An outbreak of COVID-19 in Beijing falsely linked to salmon could prove fatal to some local industry players.
According to several industry figures contacted by SeafoodSource, the situation could eventually buttress the position of big importers by forcing a shakeout of small domestic players and middlemen.
“Local salmon or trout has long been passed off as imported Atlantic salmon, especially in hospitality,” noted a buyer for a state-owned Beijing food trading company that imports salmon. “But now when the latest crisis hit, these firms cannot take advantage, because they have depended on selling a portion of their product as imported. Small companies without cash piles won’t survive.”
Other salmon traders point to damage that could put smaller distributors out of business.
“You are looking at a lifespan of 15 days maximum for imported fresh salmon. And you can’t send it back to the supplier because nothing’s wrong with it,” another trader said. “So your only option is to freeze it, but then you sell it as frozen product at a much lower price. There are no winners and if you don’t have the finances to survive you’re in trouble.”
Chile and Norway hold 39 percent and 36 percent shares, respectively, of China’s fresh salmon market, according to the Norwegian Seafood Council. Other players include Australia, the Faroe Islands, Iceland, and Scotland.
While the recent crisis could see a shakeout of the local production and distribution scene, others see a danger of permanent damage if Japanese restaurant chains, hit by a second blow after the original coronavirus lockdown, choose to exit the market – or to transform their restaurants into regular Chinese-style eateries. That’s the view of a distributor to a Japanese chain with 20 outlets in Beijing. He claimed that his customer is contemplating rebranding as a restaurant concept serving barbecued and hotpot fish.
Yet the distributor said he believes Chinese authorities will be keen to “get control” of the situation and won’t want local fears of tainted seafood to escalate because employment, tax revenues, and duties from imported salmon are all being lost. He also pointed to local government investments in seafood markets and handling facilities in recent years to further develop the trade in imported seafood.
Larger corporations that have invested heavily in salmon will hope that is the case. The damage to major corporations like Joyvio – which has a deep pocketed parent company – will be short, judges Shen Meng, executive director of Xiangsong Capital, a Chinese investment house. Even though Joyvio saw its share price fall nine percent on 15 June, the company will recover, Shen told the Xinhua Daily, because the country’s main stock market is used to turbulence based on rumor.
Photo courtesy of Martin Law/Shutterstock
