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Composition of the French seafood sector
The French fish and seafood market was estimated to be worth US$ 10 billion in 2015 and forecast to reach US$ 11 billion by 2020. France is the third-largest fish and seafood market in Europe, accounting for 12.56% of total European revenue in 2015 (Infinity Research, 2015a, p. 27).
France has a coastline of 18,000 km, representing 17% of the total EU-23 coastline (European Commission – Maritime affairs and Fisheries, 2016, p. 1). In total, it has 65 fishing harbours with access across the Atlantic Ocean, the Channel, the North Sea and the Mediterranean Sea (European Commission – Maritime affairs and Fisheries, 2016, p. 1).
In 2015, French fishing companies generated EUR 1.2 billion in landings income (Table 29). Processing companies generated a further EUR 3.8 billion in production revenues in 2016.
France maintained a significant trade deficit in fish and fish products of EUR 4.1 billion. While it exported approximately EUR 1.5 billion, it imported EUR 4.6 billion worth of fish and fish products in 2016.
With 67%, the majority of France’s fish imports originated from other EU member states. Its main import partners were the United Kingdom (13%), Sweden (11%) and the Netherlands (9%).
77% of France’s fish exports were to other EU countries. Its largest export partners were Spain (18%), Italy (16%) and Belgium (12%).
France had 6,835 registered fishing commercial fishing vessels in 2016, of which 83% were active. These vessels were registered to 5,961 enterprises. In 2015, 713 enterprises – 12% of all fishing enterprises – owned more than one vessel.
The fish catching segment employed approximately 6,865 FTE. The fish processing segment had almost twice as many employees, at 11,218 FTE.
The French fleet is highly diversified as it not only targets different species but also covers 103 types of vessels with different lengths and fishing techniques (European Commission – Maritime affairs and Fisheries, 2016, p. 1).
The French fish processing industry is highly diversified, as it covers a wide range of products (fresh and refrigerated fish fillets; the production of prepared dishes with fish, crustaceans and molluscs; smoked salmon; processing of crustaceans and molluscs; surimi; and canning) (STECF, 2015). Total processing production had a value of EUR 3.8 billion in 2015.
64% of the fish and fish products that enter the market in France is sold as fresh. Canned and frozen account for 13% and 16%, respectively. Three quarters of fish and fish products are sold through retail outlets, the remainder is sold through the food service sector. 84% of canned fish is sold through retail. Three quarters of fresh and frozen are sold through retail (see Figure 44).
Fresh fish is generally sold as unbranded (see Table 30). In contrast, approximately three quarters each of canned, frozen, and dried/smoked/salted fish and fish products are sold as branded, with the remainder of each product type sold as retailers’ own brands.
A key brand for fresh fish is Groupe Pomona with a market share of approximately 20% of the fresh segment. Findus (part of Nomad (UK)) is the market leader in the frozen fish segment with a market share of around 35% in France. In the canned segment, the Le Connétable brand of Chancerelle holds around 22% of the market, while Saupiquet (part of Bolton Group (Netherlands)) accounts for approximately 20%. Labeyrie Fine Foods holds a share of around 35% of the dried/smoked/salted fish segment in France, while MerAlliance (part of Thai Union (Thailand) accounted for approximately 22% of this segment (FFT, 2018).
Table 31 gives an overview of the producer organisations in France. Due to lack of data availability, the number of vessels and members is not provided.
This section provides an analysis of the company structures of five major French fish catching companies.
Figure 45 provides an overview of the Intermarché company structure. The company is part of the Les Mousquetaires group, which engages predominantly in food retailing. Intermarché has 2,400 retail outlets in France, Portugal, Poland and Belgium. In 2015, Intermarché, together with Netto (discounter chain also owned by Les Mousquetaires group), generated EUR 25.5 billion in turnover. Bricomarché and Brico Cash are also part of the Les Mousquetaires group, specialising in home equipment retail, while Roady and Poivre Rouge are a car accessories retail company and a restaurant chain, respectively (Les Mousquetaires, n.d.).
Scapêche (Société Centrale des Armements des Mousquetaires à la Pêche), a subsidiary company of Intermarché, is a fishing company which currently owns 22 vessels and operates in five different fishing zones (Atlantic Ocean, North East Atlantic, French Southern and Antarctic Lands, North, and West of Scotland) (Scapêche, n.d.). The company has a 14,600 gross annual fishing tonnage, which covers 65% of the Les Mousquetaires group’s needs (Les Mousquetaires, n.d.). COMATA, a subsidiary of Scapêche, present in French Southern and Antarctic Lands (TAAF), is a one vessel holding company (Kerguelen de Trémarec trawler) (Scapêche, n.d.; FIS, 2012).
