1. The Finnish case of salmon and salmon trout Asmo Honkanen, Kaija Saarni, Jari Setälä and Jarno Virtanen Salmar meeting in Paris 21-22.11.2002

2. Major results Deliverable 1 / Survey steadily growing markets for salmonides * In 1980’s domestic production of salmon trout * In 1990’s trade liberation (EU-membership)> growing import of fresh salmon salmonides are replacing domestic fisheries products

3. Deliverable 1 / Survey the prices of salmonides tend to integrate * low prices in 1995-96 * Salmon agreement 1997: increasing prices 1997-2000 imported salmon to fresh fish market, salmon trout increasingly used for processing * salmon : better availability, quality and image * salmon trout: better raw material for processing

4. Deliverable 1 / Survey Concentration in retailing * two biggest retail chains > 2/3 market share * bigger units > most of the food stuff is sold through bigger units Turnover of fish wholesalers and processors is growing The number of producers is decreasing

5. Deliverable 2 and 3 / Survey Imported fresh salmon and salmon trout are substitutes, but not perfect ones * competion in the fresh fish market: the aggregated fresh fish market stayed stable in 1995-1999, but imported salmon replaced salmon trout * salmon trout remained the main raw material for the processing industry * salmon trout price was mainly determined by its own production volume and the price of imported salmon (1995-1999)

6. Deliverable 2 and 3 / Survey Markets for salmon and salmon trout were competitive from producers to wholesalers Two kinds of results at the retail level: * Campaign prices > competitive markets * Normal prices > high margins, more stable prices Leading prices: * in the salmon chain export prices > salmon price in Finland is determined by the world market price * in the salmon trout chain: wholesale prices > wholesalers central actors in the salmon trout chain

7. Deliverable 2 and 3 / Survey Price cost margins * smaller margins for salmon trout than for salmon, especially at the beginning of the period 1995-1999 * declining margins for salmon

8. Year 2001 Global overproduction of salmonides The international price of salmon below MIP

9. Price ex. processing plant for fresh whole gutted Atlantic salmon, iced, in polyboxes. Gathered by Federation of Norwegian Fishing Industry (FNL) from Norway' s 20 largest exporters. Reflects approx. 60 per cent of Norwegian salmon volume Source: INTRAFISH

10. Salmon trout prices dropped in 2001

11. Import prices of salmon trout extra-ordinary low

12. Retail prices at the same level

13. Market for fresh salmonides grew by 40 % in 2001

14. Market for processed salmonides grew by 20 % in 2001

15. Autumn 2002: Anti-dumping complaint concerning imports of large rainbow trout originating in Norway and Faeroe Isles Supporters: Fish Farmers associations in France, Denmark, Sweden and UK

16. Policy implications of salmon agreement in Finland MIP is an inefficient tool, if the world market price is substantially lower than MIP In Finland, MIP led to import of extra- ordinarily low-priced salmon trout, which is a perfect substitute to Finnish salmon trout imported salmon trout replaced domestic salmon trout in the fresh fish market

17. Synthesis: Structural changes in fish industry in Finland The trade liberation triggered the concentration in the fish value chain in Finland: * increased import - growth at wholesale and retail level * the retail chains put more pressure to fish suppliers: - the retailers demand competitive prices, stable availability, high quality, wide range of products, logistics facilities - intensified price competition: fresh fish > weekly offers processed fish > 4 times/year

18. Structural changes in the wholesale/processing sector Concentration * Few big growing companies trade with the retail chains The availability and quality of raw materials and products are secured by - imports - sub-contracts with smaller wholesalers and producers - common investments on processing

19. Structural changes in the primary production sector Imported salmonids puts new standard for domestic production: Especially for availability and quality

20. Structural changes in the primary production sector Rapid concentration of the production sector: * The licenses limit the production growth * Expansion through buyouts of fish farms in Finland and in Sweden (over 20 % of production) Five biggest Of the total production 19952001 fish farmers 11 %46 % (Baltic herring trawlers 32 %66 %)

21. Structural changes in the fish industry Concentration, coordination and vertical integration More professional fish industry Higher profitability for wholesalers and processors International competition means new challenges for producers