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Expansion and Consolidation in The British Columbia Salmon Processing Industry

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  • The industrial structure of British Columbia salmon processing is dominated by cycles of expansion and consolidation. This paper examines one of these cycles, the reasons for it, and its implications. The cycle starts with a consolidation of processors. The resulting increased industry profits encourages new firms to enter the industry and existing firms to grow. Processing capacity expands and, with more firms competing for a supply of raw fish, fishing capacity and pressure on the resource increase. Eventually excess capacity is created, losses suffered, and mergers again proposed. From 1902 to 1928 the industry went through such a cycle. In 1902 over half the processing plants were brought into one company. The next twenty-five years saw a gradual erosion of the dominance of the leading firm as new firms entered the industry and other expanded. The normal oligopolistic barriers to entry were not viable restrictions on entry into salmon processing. All canners produced an undifferentiated product primarily sold on world markets through brokers. Technological changes, while raising the initial cost of entering canning, also helped ease problems with labour shortages. Rapid adoption of many innovations was not necessary, the pace of adoption varied. Additionally, the variations in salmon runs encouraged overcapacity and the perishability of raw fish limited the concentration of processing . The absence of alternative uses for the processing plants and other inputs was a barrier to exit. Eventually over expansion resulted, losses occurred, and another series of mergers took place.
  • Keywords: salmon, Fisheries Economics, fish processing, British Columbia, industrial structure, Fish Processing, Marketing, And Consumption
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  • Millerd, Frank. 2004. Expansion and Consolidation in The British Columbia Salmon Processing Industry. In: Proceedings of the Twelfth Biennial Conference of the International Institute of Fisheries Economics & Trade, July 20-30, 2004, Tokyo, Japan: What are Responsible Fisheries? Compiled by Ann L. Shriver. International Institute of Fisheries Economics & Trade, Corvallis, Oregon, USA, 2004. CD ROM. ISBN 0-9763432-0-7
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