Deliverable 4.3

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Report on the development of fish consumption and demand in France and Finland

Executive Summary

This document reports the analysis of demand for fish in France and Finland, with a special focus on PrimeFish species. Those two countries have relatively high levels of fish consumption by European standards, and have experienced significant growth in fish consumption over the last 40 years, although the level of consumption appears to have plateaued since the start of the century. The overview of consumption trends and structures in the two countries sheds light on important changes and differences. For instance, in the fresh fish market, salmon remains the main species in terms of consumption volumes in both countries, but its relative importance is much more pronounced in Finland, where demand for herring has collapsed over the last two decades. In France, negative press and rising prices have hindered growth in salmon consumption in recent years.

A detailed econometric analysis of demand for different types of fish products, defined in terms of both species and processing method, then uses data from large consumer panels in order to identify the economic and socio-demographic drivers of household-level fish consumption. By estimating the degree of substitution among potentially competing products, we identify empirically the main fish products competing with PrimeFish species for consumers’ euros in different fish sub-markets (fresh, smoked, canned, and frozen). The results demonstrate that, while the main competition among species often occurs within a market segment (e.g., between trout and salmon among smoked products in France), substitutions also take place much more broadly - for instance, canned tuna is an important substitute for all PrimeFish species in the French fresh fish market.

The simulation of simple scenarios of changes in the economic environment, using the empirically estimated demand systems, then provides a quantitative summary of our analysis at the level of PrimeFish species. Thus, among PrimeFish species, growth in consumer expenditure is particularly favourable to consumption of cod and seabass in France, as well as trout in Finland. In the French fish market, salmon occupies a special place in the sense that its demand is mainly driven by its own price, but its price has a strong influence on demand for other species, including trout and herring. Cod and seabass, meanwhile, appear to form a separate market segment where little substitution with other species takes place, maybe because those fishes lie higher up on the quality ladder.

The analysis of the influence of households’ socio-demographic characteristics on fish preferences and consumption reveals a high level of heterogeneity among consumers, hence suggesting the need for segmentation of the market and targeted marketing strategies. However, few relationships between socio-demographics and consumption hold across all PrimeFish species and product groups. This is illustrated by the result that, in both countries, while consumption of fresh fish tends to increase with the age of the household head, the relationship applies to salmon but not trout. Thus, market segmentation needs to be adapted to each product defined in terms of species and processing method.

The elasticities of demand for fish reported in this report will be used further to simulate the sustainability effects of raising fish consumption as part in task 4.3.2.

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