The price of fish

Fish prices have been soaring all round the world - and more in Britain than in other similar countries. In 2010, the price of fish climbed 10.8% in the UK, compared with just 1.8% in France. So what explains the rapid rise in cost, and can anything be done about it? Simon Wilson reports.

Fish prices have been soaring all round the world - and more in Britain than in other similar countries. Why? Simon Wilson reports.

How much have prices risen?

According to the Consumer Price Index, the price of seafood has risen 11.5% in the past year in Britain, a greater increase than for any other type of food. Last month, the Office for National Statistics put the rise even higher, at 15.8%. So shoppers and diners are paying more for everything from tinned tuna to sea bass. One factor causing the increase is the rising cost of fuel. The price of diesel has soared by 18% in the past year, meaning higher fuel costs for fishing boats, plus there's been a surge in the cost of transporting the catch by road. But that's not the only cause.

What else is to blame?

According to a survey by UBS last month, as supermarkets attempt to boost margins, the price of food is rising far more rapidly in Britain than in other similar nations. UBS found that food prices in Britain rose 4.9% in the year to November 2010, compared to 3.6% in Germany, 1.8% in the euro area as a whole, and just 1.5% in the United States. For fish, it found a price rise in 2010 of 10.8%, compared to 1.8% just across the sea in France.

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What explains this rapid rise in cost?

The UBS economists found that "the UK food retail system is demonstrably passing on higher prices than are the food retail systems of other countries". This gap was especially marked for oils/fats and sugars. While in the past investigations have found that the sector is competitive, it is hard not to conclude that the UK's notably concentrated market (the top five supermarkets control 85% of the food market, compared to just 30% in America) matters when it comes to determining prices. But although transport costs and retailers defending their margins are local factors, the main reason the price of fish in Britain is so high is that it's soaring all over the world. In America, for example, Producer Price Index (PPI) figures from the US Department of Labor show that the price of fish rose by a fifth over the course of 2010. While temporary and/or local factors are obviously at work, the core reason why global fish prices are rising is straightforward: a long-term surge in demand and slump in supply.

Who's eating all this fish?

Rising prosperity, the global population boom and a surge in demand for healthy foods mean that the world eats five times as much fish as it did in 1950. Here in Britain, sales of fresh fish have grown steadily, and overtook sales of fresh poultry for the first time in 2008 urged on by the Food Standards Agency, which recommends everyone eat two portions of fish a week, including one oily fish. In Scotland, Holyrood's "Eat More Fish" campaign presents devouring seafood as nothing less than a patriotic duty. Worldwide, per-capita consumption of seafood now stands at 17 kg per person. The region where people are keenest of all on fish east and southeast Asia has seen a huge growth in prosperity over the past half century. South Korea, for example, has the world's third-biggest fishing industry and it needs it: they eat an average of 55kg a year.

What about supply?

It's sinking. The global fish catch peaked at least ten years ago. Some analysts put the peak year at the turn of the century, with a peak catch of 63 million tonnes. Others date it earlier. Marine scientists estimate that more than 70% of world fish stocks are either fully exploited or in decline. The most well-known case in Britain is cod: according to the Marine Conservation Society, the total mass of cod in the North Sea has slumped from 250,000 tonnes in 1970 to 37,000 tonnes in 2007. That's not too surprising, given that 93% of fish caught in that sea are killed before they can breed. But cod is far from alone. In British waters there are 22 species of wildlife considered to be facing the threat of global extinction. Once-abundant species, such as common skate and Atlantic halibut, are listed as critically endangered and only eight of the 47 fish stocks found around the British Isles remain in a healthy state. It's a similar story in other waters.

Why are fish stocks so low?

Environmentalists point to pollution and climate change cutting the amount of oxygen in the oceans. But the biggest cause is overfishing as technology improves and trawlers become ever bigger and faster and the whole process more industrialised. The world's fishing industry has enough nets to take in the global catch four times over. The practice of bottom trawling depletes stocks and ultimately destroys fisheries. Typically, it involves two boats dragging a vast, cone-shaped, weighted net along the ocean floor at depths of up to two kilometres. This not only catches edible fish, it also damages the seabed and multiple forms of sealife.

Can fish stocks recover?

It's possible. For example, fish stocks in the North Sea trebled during World War I, when large-scale commercial fishing was disrupted. More recently, a Europe-wide moratorium on herring fishing, introduced in 1977, helped the species recover. In other cases, however such as vanishing cod at the Newfoundland Grand Banks, despite cod fishing being banned there since 1992 the point of extinction has already passed. As Charles Clover points out in his book The End of The Line, consumers switching en masse from one species to another (cod to pollack, say) just moves the problem down the chain. The species of fish sold in supermarkets have changed considerably over the past 15 years. More than half of them are now farmed another reason why we can expect fish to become even more expensive than they already are.

Simon Wilson’s first career was in book publishing, as an economics editor at Routledge, and as a publisher of non-fiction at Random House, specialising in popular business and management books. While there, he published, a bestselling classic of the early days of e-commerce, and The Money or Your Life: Reuniting Work and Joy, an inspirational book that helped inspire its publisher towards a post-corporate, portfolio life.   

Since 2001, he has been a writer for MoneyWeek, a financial copywriter, and a long-time contributing editor at The Week. Simon also works as an actor and corporate trainer; current and past clients include investment banks, the Bank of England, the UK government, several Magic Circle law firms and all of the Big Four accountancy firms. He has a degree in languages (German and Spanish) and social and political sciences from the University of Cambridge.