Pelagic Fish Market

Oceana chief executive Francois Kuttel has admitted that the company had infringed the Competition Act.Oceana chief executive Francois Kuttel has admitted that the company had infringed the Competition Act.

Oceana Group, the South African fishing company, tried to have its cake and eat it last week. Caught in the crossfire of a Competition Commission investigation into the pelagic fishing market, Oceana decided to admit guilt and settle with the commission, thus getting a smaller fine.

Pelagic fish includes three species: anchovy, pilchards and red-eye herring.

Ultimately, Oceana paid R34.7-million, which equates to 5% of its turnover from the pelagic fish market for 2010. Its pelagic fishing business brought in revenue of R695-million that year.

However, according to the strictest letter of the law, Oceana’s fine could have been a lot more significant, which makes its claims that its violations of the Competition Act were “technical” in nature and that “no harm” was done to any consumers worrisome.
As explained this week by the commission’s divisional manager of advocacy and stakeholder relations, Trudi Makhaya, cartel conduct is inherently anticompetitive.

“All economic theory points to the fact that cartel behaviour always causes consumer harm, ” said Makhaya.

Competition Tribunal
She confirmed that the commission was in the process of referring the entire investigation to the Competition Tribunal, which will result in other fishing companies pointed out in the cartel facing the music too.

The Competition Act allows the Competition Tribunal to levy a 10% penalty on total group earnings. It means that Oceana’s total fine, if it had not settled, could have been as much as R342-million, which equates to 10% of the group’s 2010 turnover of R3.4-billion.

To measure the full impact of a fine of this magnitude, it would equate to 49% of turnover for 2010 of Oceana’s affected business, pelagic fishing.

It seems clear that Oceana’s decision to settle makes good business sense and its recent announcement of a 21% increase in headline earnings per share reinforces the point.

However, its desire to deflect blame from itself smacks of arrogance.

Price fixing
So what exactly did Oceana do? According to the settlement agreement, it has admitted to price fixing, information sharing, market division, customer allocation and even its shareholders drafting a contract that had a non-competition clause in it.

With its competitors, on which it is spilling the beans as part of its settlement, Oceana agreed to fix the prices paid to vessel owners and operators, skippers and crew for the service of catching pelagic fish.

Oceana also entered into agreements with its competitors in the processing and canning of fish in terms of which they shared competitively sensitive information that gave rise to indirect fixing of the price of canned fish sold to consumers.

Markets for frozen small pelagic fish
Book (Rome. Food and Agricultural Organization)

Actually your notions about frozen fish may be

2008-07-14 15:57:30 by part_of_the_problem

While *truly* fresh fish is superior to frozen for texture in many cases, what passes as "fresh" is often not really that fresh.
If you ever had the kinds of pelagic fish you describe within 30-60 minutes of being caught, you would be amazed at how un-fishy they are, especially tuna.
When fish is fileted and flash frozen at sea in that same time frame, it will most likely have less of a fishy flavor than the same fish that stays unfrozen for even a few hours trip to market, which is enough time to develop a fishy enough taste to put off someone who is sensitive to it.

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