CASE STUDY GILT-HEAD SEABREAM IN ITALY PRICE STRUCTURE IN THE SUPPLY CHAIN LAST UPDATE: SEPTEMBER Maritime Affairs and Fisheries

Transcription

1 CASE STUDY GILT-HEAD SEABREAM IN ITALY PRICE STRUCTURE IN THE SUPPLY CHAIN LAST UPDATE: SEPTEMBER Maritime Affairs and Fisheries

2 Contents 0 TASK REMINDER SCOPE AND CONTENT CASE STUDY SCOPE CONTENT OF THE DOCUMENT DESCRIPTION OF THE PRODUCT BIOLOGICAL AND COMMERCIAL CHARACTERISTICS PRODUCTION CYCLE PRODUCTION AND AVAILABILITY OF GILTHEAD SEABREAM Structure of the supply Supply from capture fisheries Supply from aquaculture SEABREAM AQUACULTURE IN ITALY Farming systems Location of production THE EU MARKETS FOR FRESH SEABREAM STRUCTURE OF THE EU MARKET THE ITALIAN MARKET A mature market Seabream species n 1 in the Italian consumption of fresh fish A market widely depending on import Supply balance Segmentation of the market OVERVIEW OF THE MAIN EU MARKETS Greece Spain PRICES ALONG THE SUPPLY CHAIN PRICE INFORMATION SOURCES PRODUCER PRICES FIRST SALE PRICES IMPORT PRICES WHOLESALE PRICES RETAIL PRICES MIPAAF API ISMEA EUMOFA PRICE TRANSMISSION IN THE SUPPLY CHAIN ANNEXES SOURCES USED i

3 0 TASK REMINDER Scope and content 0.1 Case study scope Reminder The rationale for the choice of seabream to analyse price transmission and distribution of value in the Italian supply chain is described in the table below. Product Origin Characteristics Market and price drivers Seabream (whole, for fresh market) Aquaculture (EU + extra-eu) Growing reference in the fresh whole fish market Largest species consumed fresh Species particularly requested by big retailers Supply/demand balance (market stability) Price of imported seabream/seabass (Greece, Turkey) Origin : quality and differentiation of Italian products vs. imported products Key elements of the analyses will concern: The influence of Eastern Mediterranean supply (Greece, Turkey, Croatia) on prices and balance; The role of GDO ( Grande Distribuzione Organizzata, literally Large Organized Distribution, i.e. large-scale retailers) in the marketing of farmed species; The market dynamics and the effects of private labels and innovation (fillets, carpaccio) on prices and demand. The study focuses on the Italian market for fresh whole seabream. It also provides an insight into the other two big markets: Greece and Spain. This is an update of a previous study, initially carried out in March Species - Products Main MS (focus) Other MS (overview) Seabream (fresh, whole) Italy Greece, Spain 0.2 Content of the document In conformity with the methodology developed within EUMOFA project and published in the website ( the document includes: A description of the product; A description of the most relevant EU markets for seabream, with a special focus on the Italian market; An analysis of the price structure along the supply chain. 1

4 1 DESCRIPTION OF THE PRODUCT 1.1 Biological and commercial characteristics The case study focuses on fresh farmed gilt-head seabream. Case study product Name: gilt-head seabream (Sparus aurata) FAO code: SBG Presentation: quite exclusively whole fish, ungutted, fresh or chilled. Fresh fillets and frozen fillets marginal (fillet yield: 25%). Commercial size: g (mostly), but some farms offer individuals up to 1,5 kg. 2

5 Biological parameters Parameter Characteristics Temperature C Habitat Saltwater Diseases in farming Vibrio spp, Pseudomonas spp, Pasteurella spp, Trichodina; Cryptocaryon spp Maturation After 13 months Diet in the wild Carnivorous Diet in farming Juvenile phase : live feed Grow-out : fish feed (50% of marine origin, hereof 35% fishmeal) Juvenile phase 140 days Grow-out months Distribution in the wild Mediterranean, Black Sea, North Eastern Atlantic Farming Greece, Turkey, Italy, Spain, France, Malta, Croatia, Cyprus, North Africa, Egypt, Israel Farming systems Ponds/lagoons, tanks, cages, offshore systems Source : Kontali analyse Related codes in the product nomenclature. Gilt-head seabream is distinguished in the Combined Nomenclature (CN) 1. From 2012 onwards the fillet and the frozen forms are differentiated: CN code: Gilt-head seabream (Sparus aurata), fresh CN code: Gilt-head seabream (Sparus aurata), frozen. 1 CN is a tool for designating goods and merchandise which was established to meet simultaneously the requirements both of the Common Customs Tariff and of the external trade statistics of the EU. The basic regulation is Council Regulation (EEC) n 2658/87; an updated version of the Annex I is published every year as a Commission regulation (latest version: Commission Implementing Regulation (EU) n 2016/1821). 3

6 1.2 Production cycle Figure 1 Production cycle of seabream/seabass BROODSTOCK EGGS HATCHING LARVAE WEANING FRY NURSING JUVENILES ON GROWING FISH 3-4 days 2 months 1-2 months months DISTRIBUTION TO MARKETS PACKAGING TRANSPORT HARVESTING Source : Kontali analyse 1.3 Production and availability of gilt-head seabream Structure of the supply The European supply of gilt-head seabream depends at 96% on aquaculture. Table 1 - Structure of the EU supply of gilt-head seabream (Sparus aurata) t Fisheries Aquaculture Total production % aquaculture ,7% ,0% ,1% ,7% ,3% ,2% ,9% ,1% ,3% ,2% ,8% ,1% ,9% ,8% ,4% ,9% Source : based on FAO-Fishstat 4

