7. Potential problems for Asia–Pacific producers in relation to certification and branding

Previous Page Table of Contents Next Page

7. Potential problems for Asia–Pacific producers in relation to certification and branding

7.1 Potential problems with environmental certification

Concerns in the literature about environmental certification are based around a number of issues, as highlighted in many studies, and grouped in a recent study by Gardiner and Viswanathan (2004) into a classification of concerns that is considered useful, and therefore also used in this paper. These concerns, and some comment on them, are discussed below.

Legitimacy and credibility

Many schemes have largely been driven by retailers in developed country markets, with a lack of real participation by small-scale and poor producers in developing countries. This lack of involvement is claimed to have potentially negative impacts on developing country and small-scale producers. To a certain extent such claims may be true in terms of a lack of stakeholder consultation. While more could probably have been done by these developing schemes, access to all relevant stakeholders is both costly and time consuming.

A mismatch between certification requirements and the reality of tropical small-scale fisheries

The process of certification is claimed by many to be more relevant to developed northern countries, often with single species fisheries, than to tropical developing countries, many of which have mixed-species fisheries. Concerns stated often relate to both the limited data available in many developing country contexts necessary for certification and the fact that management issues are often more complex in developing country contexts from a biological point of view, although not necessarily more complex politically if one considers fisheries management in the EU. However, as noted earlier, the impression of greater suitability of developed country fisheries may in part be due to the fact that there has been greater targeted effort by schemes such as the MSC in such areas, mixed species fisheries have been certified and the ongoing work by the MSC to develop specific guidelines for certification in data-poor and small-scale fisheries (Guidance in Assessing Small Scale, Data Deficient Fisheries [GASS/DD] project). This work has not to date included any Asian countries, but could do so.

Potential distortions to existing practices and livelihoods

Domestic markets in developing countries tend to be more sensitive to prices than export markets, due to lower incomes of local populations and if ecolabeling results in, or requires price increases to make it justifiable to producers, increased sales to exports markets may reduce availability of fish for local consumption. Of course, whether this is really relevant to the food security of the poor in developing countries depends on the primary species being consumed in developing countries by the food insecure and the species considered for certification and whom it is being consumed by (i.e. the poor or the urban middle class). It should also be noted that the Asian middle class is already huge and still growing. Some estimates suggest that the middle class in India can be counted at around 250 million i.e. close to the population of Europe. It is also claimed that a shift in emphasis towards export markets could also potentially have significant impacts on who benefits from trade (Kurien 2000). Generally women comprise a significant proportion of postharvest employment in the fisheries sector, especially where processing and marketing is small-scale and local in nature. Increased sales to export markets would be likely to have significant gender impacts, with larger-scale buyers (probably men) being able to outcompete small-scale female buyers at landing sites, due the higher prices being paid for certified products. And if certification did have the predicted price effects in developed country markets it would be likely to reward intermediaries and the postharvest chain-of-custody, but not necessarily the fisher (Kurien 2000; SEAFDEC 2001). This may happen, but if the market is competitive enough and the demand for certificated prices is high, market chains should/could also work more effectively in breaking down barriers for the poor, especially women who are often more able and suited than men to adapting to newer processes. In addition, it should be recognized that other factors, e.g. urbanization, macroeconomic conditions, etc. are probably far more important than the impacts of any ecolabeling on the distributional benefits of trade.

It is also claimed in some literature that price differentials for certified products may actually increase pressure on particular stocks and diminish sustainability. For non-MSC schemes this may be true. However, the MSC requires evidence that the management scheme can handle increased demand. A fishery's management must demonstrate a robust adaptive strategy that ensures that changes in the external environment do not impact on the long-term sustainability of the stock. If management were to fail and harvest levels became unsustainable, a fishery would lose its certificate.

Equity and feasibility

It is often argued that it may be harder for smaller enterprises in developing countries, exploiting lower value fisheries, to participate in certification, especially given the relatively high costs. This problem has two components.

First, smaller-scale fisheries are less likely to find that any benefits from certification outweigh the costs. But second, and in addition, certification costs must be paid in advance, while benefits will not accrue until after the product is caught and marketed. Small-scale producers in developing countries are less likely to be able to "front-up" the money required for certification due to difficulties in accessing credit and lower overall earnings/profits. Raising funds from the government and from stakeholders in developing countries, is likely therefore to be harder than in developed countries.

Secondly, the potential for certification may not be equitable or feasible if local fisheries administrations lack the capacity to effect management improvements and comply with certification requirements. Developing country managers are less likely to clear the main hurdles of certification than their counterparts in developed countries. Such concerns appear to be justified based on the experience of the Forestry Stewardship Council.21 However while practical considerations in terms of limited budgets/finance for improved management in developing countries should not be discounted, this in itself does not support an argument that fisheries in developing countries should not be better managed.

