3 Min Read
OTTAWA (Reuters) - People eating in restaurants are spending less and avoiding pricier foods, which means you can now add Canada's lobster fishermen to the long list of those hurt by the global financial crisis.
The C$1 billion ($775 million) a year industry is struggling to cope with a slump in demand in the United States and Europe that has pushed wholesale prices in some places down to levels not seen in 25 years or more.
"A lot of lobster is eaten in restaurants and restaurant sales are very sluggish, we're told," said Denny Morrow, head of the Nova Scotia Fish Packers Association.
"(With) this financial meltdown and the constant barrage of negative economic news ... I think consumers are choosing not to buy the high-end items," he told Reuters on Monday, saying demand for live lobster at this time of year is usually high.
The Canadian industry is centered in the Atlantic provinces of Nova Scotia, New Brunswick and Prince Edward Island.
Last year fishermen could sell their lobsters for as much as C$7 a pound. This year they are getting much less.
"Our season just finished and our prices were C$4 a pound to the fisherman. That's about 25 percent less than compared to last year ... (while) operating costs have increased by about 32 percent," said Ed Frenette of the Prince Edward Island Fishermen's Association.
"Everybody is relating it to the financial crisis worldwide ... the American consumer just doesn't seem to be buying lobster, considering it to be a luxury item," he told Reuters.
Laurence Cook of the Grand Manan Fishermen's Association in New Brunswick said the market has stalled amid clear signs of what he called greed. Lobster that fishermen were selling for C$2.75 a pound is priced at C$12.99 in local stores, he said.
"People are being very cautious right now. They're not going to go out and buy a C$12.99 lobster, so they don't move, and because they didn't move, the price goes down further," he told Reuters.
"We need to get some mechanism in place to limit the amount of mark-up after they leave the boat."
Adding to the lobstermen's woes is the recent failure of Icelandic bank Glitnir, which had offered several Canadian food processors lines of credit.
"It's not a good situation ... if something isn't done we'll see homes gone and vehicles and boats (gone) because people were extended," Cook said.
In Nova Scotia, Morrow had a message for consumers in other parts of Canada and the United States.
"Tell everybody down there to eat lobster. You can't beat it right now, it's a great buy," he said.
Reporting by David Ljunggren; Editing by Peter Galloway