7 1.3.2 Supply from capture fisheries Catches of gilt-head seabream are dominated by France, Italy and Spain in the EU and by Tunisia, Egypt and Turkey outside of the EU. In recent years EU catches have been quite stable around tonnes. Yearly world catches of gilt-head seabream average tonnes. The Mediterranean Sea provides almost all of the world supply. Figure 2 World catch of gilt-head seabream (tonnes) Table 2 - World catch of gilt-head seabream (tonnes) France Spain Italy Portugal Greece Croatia Other EU EU Egypt Tunisia Turkey Morocco Mauritania Other non-eu Non-EU TOTAL % EU-28 49% 59% 55% 60% 61% 34% 31% 35% 31% 35% 37% 43% 34% 43% 48% 42% Source : FAO-Fishstat 5

8 Other species of seabreams, about tonnes per year, are also caught in the EU, mostly black seabream (Spondyliosoma cantharus) for tonnes, mainly in France, and red seabream (Pagellus bogaraveo) for tonnes, primarily in Portugal Supply from aquaculture For the purposes of this study, aquaculture production was analysed making reference to datasets coming from two different sources: FAO and FEAP 2. According to FEAP data, the European production of farmed gilt-head seabream has considerably increased from 2005 to 2008, reaching a record level of tonnes 3 in On the other hand, it is worth noting that, according to FAO, this peak is reflected in 2009 production figures, while for 2008 only a limited increase of 2% over the previous year is recorded. The overproduction situation of 2008 led to a price crisis, which entailed a reduction of the supply of the two main producers (-21% for Greece and -11% for Turkey) in In 2011 the Greek production continued to fall (-15%) whereas Turkey increased back to pre-crisis level. In 2012 the Greek started to grow again (+20%) as well as the production of the second-largest EU producer, Spain (+15%). In the last years the European production (Turkey included) has stabilised at around tonnes, with Turkey increasing its share (from 18% in 2009 to 33% in 2015) at the expense of the EU (from 82% in 2009 to 67% in 2015). Table 3 Evolution of gilt-head seabream farming production (t) Country CYPRUS FRANCE GREECE ITALY PORTUGAL SPAIN CROATIA EU TURKEY TOTAL Data for Malta has not been included due to lack of reliability (FEAP) The Italian production remained relatively stable between and tonnes along the period Then it regularly declined, due to the harsh competition from Greece and Turkey, to reach tonnes in 2015, its lowest level since Italy represents 7% of EU production in 2015 (against 10% in 2011 and 13% in 2002). Source : FEAP After a period of high increase leading to the record year of 2006 and to the overproduction crisis of market size seabreams in 2008, the EU production of seabream juveniles decreased until Then it rose again and from 2011 onwards the production is relatively stable around million juveniles. 2 FAO data (Tab. 1) allow the comparability between fishery and aquaculture production. Data collected by FEAP (Tab.3) do not cover fishery production but give information also on juvenile production. The big 2008 price crisis due to overproduction which led farmers to reduce the production appears clearly in FEAP statistics: 2008 is the highest year with t, with a high increase of production over previous year ( t). 6

9 At the Mediterranean basin level 4 a record has been reached in 2012 with 599 million seabream juveniles produced, due to a strong increase of the Turkish production of juveniles, which led to a record level of the production of market-size seabreams in for this country. Table 4 Evolution of the production of gilt-head seabream juveniles (thousands) Country GREECE ITALY FRANCE SPAIN CYPRUS CROATIA PORTUGAL EU TURKEY TOTAL Source : FEAP 4 Egypt and Israel are also significant producers of farmed gilt-head seabream ( tonnes and tonnes respectively in 2015, according to FAO), but their production of juveniles is not known. 7

10 1.4 Seabream aquaculture in Italy Farming systems The Italian seabream aquaculture rests on two main farming systems: sea cages and land-based systems. Table 5 Farming systems in the Italian seabass/seabream aquaculture Location Features Farming systems Wetland Land-based system Sea cages Specialized hatchery Zone Fishing lagoon, lagoon, coastal lake Coastal zones in/off-shore land Technical Average area 5 ha 0,7-3 ha (pond) m 3 - Water use Brackish (sea water by natural rising, wells) Well (sea diversion) Sea Well (water supply point in sea and water treatment) Feed Pellets, extruded feeds, natural trophism Extruded feeds Extruded feeds Rotifers, artemia, microencapsulated, crumbled, extruded Species farmed Predominantly seabass, but also seabream, mullet and eel Seabream and seabass (> 90%) White seabream, drum,... Seabass and seabream Other sparids Seabass, seabream Other sparids Farming phases Pre-growing On-growing Pre-growing On-growing (some of them equipped with a hatchery) Pre-growing On-growing (some of them equipped with a hatchery) Reproductionhatchery Production Capacity 120 t/year t/year t/year 3-50 millions of juveniles Farming density 1-7 kg/m kg/m kg/m 3 - Length of farming period months months months 5-9 months Feed conversion ratio Commercial 2,0-2,5 1,8-2,5 2,25 - Product size g g g 2-4 g Markets Regional/national Regional/national Regional/national/export National/export Large scale retailers Traders, wholesalers, Large scale retailers Customers Traders, wholesalers, Fish farmers restaurants Traders, wholesalers catering Source : ISMEA - EUMOFA 8

