The E.U. Fish Processors and Traders Association and the European Federation of National Organizations of Importers and Exporters of Fish (AIPCE-CEP) recently released a joint report outlining the trends playing out in the E.U.’s seafood trading and processing sectors.
According to the 2024 edition of the AIPCE-CEP’s “E.U. Seafood Supply Synopsis,” formerly known as the “Finfish Study,” the bloc’s seafood processing and trading sectors face increasingly competitive pressure in international markets, a growing difficulty in securing suitable labor, widely varying standards and regulations among third countries shipping goods to the bloc, complexities stemming from new trade and cooperation agreements, and trouble sourcing raw materials.
Co-written by AIPCE President Guus Pastoor and CEP President Yobana Bermudez, the report stated the latter issue was the sectors’ toughest to overcome in 2023 and requires a strategic innovative push to tackle.
The report showed the E.U. market had access to almost 12.48 million metric tons (MT) of seafood products in 2023, representing a year-over-year decrease of more than 300,000 MT, while domestic supply of seafood for human consumption fell slightly to 3.91 million MT and imports from third countries slipped to just under 8.6 million MT.
To ensure the bloc has the seafood it demands, AIPCE-CEP emphasized that imports are key and “have been the lifeblood of the industry for many years.” Further, relying solely on the region’s domestic supply would result in a much smaller industry and limit the scope for both growth and innovation, their report states.
“The utilization of various species and the complementing of domestic and external supplies have allowed the sector to maintain and increase its relevance across all member states,” it said.
Tools like the bloc’s autonomous tariff quota (ATQ) system are, therefore, essential, according to the report, for maintaining market stability and industry growth, especially during periods of market volatility.
Though the ATQ system has drawn criticism from the bloc’s fishers who claim the system deprioritizes their products within the E.U., the processing sector has argued that the bloc is unable to produce all of the raw materials needed to sustain processing operations alone and that it is essential industry is not hindered by unnecessary tariff or non-tariff barriers that make it difficult to maintain access to raw materials.
“Imposing duties increases costs for consumers, potentially leading to reduced sales and putting pressure on E.U.-based production. This could result in production moving outside the E.U.,” the report said.
According to AIPCE-CEP, some EUR 34 billion (USD 36.9 billion) in value is generated by the E.U.’s seafood traders and processors annually, which is about five times the turnover of the bloc’s catching sector.
Countries like China, which is the world’s largest fish producer, have taken advantage of the ATQ system, sending products like tuna to canning factories in the E.U.
The AIPCE-CEP report also highlighted that by the end of 2023, the bloc sourced increased volumes of seafood from Russia, though the bloc has been mulling on whether to institute harsher sanctions on Russia than the original ones laid out in 2022 after the country’s invasion of Ukraine.
The 2022 sanctions included restrictions on imports of crustacean and caviar, among other products, but left out pollock. For now, AIPCE-CEP confirmed the E.U. fish-processing industry remains heavily dependent on Russian raw materials, with an estimated 34 percent of the total whitefish supply in 2023 being of Russian origin.
Stating there are currently no viable substitutes for pollock among other whitefish, the associations insist a complete ban on Russian seafood would have “severe negative consequences” for the E.U. and global food supply, as well as for the E.U. fish-processing industry.
Besides difficulties in sourcing raw materials, the report said that inflation across the E.U. impacted seafood sales in 2023, with consumers shifting from more expensive species to lower-cost alternatives, such as cheaper fish, meat, or poultry.
Consequently, high-priced seafood stored in cold facilities was often sold below average price or with minimal margins to remain competitive. This led to a decline in financial performance for many companies within E.U.’s seafood sector, it said.
Additionally, since the beginning of 2023, some seafood products destined for the U.K. had to begin being accompanied by a health certificate. The report explained that while trade flows have since stabilized, trading with the U.K. now presents challenges similar to exporting to other external countries.
The report insists these challenges underscore the importance of “staying attuned to international developments, anticipating changes, maintaining strong relationships with E.U. institutions and national administrations, and fostering collaboration within the framework of E.U. competition law.”
Despite the challenges and the complex market, Pastoor and Bermudez said seafood value chains overall demonstrated resilience in 2023, and the region’s per-capita seafood consumption appeared to remain relatively stable.
