Required Report - public distribution

**Date:** 12/03/2004

**GAIN Report Number:** IT4036

IT4036

**Italy**

**Fishery Products**

**Annual**

**2004**

**Approved by:**

![](media/image1.wmf)Ann Murphy

U.S. Embassy

**Prepared by:**

Alberto Menghini

**Report Highlights:**

Compared to 2002 the 2003 Italian catch is up 10%. The long-term decline
in the catch continues, largely a consequence of EU policies to reduce
over-fishing. Aquaculture is growing as EU policy is reducing the
fishing effort in order to preserve dwindling marine resources.
Processing has been growing steadily in the last three years following
increased demand for canned tuna. The United States dominate the Italian
market for fresh lobsters.

Includes PSD Changes: Yes

Includes Trade Matrix: Yes

Annual Report

Rome \[IT1\]

\[IT\]

Table of Contents

[**Executive Summary** Error! Bookmark not
defined.](#__RefHeading___Toc89681861)

[Production 3](#production)

[Marine Fisheries 3](#marine-fisheries)

[Average fishery prices 3](#average-fishery-prices)

[Acquaculture **Error! Bookmark not
defined.**](#__RefHeading___Toc89681865)

[Processing 5](#processing)

[Consumption 6](#consumption)

[Household consumption 6](#household-consumption)

[Consumption in Hotels, Restaurants, Catering
7](#consumption-in-hotels-restaurants-catering)

[Trade 7](#trade)

[Italian fish and seafood imports -- Top 15 products
8](#italian-fish-and-seafood-imports-top-15-products)

[Italian fish and seafood exports -- Top 15 products
8](#italian-fish-and-seafood-exports-top-15-products)

[Trade with the United States 9](#trade-with-the-united-states)

[Marketing and distribution 9](#marketing-and-distribution)

[Key success factor for foreign suppliers
10](#key-success-factors-for-foreign-suppliers)

[PSD Lobsters 11](#psd-lobsters)

[Import Matrix Lobsters 11](#import-matrix-lobsters)

[PSD Squid 12](#psd-squid)

[Import Matrix Squid 12](#import-matrix-squid)

# 

# Production

## Marine Fisheries

The Italian fishing fleet is showing a continuing trend for decline in
terms of number of units. This trend started in the year 2000. About
1,700 vessels (10% of the fleet) went out of business between 2000 and
the beginning of 2003 as a result of EU-funded policies for the
reduction of fishing in the Mediterranean.

Data about Italian fishing fleet

  ----------------------------- ------------- ----------- -------- ----------- ------ ------------
                                              2002                 2003               Change 03/02

  Number of vessels             Units         16,636               15,915             -4%

  Gross Registered Tonnage      MT            187,347              178,334            -5%
  (GRT)                                                                               

  Total Engine Power            KW            1,300,256            1,253,177          -4%

  Fishing activity              Days          2,816,850            2,460,564          -13%

  Avg. Gross Registered Tonnage MT/vessel     11                   11                 -1%
  (GRT)                                                                               

  Avg. Engine Power             KW/vessel     78                   79                 1%

  Avg. Fishing Activity         Days/vessel   169                  155                -9%

  *Source: Ismea and Irepa*                                                           
  ----------------------------- ------------- ----------- -------- ----------- ------ ------------

Most vessels are rather small. About 62% of them have a Gross Registered
Tonnage (GRT) of less than 6 MT, while only 1.8% have a GRT of 100 MT or
more. Most of the small vessels do not have state of the art equipment
for on board processing and conservation of the product.

Italy accounted for about 5% of the overall EU15 catches in 2003.
Fishing activities are spread along 8,000 kilometers (4,970 miles) of
coast, with very little concentration. They involve about 41,000
operators between owners and employees.

Wild catches in 2003 were 314,807 MT, up 10% from 283,757 MT in 2002.
The value of catches in the year amounted to about 1.4 billion Euros
(1.9 billion US Dollars at the average 2003 Euro/US\$ exchange rate).
Average per Kilo prices in the year have been 0.3-0.4 Euros higher than
in 2002 in the first and third quarter.

