Best article you've ever written: Bloom is off the rose for China's seafood export revolution

Three different people emailed today saying the editorial on the FDA's country-wide detention of Chinese shrimp, catfish, and basa was "the best article you've ever written."

I am posting the whole editorial here to make it available to wider audience. Comments always welcome.

[Editorial] Bloom is off the rose for China's seafood export revolution

SEAFOOD.COM NEWS by John Sackton - June 29, 2007- [Editorial Comment] - No one in the seafood industry who has been paying attention was surprised by yesterday's FDA action issuing a country-wide import alert and detention for Chinese shrimp, basa, catfish, and some minor products.

The National Fisheries Institute and the Global Aquaculture Alliance, and several major importers who do business in China all said this move would strengthen the seafood industry, and that the testing and provision of healthful seafood products was critically important to the industry, and they praised the FDA's action.

Behind the scenes, however, its chaos. Several national retailers are reported to be scrambling to reduce the Chinese origin seafood products in their stores. One problem is that a huge percentage of private label products, such as breaded shrimp, are now products of China, and switching an entire private label line takes months.

Urner Barry's foreign trade data reports that in April and May, approximately 425 containers of Chinese shrimp entered the U.S. China supplies a significant and growing percentage of U.S. shrimp. Through April, NMFS data show China supplied 13.05% (21,141 metric tons) making China the third largest shrimp supplier behind Thailand (31.48%) and Ecuador (13.96%).

Current hold times on Chinese seafood products are often as long as 8 weeks at West Coast ports, and 4 weeks at East Coast ports. These are the average length of time it takes to get containers cleared and released by the FDA – whether they do sampling or not. Often the FDA will hold containers while they decide whether sampling is needed.

So far, according to the FDA, they have been sampling about 5% of all Chinese seafood imports. The change to a country-wide import alert is going to put huge financial and logistical pressure on the industry.

Many shipments from China now on the water will take much longer to get cleared, even with all the proper testing and documentation. And some industry concerns have been expressed about the storage space, ability of FDA and private laboratories to due timely sampling, and of course, the financial considerations that come into play when shipments are delayed and not cleared as expected.

Overall, the industry is looking at huge disruptions, which hopefully will be managed in a way not really felt by customers. But there are bound to be repercussions.

In some ways all parts of the industry- from processors who ship product to China, to importers who bring in both wild and farmed product, and to their customers which include all the major retail chains and the foodservice industry in the U.S. – are to blame for the increased costs, confusion, and economic pain that is going to result from these widespread detentions.

We as an industry have made our bed in China. And there are some fantastically clean and successful processing plants that have been built there. But in pursuit of lower costs, the move to China has always had a down side. Costs were lower, but so was transparency.

In many ways China remains a closed society, where the normal transparency that prevents many business abuses in the West is not in place. So for example, in the recent melamine scare, when the FDA sent inspectors to China they were unable to talk directly to the factory involved.

The concept was mentioned by an industry source: the idea that the lack of transparency in China could come back to haunt us.

For two years or more, many in the seafood industry have been screaming about the issue of Economic integrity – also largely the result of cost cutting and rule breaking in China. How do you tell a processor who is willing to cheat on net weight, to label a product additive free and than add chemicals, or to mislabel a species altogether that that's okay, he just can't use illegal chemicals in aquaculture.

The fact is you can't. A business culture of lawbreaking doesn't pick and choose which laws to follow, and which to ignore. This type of culture ignores any law that hurts profits, or that gives a lawbreaker a competitive advantage.

Unfortunately, too many in the industry embraced this point of view, and took the position that if the customer wanted it, it was okay. So if the customer demanded $1.50 cod when the real market price was $2.95, we gave it to them. If the customer demanded cheaper shrimp, we gave it to them – by short weights, by soaking, and now it seems by some other methods as well.

In this sense the food safety crackdown on China could in fact be good for the entire U.S. seafood industry. It is a wake up call that shortcuts have their price, and that in producing a food product, there is a bottom line of safety, wholesomeness, and value that cannot be crossed. Too many in our industry knew they were crossing the line, but felt helpless to do anything about it.

Now the FDA has stepped in and done us all a favor.

As one importer who deals with China said, he is glad to see testing. He fully expects to see his companies get off the automatic detention list, he has tests in place in China as well as the U.S., and wants to give his customers guarantees that their products are contaminant free and wholesome. For him, the FDA halting the substandard shipments is a blessing, because it allows him to differentiate himself.

So it will be with other Chinese companies. Six months from now, there will be a list of Chinese companies, published by the FDA as exceptions to the country wide alert, that are certified as being free from selling contaminated products, and who have procedures in place in China to prevent contamination from entering their supply chain.

But the cost of this is horrendous. Many consumers will simply stop buying fish from China. Many others will stop buying the types of fish mentioned—such as catfish—out of fear that something is wrong.

The companies who have private labels, and the distributors who have felt the need to push for the switch to Chinese seafood products may reevaluate the true cost of these actions.

In the end, this is country-wide detention is a blow for seafood integrity, and the industry is right to get behind it. Yet, at the same time, we should never have allowed things to get to this point.

--John Sackton

Comments

[e cigarettes]

I am beginning to really lose all faith and credibility in the FDA. It seems to me that instead of focusing their efforts on protecting the general public they are in-turn being influenced by corporate agenda and special interest. I take everything they say with a grain of salt.

[Roy Palmer]

Jack True words and as you rightly point out everyone is to blame. Good timing for the nFI and their new integrity group, Better Seafood Bureau. The Global Industry needs to work together much more than ever and turn this negative into a strong positive for the Future and where better to start that than in Dublin, Ireland at the IAFI World Seafood Congress - see you there Regards Roy