EU fish and seafood import ratio creeps ever higher

by Thomas Jensen
Katarina Sipic

AIPCE-CEP works to optimise condition for EU fish traders and processors

This article was featured in Eurofish Magazine 1 2024.

AIPCE-CEP represents the European fish and seafood processing and trading sector, an industry with a turnover of EUR31bn spread over 3,300 companies with some 116,000 employees across the EU. The organisation safeguards its members’ interests at a time of challenging geopolitical developments such as the war in Ukraine and the aftermath of Brexit. The EU is the world’s biggest importer of fish and seafood products. These are processed and sold within the EU or reexported creating a dynamic and global market. However, the EU is highly dependent on imports making it vulnerable to pressures over which it may have little control. And this dependency has been increasing over the years. Katarina Sipic, Secretary General of the organisation, speaks here about some of the issues the sector faces and how AIPCE-CEP contributes to resolving them.

EU Fish Processors and Traders Association (AIPCE) and European Federation of National Organizations of Importers and Exporters of Fish (CEP) were established in 1959 and collaborate based on a Co-operation Agreement, creating AIPCE-CEP. The association represents 19 EU National Associations from 12 Member States and 3 National Associations in Third countries (the UK, Norway, Morocco). What are the main benefits for these stakeholders from being members?

AIPCE and its sister organisation CEP are among the longest established of all EU trade associations, with a long track record of representing member interests to the EU institutions and other relevant bodies, including the UN Food and Agriculture Organisation (FAO) and regional fisheries organisations. Together they provide a strong collective voice for the processing and trading sectors. Our role has grown exponentially with the regulatory dynamics in ­Brussels in the recent years, notably following the establishment of the Common Fisheries Policy. Through our component national associations we have a very wide reach across all major commercial interests and provide a forum for the exchange of views and expertise on issues of shared concern, for example in relation to sustainable stock management, access to raw materials, consumer information, regulation of Illegal, Unreported and Unregulated (IUU) fisheries, traceability and corporate due diligence. We are in the process of producing an overarching Sustainability Manifesto looking at the reduction of adverse environmental and climate impacts across seafood supply chains.

We are aware that regulations concerning seafood and fish industry are constantly changing to ensure safe, healthy, and nutritious seafood while protecting consumer interests. Robust safety assessments and regulations are necessary to minimize risks and develop technologies in a socially acceptable way. What is role of AIPCE-CEP in this process and how it is contributing to its implementation?

Product safety, traceability, labelling and wider consumer information are critical concerns for all our members. Equally important are responsible sourcing, efficient processing, and the promotion of fair and ethical labour practices across supply chains. Our role is to promote best practices in this respect and work towards ensuring the rules and regulations that allow for innovation in technologies that can improve safety, the competitiveness of the industry and bring stakeholders together.

EU sanctions on Russia and Russian countersanctions prevent European exporters from supplying goods to Russia and block the import of Russian raw materials into Europe. What impact have these measures had on the EU fish processing industry and how has it responded? How does AIPCE-CEP assist its members in these circumstances?

Geopolitical developments impact business and supply chains. This is one of the market parameters beyond our control. Specifically concerning Russia, the sector will face new challenges from January 1, 2024, when we lose preferential tariffs on raw materials of ­Russian origin. The EU northern market relies heavily on Russian Alaska Pollock, for which there is no equivalent alternative, as well as Cod. This is expected to have a significant impact on the industry in 2024. Furthermore, there are vessels that have not yet been approved by the EU. We need to work on solutions. For a sector that relies on external sources of raw material, up to 68% according to data from 2022, these are serious concerns. We try to engage with EU institutions in order to mitigate this impact. This has proved to be a challenging task.

Fraud in the global seafood industry is widespread with some estimates of incorrectly labelled fish being as high as one in three. What does AIPCE-CEP know about the extent of this issue in the EU and what measures does it take to minimise deliberate or accidental misreporting of fish?

The harmonized implementation of EU regulations, rules, and guidelines and associated control measures at both Member State and EU level are vital for our sector. A level playing field in the market is essential for our businesses, the sector’s health and image. Globally, we work with complex supply chains and connections to economies that, in various instances, may not adhere or have the capacity to adhere to our established rules. Diplomatic efforts and investments in less developed economies are crucial for both regulatory and standards alignment. This remains a long-term concern, and significant efforts are continually invested in addressing it. We support the Commission with information relevant for free trade and other agreements that take these issues into consideration. We aim to exchange relevant information on international level to assist our businesses in operating optimally and in accordance with our standards on safety, ethical practices and care for the environment as best as possible. The EU has sound regulations and border controls and can be seen as a frontrunner in this respect.