11 1.4.2 Location of production The two regions of Central Italy, Lazio and Tuscany, represent more than half of total production (27% and 25%, respectively), followed by Sicily (20%) and Sardinia (15%). Table 6 Production of farmed seabream by region in Region Production (tonnes) Friuli Venezia Giulia 170 Veneto 23 Emilia Romagna 16 Liguria 410 Toscana Lazio Puglia 390 Sardegna 979 Sicilia TOTAL Source : UNIMAR/MIPAAF 2 THE EU MARKETS FOR FRESH SEABREAM 2.1 Structure of the EU market The EU apparent consumption of EU-28 for fresh seabream amounts to tonnes in 2015, stable compared to Italy is the largest market, followed by Greece and Spain. These three Member states account for 77% of the EU overall market in volume. The highest apparent per capita consumption is observed in Greece (2,8 kg), followed by Cyprus (0,7 kg), Portugal (0,6 kg) and Italy (0,5 kg). 5 Table 6 data come from the Ministry (MIPAAF). They do not match with EUROSTAT data (total Italian production: tonnes in 2014) and with the data in Table 3 (8.200 tonnes in 2014), which are provided by FEAP based on data transmitted by API (Associazione Piscicoltori Italiani). 9

12 Member States 2.2 The Italian market A mature market Table 7 - The EU main national markets for seabream in 2015 Production Fisheries (t) Production Aquaculture (t) Import (t) The Italian market for fresh seabream amounts to tonnes. Export (t) Apparent market (t) Consumption per capita (kg) Italy ,512 Greece ,846 Spain ,388 France ,155 Portugal ,607 Germany ,043 United Kingdom ,037 Croatia ,402 Cyprus ,708 Other MS Ɛ Ɛ ,015 EU ,211 Sources : EUROSTAT (Production Fisheries), FEAP (Production Aquaculture), COMEXT (Import-Export) After a period of strong rise in the years (+26%), the market has experienced a decreasing trend (-9% between 2009 and 2012). Indeed, due to the intense competition of exporters (Greece, Turkey), the Italian aquaculture production has decreased and refocused on quality, e.g. organic production, which rose from 402 tonnes of organic seabreams in 2013 to 968 tonnes in 2014 and tonnes in Table 8 The Italian apparent consumption of fresh seabream tonnes Production -aquaculture Production - catches Import Export Apparent market Source : API, FAO, COMEXT Seabream species n 1 in the Italian consumption of fresh fish With almost 9% of the total fish quantities consumed fresh, seabream is the species n 1 in Italy and has significantly increased its position in the years , with a market share rising from 7,7% in 2005 to 8,9% in Since 2010 the share of seabream is quite stable. 6 Source: CREA-BioBreed-H2O project 10

13 Table 9 Main species consumed fresh in Italy Species In volume (%) In value (%) In volume (%) In value (%) Seabream 8,9 8,1 8,8 8,6 Mussel 8,9 2,1 8,5 2,1 Salmon 4,0 4,8 7,4 8,8 Trout 6,2 5,2 7,0 6,9 Anchovy 6,8 3,9 6,1 3,6 Seabass 6,5 6,5 6,0 6,3 Clam 4,7 3,8 4,7 3,9 Squid 3,6 3,9 4,0 4,0 Shrimps 3,5 5,0 3,8 5,4 Hake/pollack 3,9 4,5 3,8 4,2 Octopus 4,3 4,6 3,3 3,8 Swordfish 3,1 6,0 3,1 5,5 Cuttlefish 2,9 2,9 2,4 2,6 Sole 2,2 3,9 1,9 3,2 Perch 2,2 2,4 1,7 1,9 Mullet 1,7 2,0 1,5 1,6 Other 28,3 30,4 27,5 27,6 Total 100,0 100,0 100,0 100,0 Farmed seabream remains attractively priced and maintains a positive image in the mind of consumers. According to information collected through stakeholder interviews, main substitutes to fresh seabream are: farmed seabass (Dicentrarchus labrax), which is produced by the same producers with the same farming process, other regularly available farmed fish, either locally produced (mullets) or imported (salmon), and, to a lesser extent, wild Mediterranean species (in addition to the wild gilt-head seabream) : common dentex (Dentex dentex), blackspot seabream (Pagellus bogaraveo), pandoras 7, etc A market widely depending on import The Italian seabream market is supplied at more than 75% by imports. Source : ISMEA Greece is by far the main supplier, providing 60% of total imports (in 2015), followed by Turkey (21%), Croatia (7%) and Malta (6%). Turkey and Croatia strongly developed their exports to Italy in the last years, from less than tonnes in 2008 to tonnes in 2015 for Turkey, and from 300 tonnes to tonnes for Croatia over the same period. 7 Italian catches in 2015: pandoras tonnes, gilt-head seabream 931 tonnes, blackspot seabream 136 tonnes, common dentex 179 tonnes. 11

