Consequences of the rising price of raw materials for producers in the fishing industry and the canning and freezing sectors

Subject: Consequences of the rising price of raw materials for producers in the fishing industry and the canning and freezing sectors

The prices of raw materials have shot up in recent months, affecting all levels of European industry. This widespread crisis is having an impact on the fishing industry, pushing up the prices of the raw materials used in packaging. It’s also affecting logistics in the industry, with sea freight rates for containers having increased exponentially. Electricity and natural gas prices have increased as well, and this too is having an impact on the fish supply chain.

This situation is getting worse by the day, with no end in sight. It is having an adverse impact on business structures and on price volatility in the markets, threatening the solvency of the entire industry.

In the light of the foregoing:

1. What impact is the lack of raw materials in the EU having on all levels of the fishing industry?

2. How does the Commission think the fishing industry is being affected by the shortage of raw materials and the rise in prices? What is the Commission going to do about it?

Answer given by Mr Sinkevičius on behalf of the European Commission (24 January 2022)

1. The latest available data confirm that the EU catching sector in 2019 remained overall profitable with gross profits of EUR 1.2 billion. It projects similar profitability levels in 2020, despite the effects of COVID-19 on the fleet and fish markets. Recent increases in raw materials and input costs in general are being increasingly reported by industry stakeholders. They do not yet substantially impact retail prices because, according to indications from the European Market Observatory for fisheries and aquaculture (EUMOFA), these have remained high for some time and should allow to absorb input cost increases at the different steps of the value-chain. However, the sector faces two potential risks. First, the lack of available raw material combined with steady demand could lead to supply bottlenecks in case certain steps of the logistic chain fail to meet the demand (e.g. shortages of tin for the canning industry); and second, decrease in retail prices as a result of a drop in demand stemming from lower consumers’ purchasing power. These could compress margins of operators upstream in the value chain and therefore limit their capacity to offset rising input costs.

2. It is still too early to measure the actual impact of this development, but the Commission will require EUMOFA to monitor developments more closely when market data are available. Such analysis should be available in the second half of 2022.