• Documented since the XVI CenturyDocumented since the XVI Century• Codfish represents 40% of the national Codfish represents 40% of the national per capitaper capita fish fish

consumption (which is close to 60 Kg (lwe)/yr/person)consumption (which is close to 60 Kg (lwe)/yr/person)• Total annual apparent consumption stabilized around 70 K.tonTotal annual apparent consumption stabilized around 70 K.ton• Second world’s largest importer of frozen codfish and the third Second world’s largest importer of frozen codfish and the third

exporterexporter• World’s largest importer of green salted codfishWorld’s largest importer of green salted codfish• Second world’s largest importer of dried and salted codfishSecond world’s largest importer of dried and salted codfish

SALMAR - Margins Along the European Seafood Value Chain (European Project QLK5-CT1999-01346)

The Portuguese Codfish Industry - A Survey

The Survey The Survey

ConclusionsConclusions

• Domestic catches were reduced by 70% in ton (lwe) and 40% in current PTE between 1988 and 1999

• Apparent consumption has stabilized at approx. 70,000 ton (in salted dry weight)

• Industrial production has decreased by a small amount

• Hyper-markets represent an important sales channel

• Exports oscillate without a clear pattern

João Ferreira Dias, Rui Menezes, Fernanda Guia, José Cruz Filipe, Vivelinda Guerreiro

ADETTI / ISCTE - LisboaAvenida das Forças

Armadas1649-026 LISBOA

PORTUGAL

Sample: Sample: • 36% of the cod processors and 40% of the production 36% of the cod processors and 40% of the production • All firms dry and salt codfish; 2 of them produce frozen All firms dry and salt codfish; 2 of them produce frozen

soaked salted codfish as well soaked salted codfish as well • 9 companies act also as wholesalers; 2 owns fishing 9 companies act also as wholesalers; 2 owns fishing

boatsboats

Identification of Sector Competitive Advantages:Identification of Sector Competitive Advantages:• Economies of scaleEconomies of scale• Special relationship with their customers; Special relationship with their customers; • Production efficiency (domestic competitors)Production efficiency (domestic competitors)• Manpower costs (international competitors)Manpower costs (international competitors)• Marketing, brands and quality are also referred as Marketing, brands and quality are also referred as

importantimportant

Issues:Issues:• Problems with quality assurance of suppliesProblems with quality assurance of supplies• Concern about direct imports by the hyper-market chainsConcern about direct imports by the hyper-market chains• Lack of EU standard legislation, defining the main state Lack of EU standard legislation, defining the main state

parametersparameters

Cost structureCost structure (dried salted processing)

RawRaw materials:materials: 88,9 %

Manpower:Manpower: 4,6 %EEnergy: 1,6 %

Other ccosts: 4,9 %

SurveySurvey FindingsFindings• The vertical integration is now limited (until 1974 the fleet The vertical integration is now limited (until 1974 the fleet

owners where also the processors)owners where also the processors)• Several firms express the interest in a cooperative Several firms express the interest in a cooperative

purchasingpurchasing• The relationship with customers is the main source of The relationship with customers is the main source of

competitive advantages competitive advantages • Traditional wholesalers are yet the main sales channelTraditional wholesalers are yet the main sales channel• The larger producers sell an increasing share to hyper-The larger producers sell an increasing share to hyper-

marketsmarkets• Exports are made on a point basis, by agents and otherExports are made on a point basis, by agents and other• Inventories increased a lot from 1998 to 1999Inventories increased a lot from 1998 to 1999

• Imports (lwe) increased by 10% during the period from 1988 to 1999 with a steady seasonality profile

• Imports average price increased during the period 1997-1999, with almost identical average prices (in $US / Kg lwe) for the different states, giving the indication of an integrate and transparent world market

• Frozen codfish has increase its share in supplies

Apparent consumption of salted dry codfish is stabilized

50

55

60

65

70

75

80

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999

K.Ton

Imports supply the processing industry and ththe marketmarket Catches by the Portuguese fleet collapsed

0,0

10,0

20,0

30,0

40,0

50,0

60,0

70,0

80,0

90,0

100,0

1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999

NAFO Nor/Svalb Total

K.Ton

400

600

800

1.000

1.200

1.400

1.600

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999

Frozen Green Salted Salted & Dried Total

Price US$/Ton (lwe)

0

50.000

100.000

150.000

200.000

250.000

300.000

350.000

1988 1990 1992 1994 1996 1998

Norway

Iceland

Russia

Canada

Denmark

USA

Others

TOTAL

Quantities Ton (lwe)

The Importance of the Portuguese Codfish Industry The Importance of the Portuguese Codfish Industry