Stock market not the “safe-way” for salmon companies
Undoubtedly Chile’s salmon industry has been put through the ringer this year what with fish diseases, price and dollar value declines, and labour union conflicts. Now with the negative press put forth by The New York Times, what possibly more can go wrong? Well for starters, supermarket chains could boycott Chilean salmon and the stock market value of salmon companies could drop. And on a certain level that is what is happening. Safeway, one of the leading supermarket chains in the U.S. did indeed take the politically damaging bait last week and announced its discontinuation of purchasing Chilean salmon shortly following the publication the New York Times article, “Salmon Virus Indicts Chile’s Fishing Methods”. The article claims that the Chilean salmon industry indiscriminately uses antibiotics to deal with its current fish health crisis, ISA. If one to were dig a little deeper into the facts however, one would discover that ISA is a viral (not bacterial) disease, thus, it is doubtful that salmon companies are indiscriminately wasting effort or money on antibiotics to deal with the ISA problem. But coming from the New York Times, the story sounds accurate and the news spreads fast; and according to the Estrategia, the market share value of Multifoods fell 6.6% the day Safeway put up its boycott, and Invermar fell 4.9%. Patricia Pellegrini, stock analyst for food companies listed through LarrainVial Investments, affirms that the trend “could be nothing more than a normal reaction in turbulent times.” Although investing in Chilean salmon may not sound very safe at the moment, other large supermarket chains such as Costco have spoken up in defense and in favour of their salmon suppliers in Chile.
