UK seafood processing market led by Young's Seafood and Icelandic Group UK

Press release   •   Aug 15, 2013 14:37 BST

The UK seafood processing industry has been forecast to increase at a compound annual growth rate (CAGR) of 0.3% over the next five years, increasing from a value of £2.7 billion in 2013-14, to reach a value of £2.8 billion by 2018-19.

The industry has struggled over the five years through 2013-14 after coming under increasing pressure from high input prices, volatile catch volumes and the sustained economic recession.

Seafood catch volumes in the United Kingdom have decreased significantly, pushing up prices and meaning seafood processors are undersupplied.

In 2004 there were 573 processing units and 18,180 people working in them. By 2012 - just over a year ago - that figure had fallen to 325 units and 11,186 employees. The sharpest decline took place between 2010 and last year when almost 60 units closed down.

As purchases of seafood are the highest single cost for the industry, this effect has squeezed profit margins to breaking point because processors are forced to keep their selling prices low to compete with cheaper, more plentiful imported produce.

The level of market share concentration in the UK seafood processing industry is considered low, as the top two players in the industry account for only 28.1% of total industry revenue. While the industry remains fragmented for now, the present trend is towards consolidation, and market share concentration is increasing year on year.

The influence of supermarkets is such that far larger supply contracts are up for grabs. This has encouraged firms to unite production in order to pursue economies of scale and scope. Major companies include Young's Seafood and Icelandic Group UK.

These problems, overfishing regulations and import competition are set to plague domestic processed seafood supplies over the next five years.

The industry will struggle to overcome the effect of diminishing wild fish stocks and a higher level of imports. The development of fish farms will help close the gap between supply and demand for seafood in the long term, but this will do little to alleviate shortages and high seafood prices in the short term.

For more information on the UK seafood processing market, see the latest research: UK Seafood Processing Market

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