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ACP fish producers need to tap into EU ‘eating out’ and traditional markets

08 May 2010

Interview with Mr Jean-Michel Le Ry, Director of Sobretah. Jean-Michel Le Ry has undertaken missions in a number of ACP countries, such as Fiji, Seychelles, Senegal, Mauritania and Cape Verde, for organisations including FAO, CDE and Veritas, working to improve marketing conditions for fishery sector producers.

Q: Many ACP countries, in particular countries with tuna resources, want to gain greater benefits from their fishery resources. In terms of marketing, does this involve a change in the way the catches are treated?

It is true that by putting tuna in a can, the product is standardised rather than valorised. That said, it is not that simple to change and go, for example, from canned tuna to tuna loin. Some countries like Fiji have tried this, and started to produce tuna loin for restaurants. We have also seen some missed opportunities, such as in Senegal, where there is a fleet in decline, with pole and line vessels of Basque country origin. They catch high-quality tuna, with the fish caught by pole and the boats making short trips, thus maintaining the freshness of the product. But the local buyers offered the same price for this tuna as for frozen tuna of lower quality, since the whole lot was intended for canning. There was a project in Dakar to make tuna loin for the fresh fish market, using the catches from these pole and line vessels for the nearby European market, but this didn’t materialise.

Q: You say it is not simple to go from tuna canning to the production of tuna loin. What does such change require?

In terms of infrastructure, the positive side is that when you have a canning facility, most of the ‘hardware’ is there already. To make tuna loin, people need to add an air-conditioned hall, cold stores, ice, a vacuum pump for packing, etc, but it is not too complicated.

Most importantly, and also most difficult to achieve, is the ‘quality jump’ in terms of employees’ know-how. For canned tuna, the professional competences needed are limited: handling operations are simple, and the tuna cans are sterilised at a high temperature, so the attention required regarding hygiene is limited. For tuna loin production, it is necessary not only for staff to acquire technical knowledge (removing the fish bones, etc) but also meticulous attention needs to be paid to hygiene, all along the production line. This is a big challenge for the ACP countries – investing in training to improve production quality and hygiene. Another challenge is establishing whether a market exists ….

Q: For higher added-value products, like tuna loin, what are the characteristics of this market?

Today, there are two big markets: the Japanese market, which requires tuna loin frozen very quickly to a very low temperature. The advantage of this kind of treatment is that it preserves the cells of the tuna flesh intact, so it’s still possible to consume it raw once thawed out. For the time being, it is mainly Korean and Filipino fleets that supply this market, and freezing is done on board. But you also find, in Fiji or Polynesia, fleets of local small long-liners, making short fishing trips, using the deep freezing facilities in on-shore factories. Another advantage to this product is that it’s easy to transport by boat, thereby lowering transport costs compared to air freight, and hence producing less carbon dioxide, which is something that can be useful if producers want to look at their carbon footprint. It could be a useful model for the ACP countries in the Pacific or the Indian Ocean to explore.

The other important market for tuna loin is the fresh fish markets in the EU and US. Again, these are markets for high-quality products, intended for restaurants. What the upmarket restaurants are asking for is tuna loin ready to cook – a kilo, a kilo and a half – it looks just like a beautiful piece of rump steak. Earlier, I was talking about the canners’ project in Senegal that didn’t materialise, but which is still interesting in principle for this kind of market.

Q: You are talking about the restaurants market. But in Europe, marketing is mainly done through supermarkets, isn’t it?

A: Well, you would be surprised! In Europe, the market for what is called ‘eating out’ – the fish you eat in restaurants, cafés or other eateries – accounts for 30% of the global seafood market for marine fishery products. It is true that most of the fish consumed in the home is the fish that you buy in the supermarkets, which accounts for 50% of the European market globally, or in fish shops and other traditional markets, which account for 20% of the sales.

It is a bit like an iceberg: the large supermarkets, which account for 50% of the global market, with a limited number of powerful actors, speak with one voice. The result is that people see only them. The ‘eating out’ market (restaurants etc) and traditional markets, even if these also account for 50%, are more dispersed, and as a result are invisible. However, that is where, in my view, there are the greatest opportunities for the ACP countries. Especially in a context where the ACP fishing resources of great commercial value are over-exploited and where, to increase the economic benefits of fishing, it will be necessary to put a production system in place so that there will be less fishing, but better prices for the fish caught.

Q: So, you think that the supermarkets’ policy, as regards seafood products, is geared towards offering low prices?

A: Consumers buying fish in supermarkets have very little capacity to discern between species, size or origin. What strongly influences their purchase is the price. I’d like to mention a recent consumer study in Europe, where the consumers entering the supermarket were asked about which fish they wanted to buy: they wanted to buy good quality fish, hand-line caught seabass, for example. But, when we checked at the supermarket exit what they had bought, we found that it was salmon, produced by aquaculture. Because it is less expensive, and because it is advertised by the supermarket, which in these times of economic crisis wants to reinforce its image of ‘low prices’. The supermarket is a system where the salesperson does not advise the consumer; consumers have to manage all by themselves. And as they do not have the capacity to discern, they buy the least expensive of the products on offer.