14 Spain, France and Portugal deliver smaller volumes, but higher value products, as can be seen in the unit price table. Table 10 - Evolution of Italian imports of fresh gilt-head seabreams (in tonnes) (CN until 2011, CN from 2012) Origin GREECE SPAIN FRANCE MALTA NETHERLANDS PORTUGAL CROATIA Other EU EU28-INTRA TURKEY Other non-eu EU28-EXTRA TOTAL Source : EUROSTAT-COMEXT The period analysed ( ) has been marked by strong fluctuations: an important price drop in 2008 caused by the overproduction crisis (Greece, Turkey). In 2011, these two main suppliers experienced a dramatic price increase, 17% for Greece and 25% for Turkey, resulting from limited supply. Prices fell sharply in 2012 (around 20%), caused by a significant production increase and remained at this low level in They strongly increased again in 2014 (+10%) and 2015 (+11%) and returned to their 2011 level. Greece is by far Italy s main supplier (70% of Italian imports in 2014) and the Greek production decreased in 2014 (from to tonnes) and 2015 (from to tonnes), leading to price increases. As Greece is price-maker, Turkish prices increased at approximately the same rate. In 2015 the seabream shortfall has been particularly severe in the summer months, with very high prices which significantly impacted the average import price of the year. The decrease of Italian production in 2014 and 2015 has also to be taken into account in this respect. Seabream of Spanish origin is characterised by a markedly different price evolution: an increase during the period observed, particularly since 2005 (a 50% increase between 2005 and 2013). Spain was able to increase its prices thanks to higher quality and larger sizes than those provided by the Greek and Turkish production, and also because they export not only farmed seabream but also some wild seabream (as well as France and Portugal), which are more highly valued. Table 11 - Average import prices of fresh gilt-head seabream (EUR/kg) (CN until 2011, CN from 2012) Origin GREECE 4,51 3,70 3,64 3,69 4,31 4,25 4,30 4,03 3,37 3,76 4,30 5,02 4,18 4,13 4,65 5,22 SPAIN 8,99 7,99 8,30 8,85 8,94 7,39 7,73 7,88 8,69 9,55 10,51 10,27 10,14 11,11 10,44 9,41 FRANCE 4,76 5,89 6,99 6,98 6,55 6,45 7,18 8,41 8,67 7,16 9,32 9,06 9,07 10,54 7,23 11,69 MALTA 3,12 2,82 2,62 3,79 5,07 4,79 4,74 4,15 3,26 3,45 4,01 4,86 4,09 4,23 4,71 5,21 PORTUGAL 11,60 11,93 11,97 11,65 11,56 11,65 14,56 14,24 11,76 11,20 13,15 13,62 16,74 14,18 16,03 16,97 CROATIA 3,91 3,27 3,47 4,10 4,25 4,53 4,37 4,85 4,53 4,30 4,49 4,97 4,61 4,71 5,40 4,71 TURKEY 4,12 3,56 3,28 3,37 4,45 3,64 3,58 3,44 2,84 3,18 3,74 4,69 3,53 3,86 4,36 4,84 TOTAL 4,44 3,83 3,80 3,94 4,55 4,37 4,50 4,21 3,59 3,95 4,48 5,26 4,35 4,33 4,78 5,32 Source : EUROSTAT-COMEXT Italy also imports limited quantities of frozen gilt-head seabream (297 tonnes in 2015), provided by the Netherlands (196 tonnes), Greece (44 tonnes), Turkey (28 tonnes) and Spain (21 tonnes). 12

15 2.2.4 Supply balance The figure below gives an overview of the structure of the Italian market. Figure 3 The Italian supply balance for fresh gilt-head seabream (2015) Aquaculture production tonnes Fisheries 900 tonnes Import tonnes Supply tonnes Export tonnes Apparent consumption tonnes (512 g per capita) Source: EUMOFA based on Eurostat and FEAP data Fresh seabream is predominantly sold in the fish counters of the supermarkets. In 2010, the market share of large scale distribution was much bigger for seabream (66%) than for the whole of fresh fish (59%). Indeed aquaculture products fit, much more than fisheries products, the needs of supermarkets, which are looking for steady supply all along the year, stability of prices and traceability. The situation has changed a little bit since then. Fresh seabream is still sold a little bit more than other fish species in supermarkets, but the difference is now very small. 13

16 Table 12 Places of purchase of the fresh seabream (volume) % All species Seabream All species Seabream Supermarkets 59,1 66,2 67,1 68,1 Fishmongers 28,9 22,1 24,3 24,0 Mobile shops and local markets 9,0 8,0 7,5 6,7 Other 3,0 3,7 1,1 1,1 Total 100,0 100,0 100,0 100,0 Source : ISMEA Figure 4 Places of purchase of fresh seabream in 2015 Source: ISMEA Large retailers market more than 2/3 of the volumes. They develop private labels on Italyfarmed products; Since Italian aquaculture production decreased in the last years (from tonnes in 2011 to tonnes in 2015 see table 3), the demand is met by imports or by a reduced export supply Segmentation of the market The market for seabream is segmented according to production method (aquaculture/fisheries), size, origin, quality, and, to a lesser extent, presentation Segmentation by production method The wild seabream market can be estimated at less than t, i.e. less than 3% of the total market. Local catches are complemented by some imports from Spain. 14

17 Wild species are viewed as superior to farmed species, more natural and of higher quality. This is reflected in the price which can reach up to 40 EUR/kg at retail level (compared to 9-17 EUR/kg for farmed seabream). The demand for wild seabream exists mostly in traditional channels (fishmongers) while large scale retailers generally focus on farmed seabream. Table 13 - Market segmentation: offer of fresh seabream in a major large-scale retailer (Esselunga) in July 2016 Product Packed (self service counter) Seabream - farmed Origin Greece (approx. 250 g/piece) Seabream - farmed Origin Italy Private quality label NATURAMA Approx. 500 g/piece Seabream fillets - farmed Origin Greece Approx g (2 fillets) Aromatized seabream fillets - farmed Origin Greece Approx. 300 g (2 fillets) Unpacked (fresh fish counter) Large seabream - farmed NATURAMA (origin Tuscany) Large seabream - wild Caught in the Western Mediterranean Source: surveyed by EUMOFA Consumer price (EUR/kg) 10,90 16,80 special offer : 19,80 (normal price : 24,76) special offer : 22,30 (normal price : 27,88) 17,50 33,90 The wild seabream caught and landed by the Italian fishermen is paid around 13 EUR/kg to the producer, that means around twice the price paid to the Italian farmer. Table 14 - Landings of gilt-head seabream (Sparus aurata) in Italy t EUR EUR/kg , , , , , , , , n.a. n.a. Source : Eurostat 15