Capitaine Houat is a fish processing company with an annual fresh fish and shrimp processing capacity of 25,000 tonnes. The company operates two processing facilities located in Boulogne-sur-Mer, France and Lanester, France (Capitaine Houat, n.d.).
SCAMER is responsible for the distribution of sea products for the Les Mousquetaires group and its retail outlets Intermarché and Netto (Les Mousquetaires, n.d.). The company distributes 40,000 tonnes of seafood per year (Les Mousquetaires, n.d.).
Scapêche is a vertically integrated fishing company. According to Scapêche director Romain Fageot, Scapêche is the only completely vertically integrated fishing company in France. The founders of Scapêche had envisioned that the supermarket chain would be vertically integrated in all sectors, including meat, water and soda. The motivation was to control the quality of the raw materials and the final product. The founders of Scapêche also believed that it would become increasingly difficult to access raw materials (Fageot, 2016).
Originally Scapêche focused on fresh fish. According to Fageot, if there was no vertical integration with the processing company and supermarket chain then the company would focus on the frozen segment. Scapêche lands its harvests in France, the UK and Ireland. This is then transported to France through cold chain logistics partners (Fageot, 2016).
Scapêche has also engaged in a process of horizontal integration. It currently has 22 active vessels. It carried out horizontal integration through purchasing vessels and taking over companies. Horizontal integration was motivated partly as a means to expand production capacity, but also to gain access to different fish species. This allowed to diversify the product portfolio and meet the needs of Intermarché consumers. On an international level, the company has considered investing in fish catching companies in the UK and Ireland, for example, in order to expand its product portfolio and capacity. However, it decided that the barriers to entry were too high and the company was already meeting consumer demand sufficiently (Fageot, 2016).
Given the company’s structural vertical integration, there is no need for it to engage in non- structural vertical integration through off-take arrangements with processors. However, Fageot reports that the company does engage in quota swapping with other producers in the POs of which it is a member, other POs in France and internationally. He states that this is largely to compensate for by-catch. The company does not engage in quota leasing, or in the buying and selling of quota, as these activities are illegal in France (Fageot, 2016). As can be seen from the analysis above, Scapêche shows evidence of both vertical and horizontal integration. Structurally, Scapêche is part of a fully integrated value chain from fishing company, to processor, and eventually to retail outlets. Scapêche also shows evidence of structural horizontal integration, through investments in fishing vessels and companies in France. The company has not engaged in structural horizontal integration at the international level. In terms of non-structural forms of integration, Scapêche only engages in non- structural horizontal integration through quota swapping, mainly to compensate for by-catch (Fageot, 2016).
SAPMER was established in 1947 on Réunion Island. The company fishes in the Indian Ocean and Southern seas, while it also has storage units on Réunion Island and in Mauritius. SAPMER owns 12 fishing vessels and manages one patrol boat. The company also fully owns one tuna processing factory and participates in a 50% joint venture with Seafood Hub (Mauritius) (a subsidiary of the Ireland Blyth Group) in another one, both located in Mauritius (SAPMER, n.d.). In 2014, the company’s total assets amounted to EUR 173 million, while its revenue reached EUR 88 million (SAPMER, 2015).
Figure 46 provides an overview of the SAPMER company structure. The company’s subsidiaries, Les Armements Réunionnais and Armas Pêche are the owners and operators of toothfish longliners, while Armement Sapmer Distribution controls the company’s sales in mainland France. SOPARMA’s sole purpose is to manage Armas Pêche (SAPMER, 2015, p. 6). Thus, SAPMER is a vertically integrated company engaging in fishing, processing and the distribution of seafood products.
SAPMER’s company structure shows both vertical and horizontal integration. The company has investments in both the upstream and midstream segments, in fish catching, processing and distribution. The company does not, however, have investments further downstream in the retail sector.
Compagnie Française du Thon Oceanique (CFTO)
Compagnie Française du Thon Oceanique (CFTO) was established in 2011, after the merger of Cobrecaf and France-Thon. Currently, CFTO is the largest tuna fishing company in France with 65,000 tonnes of catch annually (CFTO, n.d.). In 2016, the company owned 14 vessels operating in the Atlantic and Indian Oceans catching tropical tuna (Parlevliet & Van der Plas, 2016a). In 2014, the company’s total assets amounted to EUR 130 million, while its revenue reached EUR 104 million (Orbis, 2016).
