1. Patrice Guillotreau, University of Nantes, France
Rémi Mongruel, Ifremer Brest, France
Ramòn Jiménez-Toribio, University of Huelva, Spain
The tuna canning oligopoly and the European market: Implication for the fisheries
The challenge of change: Managing for Sustainability of Oceanic Top Predator Species, NSF, Santa Barbara, April 2007

2. Content Concentration in the tuna industry
Horizontal market integration (frozen and canned ; skipjack and yellowfin) => Jeon et al ; Squires et al. 2006
Price-cost margins of the canneries
Market power and implications for the fisheries?...

3. Global market 1. Market and concentration of the tuna industry CR4 41%
46%
CR10
62%

4. Concentration in Europe
CR4
43%
CR5
50%
CR10
72%
CR4 US = 80%

5. Number of canneries and trade of canned products in France (1822-2005)
Second sardine crisis
World war I
World war II
First sardine crisis
Discovery of gold mines in California
Exploitation of tropical tuna fishery …
Number of canneries and trade of canned products in France ( )

6. EU fleet (89 purse seiners)
The EU supply chain 2003 (source : Oceanic Dev.)
Atlantic 24 vessels
EU fleet (89 purse seiners)
France and Spain
Indian
Taiwan, South Korea, Japan, Mexico, US,…
Pacific 17
Imports
Traders
Latin America 40% Seychelles 11%
Asian &
American
canneries
290 kT
Seychelles 31% Cote d’Ivoire 19%
Ecuador 46% Colombia 19%
ACP
canneries
Loin plants abroad
South Am., Thailand…
EU Loin plants
Spain, Portugal…
Thailand 13% Philippines 12% Ecuador 10%
Seychelles 15% Côte d’Ivoire 12%
Italy 46% Spain 38%
78 kT
5 kT
191 kT
EU canneries
339 kT
346 kT
Spain 84% Italy 10%
17 kT
EU market
(supermarkets)
UK 34% France 22% Germany 17%
Export markets
685 kT

7. 2. Horizontal market integration YELLOWFIN 2.1 Raw tuna:
2.1 Raw tuna
All series I(1,0) or so (JP)
All series bivariately cointegrated at the 5% level
THAILAND
FRANCE
JAPAN
SPAIN-10
ITALY
Legend:
Granger causality
LOP 5% (bivariate)
LOP 5% (multivariate)
SPAIN+10

8. SKIPJACK :
Every series bivariately cointegrated at 5% but Japan with Thailand and Americas
THAILAND
JAPAN
AMERICAS
SPAIN
Legend:
Granger causality
LOP 5% (bivariate)
LOP 5% (multivariate)

9. SKIPJACK AND YELLOWFIN:
JOHANSEN PROCEDURE :
All series bivariately cointegrated at the 5% level
Multivariate cointegration : 3 models indicate cointegration at the 5% level with consistent Trace and Max E.V. tests :
1) Yellowfin (Thailand-France-Italy-Spain) and Skipjack (Spain)
2) Yellowfin (France-Italy-Spain) and Skipjack (Thailand-Spain)
3) Yellowfin (France-Italy) and Skipjack (Thailand-Spain)
LOP does not hold when Thailand SJ is included
All causalities are bidirectional in the mutlivariate models

10. SKIPJACK AND YELLOWFIN:
THAILAND SJ YF
ITALY YF YF
FRANCE
Legend:
Granger causality
LOP 5% (bivariate)
LOP 5% (multivariate) SJ YF
SPAIN

11. YELLOWFIN
2.2 Canned tuna

12. SKIPJACK

13. Canned tuna market (horizontal)
Price series SJ
France (dry) retail price
Ivory Coast (oil) export to France
UK (dry) import from Thailand
Germany (oil) import from Philippines
Italy (oil) import from Spain
Bivariate cointegration
LOP: IC-UK and IC-Ger.
Causality: Bi. and G=>IC YF
No cointegration
Multivariate cointegration SJ: UK-Germany-IC (but no LOP at 5%)

14. 3. Price-cost margins of the canneries
SKIPJACK
All pairwise series cointegrated (bivariate tests)
Dual Granger causality in all cases
2 proportional (Germany) and 2 non-proportional (UK)
Canned (dry) UK – Frozen Thailand
Canned (dry) UK – Frozen Spain
Canned (oil) Germany - Frozen Thailand
Canned (oil) Germany - Frozen Spain
Example: LCSJ-GERMANYt *LSJ-SPAINt = et
LCSJ-UKt *LSJ-BANGKOKt = et
YELLOWFIN
Canned (dry) France – Frozen Italy
Canned (dry) France – Frozen Spain
Canned (dry) France – Frozen Thailand
Canned (oil) Italy – Frozen Italy
Canned (oil) Italy – Frozen Spain
Canned (oil) Italy – Frozen Thailand
None cointegrated (bivariate tests)
No Granger causality
No proportionality

15. 4. Market power, so what ?...
Retail France dry YFT
Spain-Italy dry YFT
Abidjan oil SJ
UK dry SJ
German-Bangkok oil SJ
Price-cost margins of canned tuna sold in Europe

16. Key results: . Skipjack and yellowfin markets are cointegrated
Yellowfin is the leader market
European canned tuna markets are not so well integrated spatially, except skipjack (caused by US !)
Raw tuna prices are better transmitted by the canning industry for skipjack than for yellowfin
Margins of canneries and retailers are fairly stable for skipjack and increase for yellowfin

17. Conclusion Consequences of the Yellowfin leadership?
Competitive supply-side => race for fish
Potential market power on the demand side => affect the consumer surplus (double marginalisation). No impact on the fishing industry?
Next step: testing for market power with an I.O. structural model (e.g. Bresnahan-Lau)