# Average fishery prices

  ------------ --------- --------- -- --------- ------ --------- -------- ------------
                         1st          2nd              3rd                4th Quarter
                         Quarter      Quarter          Quarter            

  2002         Euro/Kg   3.98         4.60             4.47               4.34

  2003         Euro/Kg   4.42         4.71             4.84               4.34

  03/02 Change \%        11%          2%               8%                 0%

  *Average                                                                
  2003                                                                    
  Euro/US\$                                                               
  exchange                                                                
  rate 1.31*                                                              

  *Source:                                                                
  Irepa*                                                                  
  ------------ --------- --------- -- --------- ------ --------- -------- ------------

Anchovies and sardines (indicated in Italian as "pesce azzurro", blue
fish) are by far the most fished species, followed by clams, hake,
mullets, and swordfish. These 6 species alone account for about 44% in
volume of the Italian catches in the year.

![](media/image2.wmf){width="4.009027777777778in" height="2.675in"}

Swordfish, hake and clams offer generally much higher market prices and
economic margins than anchovies and sardines.

## Aquaculture

According to the Italian Fishfarming Association API (Associazione
Piscicoltori Italiani), there are about 1,000 fish farms in Italy. About
62% of them are located in Northern regions (especially in Veneto), 22%
in Central regions (especially in Abruzzo) and 16% in Southern regions.
The sector occupies about 15,000 people in the country. The 2003
production was worth about 250 million Euros.

Salt and brackish fish farms produce sea bass (9,000 MT in 2003) and sea
bream (8,000 MT in 2003), white sea bream, shi drum, eels, as well as
other minor species like gray mullet and mollusks.

Mollusks are the main product of Italian aquaculture. There are about
474 saltwater farms for mussel production (mainly located in the regions
Liguria, Puglia, Emilia Romagna, Veneto and Sardegna) and about 36 for
clam production (mainly located in the Venice and Emilia Romagna areas).
Mussel production is steady at about 135,000 MT per year; clam
production grew dramatically from about 40,000 MT in 1997 to more than
55,000 MT in 2003.

Italian clam producers often source breeding material from specialized
companies in the United States for improving the performance of their
operations.

![](media/image3.wmf){width="3.841666666666667in"
height="2.566666666666667in"}

Freshwater farms produce about 72% of Italian aquaculture output. Trout
is by far the most popular species with about 44,000 MT produced in
2003. Other farm species are cyprinidae (carp, tench, etc.), ictaluridae
(European and American black bullhead), acipenseridae (sturgeon) as well
as other minor species like pike, etc. About 2,500 MT of eels were
produced in freshwater aquaculture in 2003.

About 60% of the trout produced in Italy is red portion-size, the
balance is mainly white portion-size, while the incidence of 1 kilo
rainbow trout is negligible. This is creating big problems for Italian
farmers as international demand for portion-sized dropped dramatically
between 2003 and the first hal of 2004.

According to producers, trout market prices in 2004 have been so low (on
average 2.16 \$/kg) that production costs are not covered.

Since the animal health situation is not the same throughout the
territory of the European Union, the movement regulations are based on
the concept of approved (disease free) zones and farms for list II
diseases in Annex A of Directive 91/67/EC. The Directive lays down the
criteria and procedures for the granting, maintenance, suspension,
restoration and withdrawal of approval of such zones and farms as well
as certification requirements for movement into disease free
zones/farms.

About 23 Italian companies have been recognized disease-free in
compliance with the EU directive.

Some trout producers in Northern and Central Italy are diversifying into
organic production.

Italian domestic production of sea bass and sea bream has a superior
image in the market and is traded at a significant price premium
compared to the imported product.

# Processing

According to Federalimentare, the main Italian food industry
association, the volume of processed fish and seafood produced in the
country has increased by about 15% in the 2000/03 period. The production
growth in 2003 was about 3%, and is expected to continue at the same
rate in 2004.

