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Tasmanian salmon farms. Photo courtesy of iStock by Getty Images

Multinational Meatpackers Move in on Aquaculture

As the global appetite for seafood grows, multinational meatpackers want to expand their protein production prominence to the seas. Last month, JBS announced plans to take over Australia’s second-largest salmon corporation [[link removed]], Huon Aquaculture Group, for $314 million (US). The deal stokes environmentalists’ and small fishing communities’ fears that the rapidly growing aquaculture industry will take the shape of consolidated livestock production, reaping profits for a powerful few while fouling the environment and driving out independent fishing businesses.

“We have just a handful of companies in the world that are a controlling force when it comes to … food production on land and the thought of those same companies controlling space in the ocean for aquaculture and … [having] some control over the seafood system — it’s horrifying,” says Rosanna Marie Neil, chief counsel for the Northwest Atlantic Marine Alliance. “It could be the continuation of a disturbing trend.”

Fish farming, or aquaculture, is the fastest-growing [[link removed]] form of food production in the world. As wild fish stocks decline [[link removed]] and demand for seafood continues to grow [[link removed]], experts increasingly look to farm-raised fish [[link removed]] to fill the gap. Major meat corporations looking to provide protein to the world have signaled interest [[link removed]] in this booming industry. Now the world’s largest meatpacker, JBS, may be the first to dive in with its takeover of Tasmania’s Huon Aquaculture Group.

"This is a strategic acquisition," said JBS global chief executive officer, Gilberto Tomazoni, in a statement [[link removed]]. "We will repeat what we did previously with poultry, pork and value-added products to make our portfolio even more complete." Brazil-based JBS is the top global producer of beef and poultry [[link removed]] and a leading producer of lamb and pork, with several facilities in Australia. Australian antitrust enforcers are already investigating [[link removed]] JBS’s takeover of pork corporation Rivalea, which it bought in April.

Other dominant meatpackers will soon follow. Competing beef and poultry packer Cargill has spent billions acquiring [[link removed]] fish feed corporations. The corporation’s chief executive officer, Dave MacLennan, said in an interview earlier this year [[link removed]] that Cargill is actively looking to buy fish farms too. “We want to further integrate in the seafood supply chain and we don’t own anything yet, but we are scouting for opportunities,” MacLennan told Bloomberg.

JBS and Cargill will be able to leverage their existing relationships with global distributors and major food retailers to make a quick entry into the seafood industry. Both giants are investing in industrial, vertically integrated aquaculture empires in the mold of their meat businesses. These tightly controlled and consolidated supply chains have pushed out smaller livestock farmers, and now independent fishermen fear that they’ll also be displaced by larger corporate farms.

“It will introduce more vertical integration in the supply chain; you likely would have a lot of the same companies that are controlling seafood production also controlling seafood processing, and that will have a restrictive effect on independent fishermen,” Neil says. “It would definitely create unfair competition with seafood that is wild caught; it could have a depressing effect on prices.”

Neil says the threat of seafood consolidation moves the industry in the wrong direction, especially after large seafood companies with complex supply chains struggled to provide food during the pandemic. “What we found is that small- and medium-scale seafood harvesters and seafood businesses were the most resilient,” Neil says. She noted this was particularly true for those businesses with direct consumer relationships and local processing.

Further industrialization of aquaculture, fueled by agribusiness cash, also raises major environmental concerns. While farmed seafood can be a less resource-intensive [[link removed]] and more climate-friendly source of protein, it all depends how it’s raised [[link removed]]. Huon Aquaculture Group raises salmon in controversial open ocean net pens. High densities of fish stocked in these large floating pens introduce massive volumes of fish poop [[link removed]] as well as antibiotics, pesticides, and other chemicals into marine ecosystems.