Figure 47 provides an overview of CFTO´s company structure. The company’s subsidiaries Armement CMB and Armement Gueriden are vessel holding companies, while Industria Armatoriale Tonniera is engaged in catching finfish (Ministere de l’Agriculture et de l’Agroalimentaire et de la Foret, 2016 and Bloomberg, n.d.). CFTO also holds 2.38% of COFREPECHE, a consultancy company specialised in the fisheries and aquaculture sector (ORBIS, 2016 and COFREPECHE, n.d.).
In 2016, Dutch Parlevliet & Van der Plas (PP Group) (see section 18.3.1) acquired CFTO. CFTO’s vessels continue to operate under the French flag (Parlevliet & Van der Plas, 2016).
The company structure of CFTO shows evidence of particularly horizontal integration. This is evident both at the CFTO level and at the level of the ultimate parent. CFTO has investments in a number of fish catching companies located in Europe and Africa. PP Group has investments in fish catching and fish processing all over the world, however, it has no investments in fish retailing (see section 18.3.1).
The company structure of CFTO shows a low level of vertical integration. There is only one company active in distribution, with no subsidiaries active in processing.
Comptoir des pêches d’Europe du Nord
Comptoir des pêches d’Europe du Nord (EURONOR) was established in 2006 as a joint venture by two large fishing vessels owners of Boulogne-sur-Mer, the Société Boulonnaise d’Armement Le Garrec, and Nord Pêcheries. The company owns six trawlers and operates in the North Sea, West Scotland, Faeroe Island Waters, the Norwegian Sea and Spitsbergen waters (EURONOR, n.d.). In 2013, the company’s total assets amounted to EUR 15 million while its revenue reached EUR 24 million (Orbis, 2016o).
Figure 48 provides an overview of the EURONOR company structure. The company has two subsidiaries in France, Boulogne Plasticoffre (73%) and EURONOR Distribution (50.01%). The company also holds 16.67% of the French company Société de Facturation et d’Encaissement relative aux Transactions commerciales en halle de Boulogne-sur-Mer (SOFETRA) (Orbis, 2016o).
Comptoir des pêches d’Europe du Nord is a subsidiary of UK Fisheries Ltd (United Kingdom). UK Fisheries Ltd in turn is in joint ownership by Onward Fishing Company (United Kingdom), a wholly-owned subsidiary of Icelandic Samherji hf, and a daughter company of Dutch fisheries company PP Group (see section 18.3.1). UK Fisheries has two more subsidiaries in the United Kingdom, Marr Fishing Vessel Management (currently dormant) and Boyd Line Ltd., together operate two freezer trawlers and one fresh fish trawler. Pesquera Ancora (Spain) is also a subsidiary of UK Fisheries. The Spanish company operates three vessels in the Barents Sea and off the coast of Canada (Samherji, n.d.).
Samherji (Iceland) is a vertically integrated seafood company holding multiple subsidiaries in Iceland, the United Kingdom, Germany, Poland and the Faroe Islands, controlling a significant volume of the fishing quota and operating a fleet of fishing vessels, freezer and fresh fish trawlers, as well as multipurpose vessels. The company is also engaged in fish processing and fish farming and has its own distribution and marketing centres (Orbis, 2016o). In 2016, the company had an operating revenue of EUR 636 million, an increase from the EUR 571 million generated in the previous year. The company held total assets of EUR 927 million in 2016, an increase from a year earlier when it held total assets worth EUR 837 million, with 1,554 employees (Orbis, 2018v). See section 19.3.1 for a more detailed profile of Samherji.
PP Group (Netherlands) is also a vertically integrated company with investments in fish catching, processing, and distribution all over the world. The company does not, however, have investments in fish retail (see section 18.3.1).
France Pélagique was established in 1988. The company engages in the catching of pelagic species such as mackerel, herring, horse mackerel, blue whiting and sardines. The company owns two freezer trawler vessels, both registered in Fécamp, France (Cluster Maritime Français, n.d). In 2014, France Pélagique’s total assets amounted to EUR 18 million while its revenue was EUR 24 million (Orbis, 2016a).