The seafood processing industry varies greatly in terms of the size and sophistication of companies: from large, highly automated establishments to small family-run businesses, where the work is all done by hand. The challenges faced by the companies must also be very different. How does AIPCE-CEP equitably represent such diversity?

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Large and sophisticated companies play a crucial role in this context. They can set examples with practices that smaller businesses should be able to follow, at least as a form of guidance. SMEs in Europe count for 99,8% of all enterprises. Policy makers are aware of this. Our role is to champion and promote best practices and in parallel to ensure that EU legislations take account of the challenges posed by a lack of human resources or finances of small businesses. We advocate for providing tools to smaller companies to navigate the market, and we support any guarantee of help, such as smart loans or similar investments, for these businesses.

The use of environmental certification in the fish processing industry is growing as Europe increasingly focuses on sustainability. The variety of standards to which a product can be certified is confusing for companies and consumers alike. What is the AIPCE-CEP policy on environmental certification, and how does it encourage its members to invest in these labels?

Our role is primarily to provide information on the development of legislation in this respect, as well as to disseminate and exchange good practices. Additionally, our aim is to contribute to clarity and work towards the harmonization of rules in a market characterized, as you mentioned, by a wide variety of ­standards.

It is the market that will set the rules, prompted by consumer demand for environmentally friendly and ethically produced goods. The retail sector will seek assurances from suppliers that align with consumer demands. Therefore, more than encouragement, what is essential is assisting companies to afford certification and operate in alignment with regulations. Another important matter to consider here is the affordability of a final product.

What impacts have increased energy costs and higher interest rates had on the European fish processing sector? What measures are companies taking to reduce their consumption of energy? Have higher interest rates caused firms to defer investing in plants, machinery, and energy-saving? What will this mean for the industry in the long term?

In common with other food industry sectors, seafood companies have been heavily impacted by recent rises in energy, finance and other input costs. This has inevitably been reflected in lower trading margins, not least in order to assist consumers with cost of living pressures and to maintain market share. That in turn has impacted investment plans. The Commission demonstrated responsiveness and effectiveness in mobilizing financial aid to help companies weather the Covid-19 crisis and the consequences of the Russian aggression in Ukraine. This was very welcomed by our companies, especially the smaller ones. Overall, the post-COVID market for seafood has been encouraging, showing great potential. In the long run, crises should make us more resilient and, hopefully, better prepared to face adverse events in the future. Significant positive initiatives emerged from these crises, as for example focusing on mechanisms that enhance our food security and improve crisis management.

The European Commission is pushing for greater circularity in the economies of the EU Member States, whereby raw materials are used as completely as possible, and the generation of waste is minimised. How does this philosophy manifest itself in the European fish processing sector and how does AIPCE-CEP contribute to achieving these objectives?

Minimizing waste is a global priority, and waste management is a global issue. It should be a part of the responsible practices of any business or private individual. Circularity in economies has led to the creation of new products, the emergence of new market niches, and the generation of new jobs. It has been one of the driving forces for innovation. The challenges in view of new and smarter trends in the market persist for smaller businesses; how does a small business align to new and smarter trends with minimal resources? Our role is, once again, to champion and disseminate good practices and work to ensure that small businesses receive the necessary support, guidance, and investments to cope with and embrace changes and innovations.

What evolution in products and marketing has AIPCE-CEP noted over the last three years with reference to the fish processing sector? What strategies does AIPCE-CEP implement to foster innovation and adaptability within European fish processing companies?

The concept of sustainability, its implications, and the visible consequences of climate change have led to the most significant evolution in products and marketing. We are increasingly aware of our responsibilities in this regard and are more committed to driving sustainability across seafood supply chains. AIPCE is presently updating its sustainability manifesto in collaboration with some of the leading companies in this sector. While the costs associated with sustainability efforts are high, there is also a high level of awareness of their absolute necessity. The fact is there is little or rather no alternative to taking responsibility for our environment and respect of human rights. Then there are economic matters; maintaining profitability and competitiveness on a global scale is in a delicate ­balance and it is our concern to preserve this balance. Internationally, we compete for this protein. This is not to be underestimated. Either wild caught or farmed, seafood is the most internationally traded of all food products and a primary source of protein, with excellent nutritional values, for over 2 billion
people around the world, as well as a vital part of a healthy and affordable diet for many more.

While the processing industry is highly fragmented, its most important customers, the retail chains, are relatively consolidated. What impact does this difference have on negotiations between a processor and a supermarket? Can AIPCE-CEP play a role in strengthening the hand of a processing company during such negotiations?

As a trade association with strict competition compliance rules, it is not our role to become involved in individual commercial negotiations. But we are concerned with issues of fairness in supply chains and ensuring that markets are properly regulated. While SMEs are numerically the largest players, major processors operate at EU and international level and have considerable economic weight in their own right.

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