![](media/image4.wmf){width="3.9569444444444444in"
height="2.4972222222222222in"}

Production of processed fishery products amounted to 128,400 tons in
2004 for a wholesale value of about \$825 mln, up 28% from the 1998
value. Tuna alone accounts for 69% of the country production, with
89,000 tons processed in 2003. Other key processed products include
anchovies (16%) and clams (2%), while the production of sardines in
olive oil, which was very important in the past decade, has almost
disappeared.

The increased production of canned tuna implied increased imports of raw
tuna and other semi-processed products. In the past, the main raw
material utilized was in frozen whole form. In the early nineties,
imports of cheaper canned tuna from third countries increased rapidly.
Italy mainly relies, for its canned tuna production and market, on
yellowfin loins and on high quality whole yellowfin originating mainly
from Taiwanese (Province of China) and EU vessels operating in the
Indian and in the Atlantic Ocean.

According to Eurostat, imports of frozen yellowfin for canning total
about 80 percent of total imports of whole tuna in Italy. Italian
imports of frozen whole yellowfin for canning declined from 82,600 tons
in 1992 to 31,300 tons in 2003. In turn, Italian imports of loins
increased from 17,600 tons in 1994 to 38,400 tons in 2003. The
substitution of whole raw material with frozen pre-cooked loins is a
measure by the Italian tuna canning industry to remain competitive
vis-à-vis Southeast Asian competitors.

The main suppliers of raw tuna loins to Italy are Colombia and Ecuador,
which host the processing facilities of Tri-Marine, the top world
producer of tuna loins.

Italian industries mostly produce canned tuna in oil, but value-added
products such as tuna salads and tuna fillets in glass jar are growing
very quickly.

Some Italian companies buy canned tuna from third countries to be
marketed under their brands. The country increased its imports of canned
tuna during 2003 with volumes up 13% to 54,000 tons for the first 11
months.

Spain remains the dominant supplier with 24 000 MT although its share of
imports fell somewhat to 44%. Among the remaining suppliers, the biggest
sales increases were registered by France (+58%) and Colombia (+51%).
Côte d'Ivoire, the second largest supplier to the market with products
under the Rio Mare (Trinity Alimentari) as well as private label
products for the Italian retail sector, also increased sales by 7% to 24
000 for the January -- November period.

# 

# Consumption

Fish consumption in Italy is about 23 Kg per person per year. Italian
consumers prefer saltwater fish (56% of the consumption) and mollusks
(25% of the consumption), while freshwater fish and shellfish account
respectively for 13% and 6% of the domestic consumption.

There are significant differences on consumers' preferences between
household fish consumption and restaurant/catering consumption.

## Household consumption

Italian household consumption of fish and seafood products in 2003
increased by 1% in volume and 2.5% in value vis-à-vis 2002. Fresh
products account for about 53% of the consumption, frozen and canned
products for about 22% each. Dried, salted and smoked represent
altogether about 4% of household consumption.

Among fresh products, increases in volumes consumed were recorded for
scampi (+42%), clams (+35%), squids (+22%), trout (+10%) and salmon
(+7%). Sea bream consumption decreased by 8%, cod by 4%, mackerel by 7%,
mullet by 10%.

Among canned products, consumption increased for clams (+12%), tuna
(+4%), anchovies in oil (+5.5%), mullets (+2%). Consumption of ready to
eat frozen products declined by about 7.2%.

###### Data on Household Consumption

![](media/image5.wmf){width="5.993055555555555in"
height="2.4631944444444445in"}

## Consumption in Hotels, Restaurants, Catering

Non-household fish consumption in 2003 was also up by 2% from 2002 to
175,000 tons. Consumption of fishery products in restaurants is higher
in southern regions.

Fresh products have a higher incidence than in domestic consumption,
especially in southern regions. They account for about 70% in volume of
the supplies. Mussels met the highest demand, accounting for about 13%
of the volume, followed by clams (13%), squids (5%), sea bass, sea bream
and octopus (4% each), cuttlefish (3%).

Italian high-end restaurants are very receptive towards some U.S.
products, especially lobsters, squids and wild salmon.

# 

# Trade

Italian trade deficit for fishery products in 2003 increased by 12% in
volume and by 7% in value. Exports dropped by 6.5% in volume while
imports increased by 4.6%. While canned fish (23%) and mollusks (28%)
are responsible for the long term deficit, shellfish and fresh fish were
responsible for the increased deficit in 2003.

