Overview of Covid-19 impacts on the seafood industry

A summary of how Covid-19 has impacted the seafood industry during January to June 2020.

Initial impacts: January and February

Businesses selling into Chinese markets may have experienced initial impacts from Covid-19 as early as January but these were minimal.

It was not until February that UK seafood businesses really started to feel the impacts. This was when cases rapidly increased in China and began to spread in Europe. At this point the governments of key seafood trade nations imposed lockdowns and trade restrictions.

UK lockdown begins: March

The UK Government and devolved administrations decided to enter lockdown at the end of March. This placed seafood markets in the UK under heightened pressure:

  • Both foreign (e.g. export markets) and domestic foodservice markets collapsed as eating out ended.
  • Both import and export markets were further constrained by reduced transport and logistics timetables. Exports were hit harder because many of these markets disappeared overnight
  • Retail sales surged as shoppers stockpiled – pre-packed, tinned, and frozen seafood were most popular.

These market shocks rippled back to processing businesses:

  • Impacts on individual businesses varied depending on which markets they served.
  • Issues with regularity and reliability of logistics networks were common. They affected both sourcing of sourcing raw material and supplying product to customers.
  • Businesses also had to adapt to new social distancing requirements during production.

The impacts also affected businesses at the supply end:

  • Demand and market uncertainty proved a considerable challenge for fishing.
  • Fish auctions closed or reduced operations, prices became increasingly volatile and markets began to fail.
  • New social distancing requirements and reduced demand slowed aquaculture harvests.
  • Imports also declined as a result of closures in other countries, limited transport capabilities and reduced demand from UK markets.

April onwards

Lockdown continued into April with businesses across the seafood supply chain facing uncertain operating conditions.

Governments offered an unprecedented level of financial support to assist businesses and employees during the lockdown period. However, businesses had no clear idea of when export and UK foodservice markets would return.

Many seafood processing, wholesale and smaller retail businesses closed or reduced their operations. While some businesses closed permanently, others adapted their products to retail formats, developed online sales or take away and delivery options.

On the supply side:

  • Many fishing vessel owners created or grew existing direct sales and delivery operations.
  • Various local efforts were made to coordinate and stagger landings.
  • Vessels stopped fishing as auction market prices remained volatile and demand low – particularly for species typically exported.
  • The potential long-term impacts of disruptions on aquaculture production were also brought to light.

Reduced market demand and processing capacity from April to June had a direct impact on raw material supply and price. Both UK landings and imports were considerably lower than in the same period last year.

Towards the end of May and into June restrictions started to ease at home and abroad. Businesses slowly began to come reopen and rebuild their capacity.

Government response

Following the announcement of the UK lockdown, government support measures were introduced across all four devolved administrations. These measures were designed to support individuals and businesses throughout the lockdown period.

Support schemes ranged from general employee furlough schemes, VAT deferral, small business grants, business loans and statutory sick pay relief, to seafood specific funds including fisheries and aquaculture support funds and the Scottish Seafood Business Resilience Fund.

Illustrations of impacts across different sectors

The following diagrams provide a high-level overview of the direction and magnitude of Covid-19 impacts on different parts of the UK seafood supply chain over the first six months of 2020.

Diagram with colour coded icons to show impacts across sectors in supply, production and distribution and markets - as listed below
Colour key for diagrams below

Supply Chain: "Pre-COVID" (January to February 2020)

Shocks: UK operations largely businesses as usual in the new year, despite first reports of Covid-19 outbreak in China at the end of 2019. Chinese lockdown towards end of January reduced some UK seafood trade, negatively impacting some aquaculture and processing businesses.

Diagram with coloured icons to show impacts across supply, production and distribution and markets sectors pre-covid-19 (listed below)
Diagram showing Covid-19 impacts - January to February

Supply

  • Landings - similar to 2019
  • Aquaculture - mild negative effect
  • Imports - mild negative effect

Production and Distribution

  • Fish auctions - similar to 2019
  • Transport and logistics - similar to 2019
  • Processing - mild negative effects

Markets

  • Food service - similar to 2019
  • Retail - similar to 2019
  • Exports - mild negative effect

Supply Chain: "Peak lockdown" (March to May 2020)

Shocks: WHO classes Covid-19 as a pandemic. Key EU export markets for UK seafood begin to close in March. UK lockdown announced on 23 March, effectively closng the UK foodservice market. In response retail sales boom and new direct sales markets emerge.

Diagram with coloured icons to show impacts across supply, production and distribution and markets sectors at peak lockdown (listed below)
Diagram showing Covid-19 impacts - March to May

Supply

  • Landings - strong negative effect
  • Aquaculture - mild negative effect
  • Imports - mild negative effect

Production and Distribution

  • Fish auctions - strong negative effect
  • Transport and logistics - mild negative effect
  • Processing - strong negative effect

Markets

  • Foodservice - strong negative effect
  • Retail - strong positive effect
  • Exports - strong negative effect
  • Direct sales - strong positive effect

Supply Chain: "Restrictions begin to ease" (June 2020)

Shocks: Lockdown restrictions begin to ease in key EU seafood export markets in late May and at home in June. In response, some businesses gradually return to work. UK retail and direct sales remain strong.

Diagram with coloured icons to show impacts across supply, production and distribution and markets sectors as restrictions ease (listed below)
Diagram showing Covid-19 impacts - June

Supply

  • Landings - mild negative effect
  • Aquaculture - mild negative effect
  • Imports - mild negative effect

Production and Distribution

  • Fish actions - similar to 2019
  • Transportation and logistics - similar to 2019
  • Processing - mild negative effect

Markets

  • Foodservice - mild negative effect
  • Retail - strong positive effect
  • Exports - mild negative effect
  • Direct sales - strong positive effect

Read more about Covid-19 impacts

Contact

For more information contact:

Ana Witteveen
Economist
t:
0131 524 8659
m:
07815 428 554