18 In the auctions (first sale markets) the price of the wild seabream can vary from 4 to 28 EUR/kg, in connection with the size, the fishing technique and the volume landed. In 2015 the most frequent price (Civitavecchia in the table below) was between 15 and 19 EUR/kg. Table 15 First sale prices for wild seabream in some Italian auctions in the last three years Mercato Size Fishing technique Packaging Volume Min P Max P Volume Min P Max P Volume Min P Max P kg EUR/kg EUR/kg kg EUR/kg EUR/kg kg EUR/kg EUR/kg Ancona medium trawl plastic box 803 6,88 8, ,63 8, ,12 9,36 Ancona big trawl plastic box 486 7,23 10, ,04 11, ,08 14,44 Cesenatico medium trawl plastic box ,86 7, ,05 6, ,80 6,67 Civitanova Marche mixed trawl plastic box 233 5,29 7, ,88 7, ,62 9,20 Civitavecchia - trawl polystyrene box ,97 20, ,53 19, ,26 19,19 Corigliano Calabro - trawl polystyrene box ,84 15, ,50 15, ,00 12,50 Goro medium trawl plastic box 628 6,52 7, ,89 9, ,38 8,77 Livorno - trawl bulk ,63 20, ,56 28, ,16 22,56 Livorno medium trawl polystyrene box 88 8,96 10, ,52 16, ,36 15,37 Livorno big trawl polystyrene box ,91 18, ,47 26, ,85 25,93 Manfredonia medium trawl polystyrene box ,00 10, ,36 15,34 San Benedetto del Tronto medium trawl plastic box 929 4,12 7, ,39 6, ,76 6,39 Viareggio 0,5-1 kg entangling nets polystyrene box 88 27,91 27, ,71 26, ,59 28,59 Source : ISMEA Segmentation by size Italian farmers try to stand out from Greek and Turkish competitors by producing bigger sizes. These competitors generally produce small fish (mainly g). Italian seabream farmers achieve better prices and create a more positive image when offering larger fish. Compared to a g seabream, the price premium is about 0,60 EUR/kg for a g fish, 1,80 EUR/kg for a g and 3,40 EUR/kg for a seabream above 800 g. Table 16. Ex-farm price of farmed gilt-head seabream in Italy in September 2016 Size North-West North-East Centre South and Islands g 6,60 6,60 6,80 6, g 7,30 7,30 7,50 7, g 8,60 8,40 8,80 8,50 > 800 g 10,20 10,20 10,60 10,00 Source : ISMEA Segmentation by origin Seabreams of Italian origin are selling at a premium, compared to Greek products, as can be seen in ESSELUNGA s offer of fresh seabream (table 13). 16

19 But this premium is mainly connected to the size, since Italian seabream is generally marketed at sizes bigger than Greek fishes, as explained above. Turkey and Malta also supply low/average quality and small sizes 8,9. Spain and France are selling higher quality and bigger sizes (and a part of wild seabream in the export volume also partly explains the higher average price); this represents a niche market. The products of Italian origin represent a quarter of the total consumption, while low-priced products imported from Greece, Turkey, Malta and Croatia, represent more than 70%. Table 17 Segmentation of the Italian market by origin in t EUR/kg Market share Italy % Greece ,22 46% Turkey ,84 15% Croatia ,71 6% Malta ,21 4% Spain 900 9,41 3% France ,69 1% Other 600 6,02 2% Total Source : elaboration EUMOFA The price differentiation between Italian production and import is to be found at the wholesale level, as it is shown in the tables below. Origin Size System Table 18 Prices of fresh seabream in the Wholesale Market of Milan (EUR/kg) P. min P. max P. min P. max P. min P. max P. min P. max P. min P. max P. min P. max P. min P. max P. min P. max P. min P. max P. min P. max P. min P. max National > 800 gr Fisheries 19,28 26,45 16,79 24,78 18,00 25,64 17,76 24,00 12,08 18,33 14,40 19,94 18,00 22,00 18,00 22,00 18,00 22,00 18,00 22,00 18,00 22,00 National gr Farming 8,02 9,61 7,55 9,72 4,60 11,50 4,45 8,17 4,32 5,21 4,76 6,68 7,50 8,50 6,78 7,68 5,17 5,56 5,25 5,57 5,25 5,57 Import gr Farming 5,27 6,62 4,47 5,33 4,50 5,40 4,50 5,40 4,55 5,62 4,48 5,35 5,35 5,94 4,91 5,92 5,18 7,97 5,10 6,50 5,20 6,30 Import gr Farming 4,41 5,53 4,61 5,02 4,60 5,00 4,23 4,93 4,13 4,89 4,38 5,22 4,83 5,25 4,83 5,25 4,83 5,25 4,60 8,49 4,72 12, Source : ISMEA 8 There is no direct link between size and quality (although a minimum length of breeding is necessary to guarantee a minimum level of quality), but there is a segmentation of the market based on the size/quality couple and the market often associates, maybe wrongly, small sizes and low quality. 9 As it is substantiated in Globefish ( European Seabass and Seabream Report March 2015) concerning Italy: Many retailers use three product categories: the large volume and low-priced Turkish origin, Greek product as standard, and Italian product, which is somewhat larger sized, as the top product. 10 To compile this table, the following assumption has been made: out of the tonnes of gilt-head seabream exported by Italy according to COMEXT statistics, 800 tonnes are coming from Italian farms and the rest is reexport from fish imported from Greece (1.500 tonnes), Turkey (700 tonnes) and Malta (300 tonnes). 17