Waste from fish is a natural part of the ocean, but waste from hundreds of thousands of fish circulating the same small area can become harmful. Excess nutrient pollution from concentrated fish poop fuels oxygen-sucking algae blooms and dead zones, killing off ocean plants and animals. Farmed fish can also escape and threaten wild fish stocks by introducing diseases, competing for resources, or altering wild gene pools through interbreeding (a particular concern where farms raise genetically engineered fish [[link removed]]). Because offshore net pen aquaculture generally requires large upfront capital investments and high-volume production to be profitable, this type of production favors larger, wealthy players and can further consolidation.

Huon Aquaculture Group is already a large corporation, controlling 40% of the Australian salmon market [[link removed]]. Huon expects to harvest 35,000 metric tons of seafood this year from its vertically integrated network [[link removed]] of salmon and trout hatcheries, 13 net pen farms [[link removed]], processing plants, and distributors. The corporation exports 15% of its production. It’s also been criticized by community members [[link removed]] for polluting waterways, killing marine life, and threatening wild fisheries [[link removed]] in Tasmania.

For example, industrial salmon development in Tasmania’s Macquarie Harbour, a world heritage site, resulted in an environmental disaster in 2018 [[link removed]]. Dangerously low oxygen levels, almost certainly due to nutrient pollution from salmon farms, killed over a million salmon and other marine life, including the rare maugean skate which is now near extinction. Upstream, Huon Aquaculture hatcheries have also been blamed for algae blooms on the Derwent River, which have deteriorated local drinking water and required some $175 million [[link removed]] (US) in taxpayer dollars for water infrastructure upgrades.

Despite these events, the state government has backed plans to double [[link removed]] the value of Tasmania’s salmon industry by 2030. Huon and other Tasmanian salmon corporations have been accused of cozy relationships [[link removed]] with government regulators who greenlight industry expansion with little meaningful oversight. In fact, in early 2019 [[link removed]] two scientists on a salmon environmental review panel resigned in protest [[link removed]] after their concerns were allegedly ignored. “It was stated multiple times ‘the minister will approve it anyway,’ so it doesn’t matter what we say,” Louise Cherrie, one of the scientists, told filmmakers [[link removed]], in an exposé about the Tasmanian salmon industry.

Critics say JBS ownership will only make these issues worse. JBS sources meat from confined livestock operations, which are just as controversial and polluting [[link removed]]. Investigations also show that JBS’s beef supply chain drives illegal deforestation in Brazil [[link removed]] and the Amazon [[link removed]]. Expanding aquaculture production into public waters also requires government permits, and JBS has a history of corruption. Executives have pleaded guilty [[link removed]] to bribing government officials to secure sweetheart financing and export tainted meat [[link removed]].

Mining magnate Andrew “Twiggy” Forrest, an investor with concerns about JBS’s environmental commitments, doubled his stake in Huon [[link removed]] after the takeover announcement in an apparent attempt to influence the deal. The Tasmanian Alliance for Marine Protection also opposes the deal [[link removed]], citing JBS’s shuttering of Tasmanian meatpacking plants [[link removed]] funded with government subsidies [[link removed]].

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What We're Reading

Organic dairy farmers in the Northeast scramble to find new buyers after Danone, owner of Horizon Organic, announced intents to terminate dozens of contracts. ( VTDigger [[link removed]])

Legislation in North Carolina will fast-track environmental permitting of biogas digesters on industrial hog farms. Environmental justice advocates worry about decreased community input. ( Inside Climate News [[link removed]])

Record dry spells in the Midwest are straining cattle feed supplies and forcing some ranchers to sell off herds early at “at fire-sale prices” to stay afloat. ( The New York Times [[link removed]])

About the Open Markets Institute

The Open Markets Institute promotes political, industrial, economic, and environmental resilience. We do so by documenting and clarifying the dangers of extreme consolidation, and by fostering discussions of ways to reestablish America’s political economy on a more stable and fair foundation.

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Tweet [link removed] Share [[link removed]] Forward [link removed] Written by Claire Kelloway

Edited by Phil Longman and LaRonda Peterson.

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