Industry profit flounders as the cost of inputs rises
London, United Kingdom (PRWEB) October 28, 2012
The Seafood Processing industry in the United Kingdom struggled over the five years through 2012-13, after coming under increasing pressure from high raw input prices, volatile catch volumes and the recession. Industry revenue is expected to grow by only 1.9% per annum over the period, to a revenue figure of £2.98 billion in 2012-13. IBISWorld estimates that industry revenue will contract by 0.4% in 2012-13, as many operators will undergo restructuring and consolidation.
Seafood catch volumes in the United Kingdom have decreased significantly, causing undersupply to seafood processors and higher prices. According to IBISWorld industry analyst Patrick Ross, “as purchases of seafood are the highest single cost for the industry, this effect has squeezed profit margins to breaking point, as processors are forced to keep their selling price low to compete with cheaper, more voluminous imported produce”. The industry is becoming increasingly dominated by large scale supply contracts issued by supermarkets, which have encouraged processors to consolidate operations with the aim of cutting costs and improving competitiveness in such tough market conditions. This difficult operating environment was exacerbated by the declining economic conditions, which discouraged consumer spending, with fresh seafood suffering due to its status as a luxury item for many people.
Ross adds, “the future of the industry has been thrown into doubt because of these problems, with overfishing regulation and import competition set to plague domestic supply of processed seafood over the next five years”. Revenue is expected to grow by only a meagre amount over the five years to 2017-18. Development of aquaculture fish farming operations will help close the gap between supply and demand for seafood in the long-term, but this will do little to alleviate the undersupply and subsequent increased seafood costs in the short-term.
The Seafood Processing industry has a low level of market share concentration, as the top two players in the industry account for only 31.4% of total industry revenue. Major companies include Young’s Seafood and Icelandic Group UK.
For more information on the Seafood Processing industry, including latest industry trends, statistics, analysis and market share information, purchase the full report from IBISWorld, the nation’s largest publisher of industry research.
IBISWorld industry Report Key Topics
Industry operators process fish, molluscs, crustaceans and other seafood. This industry also includes establishments known as floating factory ships that are engaged in shipboard processing of seafood. The industry excludes processing and preserving fish on vessels engaged in fishing, processing of whales and production of oils and fats from marine material. Prepared frozen fish dishes and manufacture of fish soups also fall outside of the scope of this industry.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalisation & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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