Wholesale price of salmon falls 40%, consumers pay the same

The reason for the decline in prices is fierce competition between two Norwegian salmon exporters.

By ILANIT HAYUT/GLOBES
July 11, 2011 05:19
3 minute read.
Salmon dish

Salmon dish 311. (photo credit: MCT)

 
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The price of fresh salmon has declined by up to 40 percent in the past six weeks, but most supermarket chains have not passed on the reduction to consumers, who continue to pay high prices.

The reason for the decline in prices is fierce competition between two Norwegian salmon exporters, Marine Harvest and Leroy. Marine Harvest is the world’s largest salmon producer.

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In the battle between the two companies, Marine Harvest decided to flood the market with fresh salmon, a move that led to a sharp drop in the price of the fish.

All the fresh salmon sold in Israel is imported, and the decline in price reached the local market, but not the consumer. According to estimates, sales of fresh salmon in Israel amount to NIS 170 million a year at wholesale prices, and may reach double that at consumer prices.

A large fish importer told Globes that the price at which he sold salmon last week was 40% below the price of the fish six weeks ago, and that there had been a gradual decline in prices.

The price reached a low last week.

“Last week, I sold whole salmon for NIS 28 plus VAT.

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Six weeks ago, I sold the same product for NIS 45 plus VAT. That’s a fall in price of 40%. However, the chains have kept the same price to the consumer. There is a complete disconnect at the retail chains between the purchase price and the selling price. What sort of business behaves like that? A business that couldn’t care less about its customers,” the fish importer told said.

He said that because of wastage, the cost of salmon fillet to the retailer was NIS 44-45 per kilo including VAT, while salmon steak costs about NIS 37 including VAT.

The price of fish varies from week to week, depending on the global market price. Fish importers claim that salmon is now being sold at double the price paid by the retail chains for the fish.

Indeed, a visit to supermarkets around the country found the following prices: at Shufersal Deal, salmon fillets are sold for NIS 100 per kilo. Mega Bull sells salmon fillets for NIS 90 per kilo, Hatzi Hinam sells salmon fillets for NIS 89.90 per kilo, and salmon steaks for NIS 79.90 per kilo. All three chains have not changed their prices.

Mega Bull claims that while the price of salmon fillet remained unchanged, salmon steaks have dropped in price to NIS 64. Shufersal claims that starting this week the price of salmon in its stores will fall by 32%.

“It’s aggravating, because we could sell much more,” say the fish importers. “If at NIS 28 I make 7% on the fish and now want to sell 60 tons instead of 30 tons, I can’t, because someone at the end the of the supply chain stops me,” says a large fish importer.

“They’re taking advantage of the momentum. There’s tacit agreement throughout the system to screw the final consumer,” another fish importer says .

The cheapest fish prices found by Globes were in ultra-Orthodox neighborhoods in Jerusalem. The Weinstein store in Geula sold salmon fillets for NIS 75 per kilo, and whole salmon for NIS 45 per kilo. In Mea Shearim, Rosner sold salmon fillets at NIS 84 per kilo, and whole salmon at NIS 49.90 per kilo.

Rosner said he lowered the price of fish according to the price decline in the market.

“I have to make my percentage, I don’t care about the rest,” he said.

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