IM OIIIIK IMHSIRIAl DEVll.OPMINl I'OIKIIS 



In I'iSO ihc largest priK-essm. Uniisli Columbia Packers 

 l.imileil. iiKToase*.! its share o\ salmon processing; capac- 

 ity Irom about 33 [XTcent to about 42 percent through 

 acquiring assets from the Canadian Fishing Company 

 Ltd.'" These inckided sessels. vessel servicing facilities 

 and priKcssing capacity. In addition, in the last few years 

 a number of" bankruptcies and mergers involving smaller 

 firms have occurred. These latter developments, and not 

 internal growth of" the largest companies, account for 

 most of the increased concentration of the processing 

 industry. 



The salmon canning industry is clearly highly concen- 

 trated. However, there is no clear evidence that the exist- 

 ing structure is an impediment to industrial efficiency, 

 and in view of Canada's limp competition policy I cannot 

 adv(Kate restrictive controls on the fishing industry in 

 isolation. The current degree of concentration in the 

 canning sector would be cause for greater concern were it 

 buttressed by artificial barriers to new entrants through 

 licensing or control over resource supply. But, as I 

 describe below, the dominant canning companies" con- 

 trol over fish supplies is relatively modest and decreasing, 

 and provincial licensing of proces.sors does not restrict 

 entrants. 



Verticil integration Since the beginning of the fishery 

 on this coast, pr(x:essing companies have maintained 

 their own fleets, renting or chartering vessels to fisher- 

 men, many of whom are Indians. In Chapter 9 I 

 described arrangements between the Minister and the 

 Fisheries Association of B.C., whose members agreed not 

 to increase their share of the salmon fleet at the inception 

 of the limited-entry licensing program in 1969. Since 

 then, the consistent trend has been for processors to 

 dispose of their interests in fleets, and this trend may well 

 continue. 



We want to leave primary fishing entirely and 

 concentrate on the processing side. 

 Entrepreneurial captains owning their own 

 boats can do a better job of getting fish out of 

 the water and controlling their costs than we 

 can.-" 



In general the processing industry appears to be depend- 

 ing more on market competition for fish and less on the 

 traditional means of securing fish from their own or tied 

 fleets. Tliis is a desirable trend, which should enhance the 

 vigour and competitiveness of the industry. 



Moreover, I have made recommendations in Chapter 8 

 calling for limits on licence holdings to forestall any 

 reversal of these trends that might lead to undue concen- 

 tration of fishing privileges. Those restrictions will ensure 

 that processing companies now holding substantial 

 fishing privileges do not increase their shares, but they 

 will accommodate new companies, cooperatives or other 



ventures as long as ihc proposal limils are atlhered to. In 

 order to mamlain a vigorous and compctilivc iiulustrial 

 structure, the Department should monitor licence hold- 

 ings carefully to ensure that those limits are not exceeded. 



Fish Prices and Markets 



To cixiiplete this description of the Pacific processing 

 industry, the following paragraphs briefly review fish 

 pricing and product markets. 



Determimitinn of fish prices The prices paid in the 

 two major fisheries, salmon and roe-herring, are heavily 

 influenced by pre-season negotiations between represent- 

 atives of fishermen and processors. Fishermen are repre- 

 sented mainly by the United Fishermen and Allied 

 Workers Union and the Native Brotherhood of British 

 Columbia, and processors, by the Fisheries A.ssociation 

 of British Columbia. Minimum prices are negotiated for 

 salmon caught with net gear, though in recent years the 

 prices paid have often risen above these minima as a 

 result of strong market demand and the influence of cash 

 buyers. The prices paid for salmon landed with troll gear 

 are not negotiated, and they are generally higher than 

 prices for net-caught fish, depending on species and qual- 

 ity. 



The landed prices paid for salmon do not represent the 

 full payment for the catch because of significant post- 

 season bonuses paid to vesselowners. These payments 

 serve to strengthen ties between fishermen and particular 

 buyers: and, because bonuses are not necessarily subject 

 to division between the vesselowner and the crew, they 

 tend to bolster the return to vesselowners. (The tradi- 

 tional share system for seine vessels provides 7/1 Iths of 

 the earnings to the crew, with the remainder going to the 

 captain and owner of the vessel.) Bonus payments have 

 been paid to gillnetters as well as seiners, and recently to 

 some trollers. 



Because the roe-herring industry is relatively new and 

 has been turbulent, it is diflficult to speak of a normal 

 process of price deterrrunation. And in the late 1970s, 

 eager cash buyers drove roe-hernng prices well above the 

 levels contemplated when the pre-season price agree- 

 ments were concluded. The United Fishermen and Allied 

 Workers Union and the Native Brotherhood negotiate an 

 amount to be paid to crews (not the full landed price). 



In other fisheries, prices are determined more flexibly 

 in response to market .supply and demand. Most halibut 

 are sold through long-established exchanges in Prince 

 Rupert and Vancouver, in which buyers post bids and 

 sellers negotiate sales, often before the fish are landed. 

 The prices of other species also fluctuate with market 

 conditions between and during the fishing seasons. 



In addition to landed prices and bonuses, some proces- 

 sors provide fishermen with services at less than cost. 