Today, the ACP countries need to realise that all easily accessible European markets are taken: these are the markets interested in large quantities, regularity of supply, low prices. The products that occupy these markets are products like pangasius from Vietnam and farmed salmon from Norway. Of course, some supermarkets, interested in cultivating their image, will put a few attractive products on their shelves to look good, but this is not where their business is.

Q: So, if the ACP countries want to tap into this ‘eating out’ market, where do they need to look for buyers?

There are the importers/wholesalers in traditional markets: Rungis in Paris, Billingsgate in London, the New York market, etc. For these markets, what is important is the quality, the freshness, the diversity of the products, and how exotic the products are – there is less emphasis on the need to supply large volumes.

However, the importer/wholesaler is both a link in the chain and a screen, preventing direct contact between the seller and the consumer. The wholesalers are not the ideal intermediaries to communicate the product qualities to restaurants chefs, for example. Today, you also increasingly find buyers’ groups for the restaurants, like Métro, the best known in Europe.

Q: What do you think of other initiatives aimed at improving the economic returns from ACP fisheries, such as the initiative taken recently by the parties to the Nauru agreement, who want to ecolabel the skipjack caught by purse- seiners that do not use FADs (Fish Aggregating Devices)?

Well, if the goal is to improve the selling price of the product, this particular initiative leaves me sceptical. On the one hand, it is important that the countries that are making efforts to manage their fish resources sustainably let the consumer know, and any effort in this direction has to be encouraged. But, here you have a fish, the skipjack, whose intrinsic quality is not good: it is a tuna species whose flesh is very fibrous, dry, and not easy to eat. Generally, canned skipjack is fish crumbs in oil – this presentation makes it less dry and easier to swallow. So, it’s a bottom-of-the-range type of product, and what concerns the consumers of skipjack is the price. Therefore, to put an ecolabel on this type of product hoping to improve the economic returns from the fishery is, in my opinion, a very risky bet.

This being said, this example really shows the importance for the ACP countries that want to improve the returns from their fish resources, of launching two policies: a policy aimed at production under sustainable environmental, social and economic conditions – selective fishing, fair price to the producer, etc – and another policy for communicating and promoting the characteristics of their products in order to target niche markets, such as the ‘eating out’ market in Europe.

Q: What is the current situation in terms of fish marketing in ACP countries?

What has struck me in the majority of ACP countries I have visited is the lack of structured initiatives and marketing organisations at the producer level. There is a rule: every time that producers such as the ACP fish producers are interested in gaining access to a market that was developed without them, the first thing they need to do is unite. This is so that they can coordinate their initiatives towards the buyers, set up the quality standards for their products, and collect and offer a sufficient volume in order to ensure regular deliveries, but also to be better heard by the decision makers. I can give you the example of Guinea Conakry, where a few years ago there were six local exporters offering exactly the same products to European buyers without having any contact with each other. The buyers, individually contacted by these six exporters, could easily play one against the other and get the lowest possible prices. At the end of the day, nobody in Guinea gained anything.

Generally, I would say that if producer concerns are not sufficiently heard by decision makers, it becomes more difficult to maximise the benefits from the sector. In Mauritania, for example, a state company, the Mauritanian society for the marketing of fish (SMCP) organises the marketing of frozen octopus, and does it very well. Frozen octopus has a fairly simple distribution chain: a single product, eight different sizes, with only a few buyers. This system of centralised marketing did bring a greater transparency in the transactions, benefiting everyone.

But some difficulties arise today as a result of SMCP also having the monopoly in the frozen fish marketing, where there is a large variety of species, sizes, and in quality. This high diversity of products is not sufficiently reflected in the system used by SMCP, which in the past dealt with only one much simpler product, frozen octopus. Nowadays, SMCP imposes the price of frozen fish on foreign buyers, who sometimes don’t have a clear idea of the exact quality of what they are buying. This creates uneasiness on the part of the buyers and, in my view, contributes to a lower value being placed on high-quality species such as dorade. It has also led to the development of parallel circuits, with fish from Mauritania going to Senegal or Morocco, being unpacked then repacked as products from Morocco or Senegal, and then being shipped on to be sold in Europe.

Obviously, with the transport costs, and time spent in transit affecting the quality of the fish, the fishermen are not getting as good a price as they could.

Q: Mauritania is also the country with which the EU has the most important fisheries agreement. Within this framework, Mauritania recently insisted that, for 2012, all the fish caught in the Mauritanian EEZ should be landed locally, thereby including the catches made by Europeans. Does this imply that the landing and marketing difficulties such as those you mention will have to be overcome?

It is certain that difficulties such as the lack of infrastructure, cold storage, qualified personnel and so forth are arguments that will be used by European operators to escape their landing obligations. We also shouldn’t forget the presence close by of the Las Palmas harbour. This port is very attractive to European fishermen and other industrial vessels because the infrastructure is good, but also because the Canary Islands, an ultra-peripheral zone of the European Union, benefits from attractive marketing conditions. At a seminar in Las Palmas that I attended last month, a representative of Canary Islands Chamber of Commerce laid great stress on this particular status of Las Palmas, comparable to a free trade zone, and hoped it would continue.

This means that for the countries of the region, like Mauritania, they need to become more attractive than Las Palmas, a really an enormous challenge. In the case of Mauritania, as with other EU partners, the European Union support needs to take into account these dynamics related to marketing and the need to support local producers in organising themselves.

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