucratic Purgatory, DMV Says. Information Technology is not just an item on a checklist. It’s the driver of innovation and business growth, even for a government agency known for its terrible services like DMV.

The Guardian has more than 1 million recurring supporters. I hope the likes of Business Insider can pay attention to this. The Guardian doesn’t have a paywall. It simply asks for donations from readers and relies on its journalism to woo subscribers. Putting content strictly behind a paywall doesn’t increase the likelihood of acquiring a subscriber. It actually creates some frustration and annoyance.

With $5 more every month, you can add Disney+ and ESPN+ to your Hulu Live TV+ subscription. An interesting move. I don’t believe that Disney double-counts its subscribers, meaning that a multi-service subscriber can only be counted once. However Disney counts it, I doubt that the move is purely about increasing the subscriber base for Disney+, its flagship streamer. I also don’t see how the new plan can increase Average Revenue Per User (ARPU). A standalone Disney+ already costs $7 a month, higher than the additional $5 that Hulu Live TV subscriber has to pay to get it. Hence, this move is perhaps to make Hulu Live TV+ more appealing and increase the overall revenue.

A good blog on Bill Foley, one of the best yet less famous investors in history

Other stuff I find interesting

A nice story on the new F1 world champion, Max Verstappen. If you want to know what it took to be the best F1 driver in the world, have a read. It requires talent for sure, but talent alone is definitely not enough.

52 things I learned in 2021

The Office Is an Efficiency Trap. “The setup of the Bürolandschaft was designed to follow the natural lines of communication, decrease inefficiencies, and, as an added bonus, cost less: No real hierarchies meant no expensively furnished offices for management. One huge room was far easier to heat, cool, light, and electrify. Yet the design, however well-meaning in theory, was a disaster in practice. In Germany, Scandinavia, and the Netherlands, the experience of working in an open office design was so miserable that in the 1970s local worker councils effectively mandated their removal. But not in the United States, where, as the architecture critic James S. Russell notes, Americans “characteristically reworked” the plan into “something cheaper and more ordered.” The “curvilinear informality” of the Schnelles’ design was formalized into workstations with shelves, cabinets, and dividing panels—what would eventually devolve into the cubicle.”

The World Wants Green Hydrogen. Namibia Says It Can Deliver.Now Namibia is positioning itself as a leader in the emerging market for another hot resource: green hydrogen, which is made using renewable electricity. With bright sunshine 300 days a year and vicious winds that rip along a nearly 1,000-mile coast, renewable experts and government officials say the southwest African nation has outsize potential for renewable energy production.” The next decades will see Africa rise in importance on the global scale with its young population and vast natural resources. China will surely be there to make strategic moves. The question is whether Western governments will do anything about it.

Stats

ETF inflows top $1 trillion

While NBA pays $2.5+ billion for the rights to stream Premier League, Major League Soccer brings in just $90 million a year from ESPN and Fox

In November 2021, 87% of all new vehicles sold in the U.S were sold at or above sticker price

Only 20% of the U.S energy in 2020 came from nuclear. A missed opportunity, I’d say

Between 2013 and December 2021, AirBnb has processed $336 billion in payments on their platform

U.S Online Grocery Sales hit $8.6 billion, $7 billion of which came from Delivery and Pickup

Is Menadione – Synthetic Vitamin K safe for your pets?

I have a 14-month-old cat that I love so much. He has been eating Purina Pro Plan Focus – Sensitive Skin & Stomach for over a year. Lately he has seemed to be fed up with the food so I looked for an alternative last weekend. That’s when I came across the controversy of Menadione and started to read upon it. I’d like to share what I have learned so far.

What is Menadione? It’s the synthetic version of Vitamin K, an essential vitamin for humans and animals. The natural version of Vitamin K (K1 and K2) are proven to be harmless, even with high doses. Menadione, on the other hand, can cause several health issues for humans, particularly liver toxicity. In fact, the FDA has long banned the use of Menadione as a supplement for humans, a decision echoed by several studies in Europe.

Although allergic reaction is possible, there is no known toxicity associated with high doses (dietary or supplemental) of the phylloquinone (vitamin K1) or menaquinone (vitamin K2) forms of vitamin K. The same is not true for synthetic menadione (vitamin K3) and its derivatives. Menadione can interfere with the function of glutathione, one of the body’s natural antioxidants, resulting in oxidative damage to cell membranes. Menadione given by injection has induced liver toxicity, jaundice, and hemolytic anemia (due to the rupture of red blood cells) in infants; therefore, menadione is no longer used for treatment of vitamin K deficiency. No tolerable upper intake level has been established for vitamin K.

Source: Oregon State University

Since Menadione is cheaper to produce, pet food manufacturers have every incentive to include this substance to make their products nutritionally complete (on the surface) and commercially cheaper. The question is whether it is legal to do so in the first place.

Here is what the FDA says on the matter, as recently as April 2021:

Although vitamin K is an important nutrient for animals and several sources are available, not all of those sources can or should be used in animal feed. Many have not been approved for use in the United States. 