Perceived barriers to trade

It is claimed by some that ecolabeling can or will be used as a deliberate barrier to trade. It seems most unlikely that developed countries will, or indeed would be able under WTO rules, to ban any imports of a product unless it was certified under a particular scheme. Barriers to trade are therefore more likely to be presented when individual processors/retailers in developed country markets specify that they will only buy certified products within a certain period. However, one cannot argue against the choice of a buyer to purchase from wherever he/she chooses, in order to comply with any purchasing policy and to meet consumer demands, and producers have the freedom to comply with buyer requirements should they wish to do so, subject to the costs associated with required management changes. In addition, it is important to consider market segmentation in developed countries and who is supplying products into different

21 FSC, the timber equivalent to the MSC.

markets, and from where. An MRAG/IIED (2000) study for example considers that given that the main exports from developing countries are tuna and shrimp, the impacts of certification may be minimal, because trade effects will be moderated by the limited degree of substitution towards competing products from certified fisheries in the developed world and because high sea migrations of the most valuable tuna species make them a difficult target for artisanal fisherfolk. Analysis of trade flows for the United States and Europe shows how infrequently imports from developing countries (and particularly low-income developing countries that are in the tropics) have close substitutes from developed countries where certification is perhaps more likely to occur.

The extent to which certification and labeling will, or could, be used to represent a barrier to trade ultimately depends on the demand for certified/branded product in different markets and the extent to which producers comply with buyer requirements. While there seems to be a general consensus that the most promising markets will be those in Northern Europe and North America where consumers are relatively affluent, sensitized to environmental/social issues and used to this form of product differentiation (Deere 1999; MacMullen 1998), there is actually no clear evidence on how big the environmental and social markets are likely to become in these markets, or indeed in other markets.

7.2 Potential problems with branding

High costs and economies of scale

Costs to develop and promote brands can be huge and a potential problem for individual firms, or even groups of firms acting together because single (or groups of) producer(s) may well not have sufficient capital to invest enough in advertising to have a perceptible effect on the demand for products. Evidence suggests (Tveteras et al. 2006) that companies with large resources in product development, market intelligence and distribution, which have long experience from promotion of many products and which are present in the market, have competitive advantages in brand promotion.

Risks and barriers

When a firm invests in promotion of its own branded product, the sales price can only increase if it has a sufficiently differentiated product. Critical questions in assessing the benefits of brand promotion and factors that may prevent benefits from being realized are:

This list of questions makes it clear that there are many risks and barriers that can prevent the potential benefits, to both producers and suppliers/retailers in Asia and the Pacific, of branding from being realized. And the first question in the list of bullets above may be especially pertinent for producers of seafood; brand promotion is related to products that can be differentiated by consumers, and this may represent a challenge to producers who market fish products with little or no differentiation. Tveteras et al. (2006) ask how do you successfully brand products that resemble those in Figure 8 and they suggest that where differentiation is difficult, expense incurred in branding exercises by one producer/firm, may very well end up benefiting others. That is not to say that branding of fish products is not possible and the example of the successful promotion campaign for Norwegian salmon has already been mentioned. But it is important to consider the considerable amounts of investment that go into such branding; investment that may, or may not be available to Asia–Pacific producers/exporters.

Figure 8: Can products such as these be branded?

Source: Tveteras et al. (2006).

Distance from the consumer?

One of the risks also suggested above, is that the distributors of a product branded by producers or exporters in Asia and the Pacific may not be willing to cooperate; this is a risk worth exploring in a little more detail because it raises the importance of considering who is going to do the branding, and how far down the supply chain they are from consumers. For retailers or other businesses in Asia and the Pacific selling directly to consumers, branding exercises may be a very sensible method of trying to add value. But producers may face many difficulties in developing a brand and ensuring that they capture any economic benefits, unless they are able to work out branding strategies jointly with others in the supply chain closer to the end consumer. This is because in destination markets in the EU, United States and Japan, retailers selling products from the Asia–Pacific region may choose to use their own branding/logo. Monfort (2006) for example notes how in France many retailers label fresh salmon products with their own labels to designate a wide range of product attributes including quality, environment, traceability, etc. Retailers' use of their own private labels/brands may therefore preclude producers in Asia and the Pacific from marketing initiatives aimed at branding their own products with a logo or packaging specific to the Asia–Pacific country/fishery/product/producer concerned.

Producers may be better served therefore by engaging with the wide range of alternative methods of differentiating themselves from competing suppliers; these methods might include:

7.3 Some solutions

It is now clear that many of the often-perceived problems of certification may be unfounded or exaggerated. However, the costs of both certification and branding schemes are certainly likely to pose problems in many countries in the Asia–Pacific region.

A number of possible solutions can be considered.

Table 4: Decision-making table for assessing fishery products for certification

Required characteristics

Product 1

Product 2

Product 3

Environmental certification requirements

Already well-managed, and/or only small changes necessary and/or realistic

Products sold to markets demonstrating demand for environmental certification (by either buyers or consumers)

Important in economic or social terms

Competitor products/fisheries are certified or will be soon


Branding could build on existing qualities of products/species, even if small changes/improvements might be necessary (as long as they are realistic)

Product being considered for branding could be differentiated from other products

Important in economic or social terms

Products sold to markets demonstrating demand for branded products, i.e. by all in the supply chain, and by end consumers

Competitor products/fisheries are branded or will be soon

Volumes/values of products are likely to be sufficient to make potential costs viable, depending on the destination market

Previous Page Top of Page Next Page