Although EU countries are still the major suppliers with a market share
of 52% in volume, purchases from third countries increased 16.4% in
volume and 9% value. The high Euro to US Dollar exchange rate is the
main reason for this trend.

Spain maintain its leadership among EU suppliers (especially of tuna,
cuttlefish and mussels), followed by France, Denmark, Netherlands and
Greece. Chile remains the leading third country supplier with a trend
for growth in 2003. Ecuador, Colombia, the Seychelles and Taiwan
increased their tuna sales to Italy. Argentine hake exports declined
following production limitations in the country.

# Italian Fish and Seafood Imports -- Top 15 Products

  ------------- --------------------------------- ------------- ----------------- ----- ----------- ---
  Imports                                                                                           

  Product                                                       Volume (MT)             2003/02     
                                                                                        var.        

  Tuna                                            145,129,531                     43%               

  Others                                          119,424,456                     25%               

  Cuttlefish                                      72,915,565                      18%               

  Fish flour                                      64,647,019                      10%               

  Octopus                                         50,578,207                      -6%               

  Squid                                           48,685,953                      7%                

  Mussels                                         38,275,214                      19%               

  Hake                                            35,880,981                      -5%               

  Prawn                                           35,132,790                      10%               

  Cod                                             29,821,545                      17%               

  Salmon                                          24,339,927                      2%                

  Swordfish                                       18,734,738                      19%               

  Oil and fat                                     18,275,939                      39%               

  Mazzancolle                                     17,208,320                      30%               
  (*Penaeus                                                                                         
  species*)                                                                                         

  Tattler                                         16,707,471                      3%                

                **Total**                                       **879,728,716**         **4.6%**    
  ------------- --------------------------------- ------------- ----------------- ----- ----------- ---

Source. Italian Statistical Office

Exports to EU countries represent about 78% of Italian exports. They
declined in response to reduced demand from Spain, France, Germany and
Greece. Extra-EU exports increased by 11% in value over the year.
Croatia and Albania were the fastest growing markets, while Switzerland
remains the main destination market.

# Italian Fish and Seafood Exports -- Top 15 Products

  --------------------------------- ----------------------- -------------
  Product                           Volume (MT)             2003

  Others                            23,827,043              -1%

  Tuna                              15,961,562              -19%

  Anchovies                         15,346,010              24%

  Other mollusks                    14,965,920              40%

  Sardines                          11,872,856              8%

  Mussels                           5,154,422               -16%

  Fish meal                         4,271,414               -20%

  Non-food products                 2,735,782               -6%

  Scallops                          2,627,872               122%

  Shrimp                            2,141,027               -25%

  Cuttlefish                        1,860,373               49%

  Cod                               1,372,934               15%

  Octopus                           1,098,969               -50%

  Clams                             1,028,934               1%

  Squid                             1,017,800               -45%

  Total                             111,881,202             -6.50%
  --------------------------------- ----------------------- -------------

Source. Italian Statistical Office

Exports of scampi, sardines and fishmeal had the highest increase in
2003.

## 

## Trade with the United States

U.S. exports of fishery products in 2003 to Italy were down to about
6,000 tons from the 7,000 tons of 2002. The dollar value of U.S. fishery
exports to Italy was up to about \$49 mln in 2003 from the \$44 mln of
2002. The Euro value does not show the upward trend because of the lower
US\$ to Euro exchange rate in 2003.

Fresh lobsters (Homarus species) are the leading U.S. fishery product on
the Italian market (see IT4032 -- "US Lobsters Dominate Italian Import
Market" -- for further details). Other significant exports in 2003
included squid (HS 030749) at \$3.3 mln, frozen fish livers and roes (HS
030380) at \$1.6 mln, frozen salmon (HS 030311 and HS 030319) at \$ 1.4,
surimi \$1.3 mln, frozen cod fillets (HS 03042021) at \$746,000, live
eels (HS 030192) \$340,000. Data for mollusks trade include U.S. exports
of breeding material for clams' production as no specific HS code is
available for such product. Export of U.S. mollusks bivalve for human
consumption is currently prohibited.