Menadione dimethylpyrimidinol bisulfite and menadione nicotinamide bisulfite are vitamin K active substances that are regulated as food additives for use in animal feed. Federal regulation 21 CFR 573.620 lays out how menadione dimethylpyrimidinol bisulfite must be used in feed. Menadione dimethylpyrimidinol bisulfite is a nutritional supplement for the prevention of vitamin K deficiency in chicken and turkey feeds at a level not to exceed 2 g per ton of complete feed, and in the feed of growing and finishing swine at a level not to exceed 10 g per ton of complete feed.

Menadione nicotinamide bisulfite is also used as a nutritional supplement for both the prevention of vitamin K deficiency and as a source of supplemental niacin in poultry and swine. Federal regulation 21 CFR 573.625 states that this substance can be added to chicken and turkey feeds at a level not to exceed 2 g per ton of complete feed, and to growing and finishing swine feeds at a level not to exceed 10 g per ton of complete feed.

Before either menadione dimethylpyrimidinol bisulfite or menadione nicotinamide bisulfite could be used in a manner different from that specified in the appropriate regulation, a new food additive petition would need to be submitted and approved by the Food and Drug Administration.

According to NRC’s publication, Vitamin Tolerances of Animals (1987), based on the limited amount of available information, vitamin K did not result in toxicity when high amounts of phylloquinone, the natural form of vitamin K, are consumed. It is also noted that menadione, the synthetic vitamin K usually used in animal feed, can be added up to levels as high as 1,000 times the dietary requirement without seeing any adverse effects in animals, except in horses. Administration of these compounds by injection has produced adverse effects in horses, and it is not clear if these effects would also occur when vitamin K active substances are added to the diet. 

Source: FDA

The fine print clearly says that the FDA only allows the use of Menadione in chicken and turkey feeds. Any other use of the substance will have to be reviewed and sanctioned by the agency. The last time I checked, my cat is a cat, not a turkey or a chicken. Therefore, if a cat food label doesn’t clearly show that it’s approved by FDA, it’s safe to say that from the agency’s perspective, the product is not legal.

The lack of explicit approval from FDA doesn’t deter pet food manufacturers. These companies argue that Menadione is safe for pets because they follow guidelines from AAFCO and that the substance is used in amount that is so much smaller than what AAFCO recommends. Let’s analyze that. Firstly, AAFCO is an NGO that consists of state officials with responsibility for passing and enforcing state laws and regulations with regard to the safety of animal feeds. AAFCO sets the standards and guidelines that these officials often adopt, but the organization itself has no regulatory authority.

Second, when it comes to the role of AAFCO in this debate, it’s important to separate its opinion on Vitamin K from the one on Menadione. The organization does require that “Vitamin K does not need to be added unless the diet contains more than 25% fish on  a dry matter basis“. What this requirement means is that if a diet doesn’t contain fish at all, there is absolutely no reason to include Menadione. When I found out that my cat’s chicken paste from Purina contains Menadione, I was furious. They put a controversial substance in the food even when they don’t have to! And even though Vitamin K is mentioned, AAFCO doesn’t refer specifically to Menadione as an approved source. In fact, here is what the Pet Food Committee Chair of AAFCO had to say on the matter:

Nowhere in Dr Kashani’s response did he mention that Menadione is approved for use in pet food. He clearly relies on the FDA guidelines, which, as mentioned above, only regulate the use of natural Vitamin K sources K1 and K2. Like the FDA, AAFCO only approves Vitamin K3 for poultry feed, not for pet diets. Sadly, pet food manufacturers muddy the waters and use it as a blanket excuse for their inclusion of this supplement in commercial pet products. In a response to a customer’s question, the owner of Weruva said: “according to AAFCO, cat food that contains at least 25% seafood on a dry matter basis must contain a certain level of vitamin K, and according to AAFCO, the only approved source of vitamin k is menadione“. As you can see from the screenshot below, it’s not exactly what is in the rule book.

Among the items discussed in the AAFCO meeting in August 2021 was the use of Menadione. An expert panel commissioned by AAFCO concluded that this ingredient was safe for use in pet foods. Here is the catch. The panel came to this recommendation after reading a white paper written by Purina Pet Foods, which, you may guess, is a pet food manufacturer. The white paper is miraculously deemed confidential and not available to the public eyes. This blatantly flawed process is frustrating and calls into question the recommendation of this so-called expert panel. Without knowing the rational and evidence behind the conclusion, who can say that it’s thoroughly studied and scientifically proven?

I visited a Petsmart and Petco store last weekend. There are a lot of products with Menadione. Apparently, the ingredient has been used in pet food for decades, yet the exact legality of the practice has barely been questioned. Just because something is a long-standing practice without any regulatory approval doesn’t mean that it’s legally allowed. Rules are rules. And if that’s not enough, consider this. We don’t often change our pet diets without cause. The consistent consumption of food with Menadione, albeit with a tiny dose, every day may also accumulate over the long term. And who knows? It may cause serious health issues for our pets. I don’t know about you, but I am not, in good conscience, willing to do it to my beloved cat.