Figure 85 in section 18.3.2 presents the company structure of France Pélagique. As we can see from the figures, Cornelis Vrolijk is the parent company of France Pélagique. Cornelis Vrolijk is a Dutch family company established in 1880 (see section 18.3.2). The company, through its subsidiaries in France, the United Kingdom and the Netherlands, engages in fish catching and in the trading of pelagic fish. The company owns and operates freezer trawlers, as well as beam trawlers. The company also operates cold storage facilities in IJmuiden and Scheveningen, the Netherlands. Cornelis Vrolijk distributes its products to the markets of Nigeria, Ivory Coast, Egypt, Eastern Europe, China and Japan (Cornelis Vrolijk, n.d.).
The company structure of France Pélagique, particularly of parent company Cornelis Vrolijk (see section 18.3.2), shows a high level of structural horizontal integration. Cornelis Vrolijk has investments in fish catching in several European countries. Additionally, because France Pélagique operates freezer trawlers, there is also a degree of primary processing being carried out aboard the fishing vessels.
From the company analysis in section 10.3 it can be concluded that there is a degree of structural vertical integration in a number of fish catching companies in France. Only one company has investments through the whole value chain from fish catching to retail. There is a higher degree of structural horizontal integration, particularly in the form of investments from foreign fish catching companies in France.
Jacques Pichon of fish producer organisation Les Pêcheurs de Bretagne states that there is little vertical or horizontal integration in his PO, and in France in general. He reports that more horizontal integration takes place at the level of the processing companies. Pichon notes that there are more than 800 vessels in his PO, but these are mostly owned by individuals. Scapêche (see section 10.3.1) is a member of PO Les Pêcheurs de Brettagne. However, other examples of vertical integration tend to be very small-scale. In such cases a fisherman may own at the most two to three vessels, and a shop from which to sell the produce (Pichon, 2016).
Pichon attributes this lack of vertical integration, particularly in his PO, to the fact that the fisheries are very mixed. For example, in the Les Pêcheurs de Brettagne PO approximately 40 different species, in four to five different sizes, and three grades of quality are marketed each day. The majority of the vessels in the PO are bottom trawlers, therefore it is difficult for the fishermen to forecast their harvest. The small number of small pelagic vessels in the PO engage in more targeted fishing. This enables them to enter off-take arrangements. Bottom trawlers, on the other hand, are less targeted and therefore sell their produce at auction (Pichon, 2016).
There is a degree of horizontal integration in the fish catching sector domestically in France. Fishermen tend to buy vessels that have the licenses they are interested in and are active in areas where the fisherman is already active. French fishing licences are vessel, species, fishing area, and fishing gear specific. Licences from old boats can be moved to new boats to expand the quota capacity (Pichon, 2016).
In France, horizontal integration within the fish catching and processing sectors is not observed in terms of the international expansion of French fishing companies. On the other hand, horizontal integration is present in the wholesale sector of the fish industry (distribution of fish products). French companies fish within French waters and process the catch domestically. However, they also distribute it internationally within the EU. The most representative example of this form of integration is Les Mousquetaires group with its vast European retail presence.
A recent trend noted by the French respondents was the increased investments of Spanish fishing companies in the French fishing sector. Pichon states that this is due to several factors. Firstly, the national fixed percentage of total allowable catch (TAC), known as the relative stability key, is very low for Spain. This has historical reasons. When Spain joined the EU and became subject to the CFP it was allocated its relative stability key on the basis of its historic track record of fish harvests. However, at that time the capacity of its fleet was very low. Secondly, there is still overcapacity in the Spanish fishing fleet, despite several decommissioning schemes to reduce the size of the fleet. This puts a lot of pressure on fishing companies to access more quotas. A number of Spanish fishermen have used the money they received from decommissioning their vessels in Spain to purchase French licences, move these on to the old Spanish vessel which is then flagged in France while the old French vessel is sold on without a fishing licence. The Spanish companies then try to join French POs with their newly flagged French vessels. As with French companies, Spanish fishermen try to join POs that have a large proportion of the total French quota of the species that they wish to market (Pichon, 2016).
Non-structural methods of horizontal integration are not very commonly utilised, according to Pichon. France does not employ the ITQ fisheries management system. In France, fish resources are considered public goods, and the government plays a leading role in allocating fishing licences and catch quotas. Quotas are non-transferrable and are based on historic track-records. Quota allocation is determined at the national level and then handed down to the POs which further subdivide the quota allocations. Given that quotas are nontransferable, there is no buying and selling of quota in France (Pichon, 2016). Romain Fageot of Scapêche states that quota leasing is illegal in France, however, there is a degree of quota swapping (Fageot, 2016).