Costco chooses Norwegian over Chilean
Chile currently provides Costco with about 90 per cent of its farmed Atlantic salmon, and Norway just 10 per cent. But starting in June, Norway will fulfill about 60 per cent of Costco’s needs with antibiotic-free salmon, with Chile accounting for the remainder, said Jeff Lyons, the senior Costco executive in charge of fresh foods, in an interview with the Seattle Times.
Costco purchases about 15,000 tonnes of salmon filet per year, which is close to 10 per cent of all US Atlantic salmon imports from Chile.
The decision, according to Lyons, is the result of an unusual alignment of geopolitical, financial and market trends.
First, in recent months the US dollar has strengthened against the Norwegian krone, which has suffered due to the fall in oil prices.
Second, Norway’s foreign policy seems to have wrought havoc with important trade relationships for its fishing industry.
In 2010 the Nobel Peace Prize was awarded by its Norwegian custodians to Chinese dissident Liu Xiaobo, infuriating Beijing. Since then China has imposed various bans on Norwegian salmon. And last August the Kremlin banned food imports from Norway as retaliation for sanctions imposed by Western powers over Russia’s moves against Ukraine.
Thridly, Lyons said Costco was able to nudge Norwegian salmon farmers toward offering salmon raised without antibiotics, which would be welcomed by consumers.
However, Ricardo Garcia, CEO of Camanchaca, said to the Chilean Securities and Insurance Supervisor that Costco is not ditching Chilean producers, but testing the market’s appetite for antibiotic-free products. “Given the shortage supply of this type of product in Chile, Costo chose to test with Norwegian product,” he said.
Regarding the presence of antibiotics, Mr García commented that Q4 2014 results show traces below 100 parts per billion, which is less than a tenth of the maximum limit established by the Food and Drug Administration, “proving that Camanchaca’s products are completely safe for human consumption.”