20 Figure 5 Evolution of minimum prices of fresh farmed seabream ( g) in the Wholesale Market of Milan (EUR/kg) Figure 6 Evolution of maximum prices of fresh farmed seabream ( g) in the Wholesale Market of Milan (EUR/kg) While minimum and maximum wholesale prices of imported seabreams observed in the Wholesale Market of Milan follow a quite regular trend, prices of domestic products follow different patterns: price increases in the beginning of the period surveyed, followed by sharp price falls in , as a consequence of the overproduction crisis, and strong increases in In the last years ( ), import and national prices tend to converge. This confirms that Greece and Turkey are making the price on the Italian market, at least for the g segment. 18

21 Segmentation by labels / brands The major large-scale retailers have developed private labels on aquaculture products. The market leader, COOP Italia, has for instance 7 aquaculture species under this scheme: rainbow trout, seabass, seabream, salmon, turbot, tropical shrimp, striped bass, with specifications in particular on traceability, sustainability and animal welfare. For seabream COOP has selected a few suppliers, who all produce in sea cages. In December 2016, the g seabream under the COOP brand 11 was sold 14,90 EUR/kg, while the g seabream of Greek origin without COOP label was sold at 10,90 EUR/kg (and even 7,90 EUR/kg in special offers). ESSELUNGA includes farmed seabream in the offer under its NATURAMA 12 quality scheme of the retailer. In July 2016 the NATURAMA seabream of Italian origin was sold at a price 54% higher than the Greek seabream (16,80 vs. 10,90 EUR/kg). Italian products also generally have a higher unit weight (500 g for the Italian product vs. 250 g for the Greek seabream). The NATURAMA seabream is farmed only in Italy (in Sardinia or in Orbetello) and is monitored for traceability and for respect of the scheme s provisions Segmentation by presentation One of the main features of the Italian seabream market is that it is mostly fresh-based with large price swings (as shown in figures 5 and 6). By tradition Italian consumers are consumers not only of fresh fish, but also of whole fish, especially for seabream. The market is therefore characterized by limited value addition and limited product development. Filleted products have recently started to develop, and most large-scale retailers offer fillets of seabream. For instance in July 2016, ESSELUNGA sells fillets of seabreams (seabreams are filleted in Greece, where filleting costs are lower than in Italy) at 24,76 EUR/kg 13 (19,80 EUR/kg in special offers) and AUCHAN also sells fillets of seabreams at 28,29 EUR/kg. ESSELUNGA also proposes aromatized seabream fillets, sold at 27,80 EUR/kg in July 2016: fillets with a slice of lemon, halved tomato cherries, sea salt, rosemary, garlic, sage, juniper, oregano, parsley and aromatic plants. 11 Fish under COOP brand are subject to high quality and safety standards: the farming process is submitted to a double certification by two autonomous bodies, who certify the control of the supply chain, the absence of animal ingredients of terrestrial origin in the feed, the Italian origin for seabream, seabass and trout, the absence of GMOs, the traceability, the absence of colourings, and the fat content for seabream, seabass and trout fillets (source: Coop Italia). 12 Naturama, ESSELUNGA s quality assurance brand, is used for fresh meat, fish, fruit and vegetables and eggs. It focuses on quality and traceability and introduces quality control schemes in all production phases. 13 See table

22 2.3 Overview of the main EU markets Greece Greece has the biggest seabream production in the EU (and in the world) and is the exporter n 1 but it has also a strong domestic market with a per capita consumption approaching 3 kg in Figure 7 Greek apparent market for seabream in 2015 Production tonnes Import 500 tonnes Supply tonnes Export tonnes Apparent consumption tonnes (2,846 kg per capita) After the overproduction crisis of the year 2008 (record year, with a production of tonnes) the Greek production of farmed seabream decreased to reach tonnes in 2011 according to FEAP data. The sector, which is stable in capacity as there have not been any new licenses since 2006, has recovered after the crisis, thanks to strong demand, higher prices and market stabilization. Anyhow the production is on a decreasing trend in the last years ( ) 14. Greece provides the two thirds of the EU seabream production and exports to tonnes per year. The main destinations are Italy (49% of total volumes exported by Greece in 2015), France (15%), Portugal (12%) and Germany (6%). 14 Production data differ according to sources, but the trends are the same: -13% for FEAP for the years , -16% for Eurostat. 20

23 Table 19 Greek exports of fresh seabreams (CN and, from 2012, CN ), in tonnes Year ITALY SPAIN FRANCE PORTUGAL GERMANY UNITED KINGDOM NETHERLANDS Other TOTAL Source : Comext After the heavy fall of 2008 (the price fell from 3,97 EUR/kg in 2007 to 3,23 EUR/kg in 2008), the average export price of the Greek seabream recovered: it rose to 3,65 EUR/kg in 2009 and reached a new peak in 2011 (5,12 EUR/kg) before coming back to more normal levels in 2012 (4,28 EUR/kg) and 2013 (4,10 EUR/kg). In 2014 and 2015 the export price increased again following a reduction in the Greek production (from tonnes in 2013 to tonnes in 2014 and tonnes in 2015). In 2016 the price started to decrease again to 5,39 EUR/kg in July, 5,01 EUR/kg in September and 4,43 EUR/kg in November. Figure 8 Evolution of the average export price of the fresh Greek seabream (EUR/kg) Source: Comext Spain The Spanish market is the third-largest after Italy and Greece. The apparent consumption of seabream registered a strong decrease in the early 2010s, falling from tonnes in 2010 to tonnes in 2012, and remained at this level since then. Unlike the Italian market, the Spanish market is mainly supplied by the domestic production. 21

