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November 24, 1997
(Fisheries and Aquaculture)

Improve quality of seafood products, or lose markets say government, industry spokespersons

Japan, the most lucrative seafood market in the world, holds promise as a market for Newfoundland and Labrador seafood products but considerable work to improve product quality must be done before substantial inroads are made.

That was the principal message given today by Fisheries and Aquaculture Minister John Efford; Alastair O'Rielly, President of the Fisheries Association of Newfoundland and Labrador; and Reg Anstey, Secretary-Treasurer of the Fish, Food and Allied Workers Union. The three met with news media to brief them on their recent mission to Japan to investigate the competitive market position of Newfoundland snow crab.

Mr. Efford said that while quality assurance measures put in place by both government and industry have resulted in some improvement in the quality of our seafood products, "it was made very clear to us in Japan that much more needs to be done if we are to meet the exacting quality demands of Japanese importers and consumers for premium quality. If we do not meet their standards, we put at risk not only our current share of the market, but any opportunity to increase that share."

All three agree that while the Newfoundland and Labrador fishing industry does have certain strengths that give its seafood an edge over others, there are special challenges that have to be met if the province is to compete on an equal footing with "formidable competitors" in the Japanese marketplace.

In Japan, they met with senior officials of 15 major companies, including the largest crab importers. Also with them was David Vardy, chair of the task force reviewing the Fishing Industry Collective Bargaining Act as a vehicle for negotiating fish prices.

Mr. O'Rielly said that "global seafood markets offer great opportunities for the province's fishing industry. However, seafood has become an expensive item in virtually all markets. As a result, consumers demand extremely high quality and good value, particularly in the extremely discriminating Japanese market. The fishing industry of Newfoundland and Labrador, both fishers and processors, must focus on market requirements that consistently deliver excellent quality at competitive prices."

Mr. Anstey said that if this province wants to make inroads with the Japanese seafood importers, "we must concentrate on ways to upgrade the quality of the product produced here in Newfoundland and Labrador from the point of view of harvesting, processing, and transportation."

"While there was a recognition of the improvements made in the 1997 fishery, we were given a clear message by the Japanese importers that this was still short of the mark. If we are to maintain the market we have and if we are to expand, we must do things differently," he said.

"Doing things differently" was a theme the three heard frequently during their meetings with seafood exporters in Japan. In summary, Japanese officials said that if the quality and freshness of this province's seafood products are to meet their expectations, several things must be done: There has to be better on-board handling, fewer landing sites, improvements in dockside procedures, and a reduction in trucking times. As well, stricter attention must be given to product temperature at all stages - at sea, in transit, and in processing plants. They also recommended that landings be spread out over several months, instead of all vessels rushing to land in a short time frame.

The Japanese also told the province's delegation that harvesting must begin earlier, in April or May, so as to avoid soft shell and water temperature problems. To do this, they said, there must be an earlier settlement of prices by industry players so that the industry is positioned to negotiate with Japanese buyers when Japan is ready to make purchasing decisions. Price disputes that delay harvesting, as was the case in 1997, have a negative impact on acquiring markets in Japan because consistency of supply can not be guaranteed in such cases.

Newfoundland and Labrador has long been supplying some seafood products to Japan, but only became a supplier of snow crab in 1994, and only then because Alaska was having a crab resource crisis. In 1996, the province sold 11,000 metric tonnes of finished product to Japan - the equivalent of 17,500 tonnes (39 million pounds) of raw material. This year, however, the province is supplying only 5,000 tonnes of the 90,000 tonnes of crab that Japan is importing. Part of the reason for that decline is because Alaskan crab is not only back on the market, but its quota doubled in 1997 and will double again in 1998. Another reason is that crab from this province lacks the freshness and quality of Alaskan crab.

Other principal competitors for Newfoundland and Labrador crab in the marketplace are Russia and New Brunswick, with Greenland also becoming a recent player.

Minister Efford, Mr. O'Rielly and Mr. Anstey each agree that Newfoundland and Labrador also has seafood strengths in marketing. Newfoundland crab, for instance, has a sweeter taste than that of its competitors. It's a taste preferred by Japanese consumers. As well, buyers like 3K crab because its size gives a good meat yield. They also like the colour of 3L crab, but while the colour is acceptable, its smaller size is a limiting factor in penetrating the Japanese section market for crab. With the prime consumption period for crab in Japan being the November to March period, this also gives the province a market edge over Alaskan crab.

The three emphasized that the issue of quality and freshness is not just a crab issue, but one that has implications for all the province's seafood products. They also believe that with collective action, market challenges can be overcome.

In addition to meeting with company officials, the three also toured seafood auction houses and markets to see first-hand how the Japanese quality standards for seafood are rigidly applied in daily trading transactions. Seafood buyers in Japan do $25 billion worth of seafood annually, with only $1 billion of that from Canada. At just one of the 50 central wholesale markets for seafood, there are more than 17,000 employees. This market (Tsukiji Wholesale Market) in 1996 had a trade of about 610,000 metric tonnes of fish products involving 450 species, with an average trade of more than five million pounds every day.

"It is little wonder," said Mr. Efford, "that the Japanese seafood market is so impressive. While the population of Japan is about one-half the population of the United States, the consumption of seafood there is five times what is consumed in the U.S."

Contact:

Josephine Cheeseman, Fisheries and Aquaculture,(709) 729-3733

Alastair O'Rielly, Fisheries Association of Newfoundland and Labrador, (709) 726-7223

Lana Payne, Fish, Food and Allied Workers, (709) 576-7276