Executive Summary

Sales of fish and fish products reached £2.19bn at retail selling prices (rsp) in 1999, an increase of 3.3% on the 1998 value. Per capita consumption of fish and fish products actually declined in 1999 and has been in decline since 1996. However, strong price increases in the market have driven up market value. In the year to November 1999, fish prices increased by 2.8%, with prices in the fresh fish sector rising even more sharply. Nevertheless, in real terms, 1999 saw the value of the market decline for the third year running. Sales of fish and fish products account for 4% of total consumer expenditure on food.

The three main sectors of the retail fish market are fresh and chilled fish, canned fish and frozen fish. The fresh and chilled fish sector was the strongest performer in 1999, with sales increasing by 6.7%. More fresh fish sales through supermarkets and multiple grocery chains, and the development of a range of prepacked fresh products, have been the factors helping to grow sales. Salmon is now the most popular purchase in this sector, followed by cod and haddock.

Frozen fish is the largest sector, with fishfingers accounting for the largest share of volume sales. Other key segments are fish main meals and breaded fillets. Premium ready meals and stronger new product development in 2000 will contribute to the development of this sector. Canned fish is the most mature market and, while sales continue to rise, growth is slow. The sector is led by canned tuna sales.

The UK is a traditional fishing nation, but the UK fishing fleet is declining, along with the number of fishing businesses. Reduced fishing quotas imposed by the Common Fisheries Policy (CFP), higher fuel costs and the need for substantial investment on new equipment have forced many fishermen out of the industry. However, the number of commercial fish farming operations is increasing.

The fish processing sector is becoming more concentrated and a major merger at the end of 1999 created one of the largest seafood businesses in Europe. Young's Seafood Ltd and Bluecrest Seafood Ltd merged to form Young's Bluecrest Seafood Ltd. Other major suppliers include Fisher Foods Ltd, Birds Eye Wall's Ltd, and leading food manufacturers such as HJ Heinz Company Ltd, Northern Foods PLC, and Hazlewood Foods PLC. Imports are taking a larger share of the UK market and the UK trade deficit in the sector is increasing. In 1999, fish imports were valued at £1.28bn, while exports generated just £765m.

In the latter part of 2000, price increases should begin to ease in many fish sectors, while new product development activity should stimulate more consumer interest. This will lead to an increase in volume consumption and a 3.6% rise in value sales. Fresh and chilled fish sales will continue to show the strongest growth. More convenience foods, such as snacking products, and more products targeted at younger consumers, will be developed. Key Note forecasts further growth of 9.5% between 2000 and 2004, bringing the market's value to £2.48bn at rsp.

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