24 Figure 9 Spanish apparent market for seabream in 2015 Production tonnes Import tonnes Supply tonnes Export tonnes Apparent consumption tonnes (388 g per capita) The Spanish seabream farming production was exceeding tonnes in the late 2000s, peaking at tonnes in After a strong decrease in , the production has stabilized at a level slightly over tonnes in the years (see table 3). Two companies, CULMAREX and TINAMENOR Group, control 60% of the Spanish production. Spain mainly exports to its two neighbours, Portugal (3.100 tonnes in 2015) and France (1.400 tonnes). Sales to Italy are limited (900 tonnes). Imported seabreams (6.400 tonnes in 2015) are supplied by Turkey (67% of the total) and Greece (27%). Market prices recovered in and average wholesale prices of farmed seabream reached 5,69 EUR/kg in Mercabarna in 2011 (same level as farmed seabass). In 2012 seabream prices decreased to 4,94 EUR/kg (-13% compared to 2011) while prices for seabass kept rising to reach 6,51 EUR/kg (+14%). From 2012 trends have reversed: seabream prices continuously increased to reach 6,04 EUR/kg in 2015 and thus to be slightly above seabass prices (5,97 EUR/kg in 2015). 22

25 3 PRICES ALONG THE SUPPLY CHAIN This chapter proposes to analyse prices and trends at the various stages of the seabream supply chain in Italy, with the objective to set the framework for price transmission analysis (chapter 4). 3.1 Price information sources While chapter 4 relies on data gathered through direct interviews with stakeholders, chapter 3 lists the consistent sources regularly accessible and the content of the information provided by each of them. Supply chain stage First sale Table 20 Price information sources on the seabream supply chain in Italy Type of price Frequency Source Producer prices (aquaculture, ex-farm) Monthly ISMEA Yearly EUROSTAT Producer prices (fisheries) Daily, weekly, monthly, yearly ISMEA Import Import price Monthly, yearly COMEXT Wholesale Wholesale price (in two major markets: Milan, Rome) Retail price (all channels) Daily, weekly, monthly, yearly Daily ISMEA MIPAAF (Ministry of Agriculture) - service suspended in 2013 Retail Retail price (all channels) Weekly, monthly, yearly EUMOFA (EUROPANEL) Retail price (large-scale retailers) 3.2 Producer prices Monthly API (service suspended, data until September 2013) Source: EUMOFA ISMEA (Istituto di Servizi per il MErcato Agricolo alimentare) collects price data from a sample of about 70 aquaculture companies on a monthly basis for three major species species (trout, seabass, seabream) and another seven (sturgeon, carp, eel, catfish, mullet, clam and mussel). As can be seen in Table 16, data for seabream are broken down by region (North-West, North-East, Central Italy, South and Islands) and by size category ( g, g, g, > 800 g). 3.3 First sale prices First sale prices are provided by ISMEA, on a daily, weekly, monthly and yearly basis, for wild seabream. Prices collected by ISMEA in auction halls cover 11 mercati di produzione or production markets (Aci Trezza, Ancona, Cesenatico, Civitanova Marche, Civitavecchia, Corigliano Calabro, Goro, Livorno, Manfredonia, San Benedetto del Tronto, Viareggio) and 4 mercati misti or mixed markets (Cagliari, Catania, Chioggia, Molfetta). 23

26 The data provided are differentiated by origin (local, regional, national), by production method (fisheries, aquaculture), and by weight category. 3.4 Import prices Import prices are provided on a monthly and yearly basis by COMEXT (as can be seen in Table 11 for yearly prices). 3.5 Wholesale prices Wholesale prices are provided by ISMEA for two wholesale markets (Milan and Rome) on a daily, weekly, monthly and yearly basis, as can be seen in Table 18 for Milan. The data provided are differentiated by origin (national, import), production system (fisheries, aquaculture), and weight category. 3.6 Retail prices MIPAAF The Italian Ministry of Agriculture (MIPAAF) used to monitor the daily retail prices of a basket of 84 major food products, out of which 12 fish species (farmed seabream was one of them). Consumers had access to this service, called SMS Consumatori, and could request prices by SMS. This service has been stopped in 2013 for budget reasons. 24

27 Figure 10 Example of data on farmed seabream - SMS Consumatori Screenshot

28 3.6.2 API The Association of Italian Fish Farmers (API) monitored the consumer prices in the large-scale retail ( grande distribuzzione ) for 10 aquaculture products (6 trout products + Italian seabream + imported seabream + Italian seabass + imported seabass). The prices issued (on API website) were average consumer prices surveyed in the points of sale of 19 retail chains in a two week period. This service has also been suspended in 2013 for budget reasons. Table 21 shows the last report. Table 21 Average consumer prices in the large-scale retail in the period September 2013 Group Seabream Seabream Import Italy AGORÀ NETWORK - 9,50 BENNET 10,05 11,40 C3-8,90 CATENE INDIPENDENTI - 7,50 CONAD 8,68 14,32 COOP ITALIA 9,62 13,73 DESPAR SERVIZI 9,44 14,22 ESSELUNGA 9,84 13,74 FINIPER 8,94 13,69 GRUPPO AUCHAN 8,81 12,41 GRUPPO CARREFOUR IT 7,66 14,05 GRUPPO LOMBARDINI 10,90 - GRUPPO PAM 9,06 13,90 GRUPPO SUN 11,20 10,70 IL GIGANTE 9,90 18,80 REWE 9,15 14,95 SELEX COMMERCIALE 8,10 15,88 SIGMA 8,75 12,23 SISA - 12,40 Source : API ISMEA Until the end of 2015, ISMEA was collecting retail prices of food products (including fishery and aquaculture products) through a collaboration with large-scale retailers (Carrefour, Auchan, Coop, Conad ) who transmitted prices automatically to ISMEA on a weekly basis. This collection has been discontinued because of its high cost. 26