Exports to Italy were made up as follows.

  ---------------------------------- ----------- ----------- ------------ ------------
  **U.S. Exports to Italy**          **Volume                **Value (000 
                                     (MT)**                  Euros)**     

                                     **2002**    **2003**    **2002**     **2003**

  0306 - crustaceans, live, frsh,    2,549       2,695       31,418       38,467
  chilled, frzn etc.; crustaceans,                                        
  in shell, cookd by stm or boilng                                        
  watr; flours, meals, & pellets of                                       
  crustaceans, hum consumpt                                               

  0303-fish, frozen, excluding fish  1,871       1,133       4,707        3,530
  fillets and other fish meat                                             
  without bones; fish livers and                                          
  roes, frozen                                                            

  0307-molluscs & oth aquatic        2,491       1,173       5,089        3,269
  invertebrates nesoi, live, frsh,                                        
  chilld, frzn, dried, saltd or in                                        
  brine; flours, meals & pellets of                                       
  aqua inverteb hum consumptn                                             

  0304-fish fillets and other fish   82          942         1,901        2,225
  meat (whether or not minced),                                           
  fresh, chilled or frozen                                                

  0301-fish, live                    9           66          208          615

  0302-fish, fresh or chilled,       40          57          201          416
  excluding fish fillets and other                                        
  fish meat without bones; fish                                           
  livers and roes, fresh or chilled                                       

  1604-prepared or preserved fish;   48          1           219          241
  caviar and caviar substitutes                                           
  prepared from fish eggs                                                 

  0305-fish, dried, salted or in     0           8           1            77
  brine; smoked fish; fish meal fit                                       
  for human consumption                                                   

  1605-crustaceans, molluscs and     15          13          29           56
  other aquatic invertebrates,                                            
  prepared or preserved                                                   

  **TOTAL**                          **7,104**   **6,090**   **43,773**   **48,895**
  ---------------------------------- ----------- ----------- ------------ ------------

# Marketing and distribution

The main distribution channels for fishery products in Italy are
wholesale markets, private wholesalers and direct sales. Imported
products, both fresh and frozen, are mainly traded on wholesale markets.

Wholesale markets are distributed all over the country but with
significant differences in size (volume of product traded and turnover)
and specialization (business-to-business only, mixed, incidence of
imported production on total sales, etc).

According to a recent survey on fishery supply, on average 50% of the
operators present on the Italian fishery markets are domestic fisheries
and aquaculture firms, about 37% are wholesalers and importers, the
balance is represented by traders, intermediaries and foreign producers.
On the demand side, about 42% of the customers are retailers, 16% are
restaurants and catering, 15% are supermarkets, while the balance are
processors, resellers, exporters, etc. About 30% of the products are
negotiated by private agreements between buyers and suppliers, the rest
is sold in auctions. According to Ismea estimates, about 6% of the
product that is traded on the Italian wholesale markets is of North
American origin.

Private wholesalers mainly buy products from domestic fisheries, but a
44% of them also buy from foreign wholesalers in order to integrate
their supply. Only 3% of them buy exclusively from foreign suppliers.
Wholesalers mainly deal in fresh products and the incidence of imported
products is lower than in markets. North American fishery products
account for about 1.6% of the transactions. On the demand side,
retailers account for about 40% of the market, restaurants and catering
for 19%, supermarkets for 10%, and the balance is sold to other
wholesalers, processors and consumers.

## Key Success Factors for Foreign Suppliers

A recent Ismea survey among fishery wholesalers identified the key
factors for choosing foreign suppliers. They are reported in the graph
below.

![](media/image6.wmf){width="5.853472222222222in"
height="4.509722222222222in"}

# PSD Lobsters

![](media/image7.wmf)

![](media/image8.wmf)

# Import Matrix Lobsters

See IT4032 -- "US Lobsters Dominate Italian Import Market" -- for
further details

# PSD Squid

![](media/image9.wmf)

# Import Matrix Squid

![](media/image10.wmf)