29 3.6.4 EUMOFA EUMOFA provides weekly and monthly data on consumer prices, provided by Europanel. Table 22 - Monthly consumer prices in Italy by main commercial species in 2016 Main commercial species Month 2016 / 01 Month 2016 / 02 Month 2016 / 03 Month 2016 / 04 Month 2016 / 05 Month 2016 / 06 Month 2016 / 07 Month 2016 / 08 Month 2016 / 09 Month 2016 / 10 Month 2016 / 11 Month 2016 / 12 Clam 8,34 8,34 8,16 8,75 8,74 8,67 8,47 8,21 8,40 8,66 8,12 8,94 Mussel 2,31 2,36 2,45 2,35 2,41 2,41 2,37 2,30 2,29 2,43 2,47 2,38 Cuttlefish 10,24 9,43 10,03 10,28 10,08 9,59 10,20 9,58 9,82 9,43 8,49 9,23 Octopus 9,15 9,86 9,83 10,10 9,90 10,05 10,06 10,24 9,72 9,60 9,38 9,63 Squid 10,14 10,15 10,08 10,55 9,76 10,04 9,58 9,91 10,00 10,55 10,11 10,22 Cod 9,01 9,03 9,40 9,63 9,15 8,87 8,64 8,63 8,66 9,71 9,33 9,03 European seabass 9,63 9,46 9,14 9,09 9,37 9,23 9,19 9,21 9,11 8,96 8,78 9,00 Gilt-head seabream 8,91 8,72 9,15 9,01 9,19 8,97 9,14 8,85 8,47 9,21 8,29 9,28 Salmon 12,06 11,64 11,28 11,47 11,84 12,03 11,81 11,99 11,19 11,30 12,18 11,93 Anchovy 5,96 5,75 5,55 5,37 5,37 5,06 4,92 5,31 5,42 4,92 5,41 5,70 Source: EUMOFA based on EUROPANEL The prices reported by Europanel are low compared to the prices of Italian seabream analysed in the following chapter, for two reasons: o the dominant weight of low-price import seabreams (seabreams imported from Greece, Turkey, Croatia and Malta at an import price close to 5 EUR/kg represent 71% of the market), o they take into account the many special offers made by large-scale retailers (up to 30 weeks a year). 27

30 4 PRICE TRANSMISSION IN THE SUPPLY CHAIN Chapter 4 complements the data of chapter 3 with information obtained through direct interviews with stakeholders. Table 23 Costs and margins for the fresh farmed seabream in the large-scale retail in Italy (July 2016) EUR/kg Purchase price (to the producer) 6,60 Transport farm --> platform 0,40 Packaging 0,05 Labour cost 0,45 Delivered at platform 7,50 Ditribution cost 0,38 Weight loss 0,07 Shrink 0,13 Labour cost (fish counter) 2,01 Operating cost (fish counter) 1,68 Net margin 1,64 Average selling price, exclusive of VAT 13,41 VAT 1,49 Average selling price 14,90 Source : elaboration by EUMOFA workteam from interviews with supermarket chains purchase managers in July 2016 for seabream gr origin Italy Assumptions : - cost of a box: 0,25 - weight loss: 0,5% - shrink: < 1% - labour cost (fish counter): 14-15% - operating cost (fish counter): 12,5% - VAT: 10% Figure 11 illustrates the price transmission in the supply chain for fresh seabream. This figure has been drawn up from interviews of fish purchase managers of the GDO (large retailers) in July

31 Figure 11 - Price transmission for fresh farmed seabream sold in Italy large retailers (July 2016) EUR/kg Source : interviews of fish purchase managers of the GDO (large retailers) in July 2016 o cost of a box: 0,25 EUR o weight loss: 0,5 %, o shrink: < 1 % o labour cost (fish counter): % of selling price, o operating cost (fish counter): 12,5 % of selling price, o VAT: 10% o Selling price: 14,90 EUR/kg. Contacts with the large-scale retail (December 2016) indicate that the average consumer price for 2016 has been lower than the price in the figure above, due to promotional pressure. One major largescale retailer indicates an average retail price of 12,59 EUR/kg in 2016, because farmed seabream has been on special offer during 30 weeks. In this case the price paid to the farmers is 5% lower. This, together with a moderate retailer s margin, made possible an increase of volumes sold compared to The decision to use promotion is a commercial choice made by the retailer to counter the low prices of Greek and Turkish seabream. 29

32 5 ANNEXES 5.1 Sources used - EUMOFA - EUROSTAT - FAO - FEAP - API (Associazione Piscicoltori Italiani) - UNIMAR/MiPAAF (Ministero delle Politiche Agricole, Alimentari e Forestali) - ISMEA (Istituto di Servizi per il MErcato Agricolo alimentare) - AUCHAN - ESSELUNGA - COO.P.AM - API (Associazione Piscicoltori Italiani) 30

33 Gilt-head seabream in Italy is published by the Directorate-General for Maritime Affairs and Fisheries of the European Commission. Editor: European Commission, Directorate-General for Maritime Affairs and Fisheries, Director- General. Disclaimer: Although the Maritime Affairs and Fisheries Directorate General is responsible for the overall production of this publication, the views and conclusions presented in this report reflect the opinion of the author(s) and do not necessarily reflect the opinion of the Commission or its officers. European Union, 2017 Catalogue number: KL EN-N ISBN: DOI: / Reproduction is authorized, provided the source is acknowledged. FOR MORE INFORMATION AND COMMENTS: Directorate-General for Maritime Affairs and Fisheries B-1049 Brussels Tel:

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