Italy's Seafood Annual Report
AGR Number: IT5709

From: American Consulate General, Milan, Italy
To: USDA/FAS Washington D.C.
Country: IT
Year: 1995
Report Code: 54 Post Report Sequence Number: 002
Report Title: Seafood
Report Type: A - Annual Report
Report Subject: Annual Report
Approved By: H Higgins
Drafted By: W Besozzi
Security Classification: Unclassified - Not official USDA Data
Date Due (MM/DD/YY): 09/15/95

Report Code: IT9554A
AGR Number: IT5709
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Seafood

General Summary

Italy is a net importer of seafood and imports account for over half of domestic consumption. In 1994 the Italian fish trade deficit reached 3,056 billion lire (up 6 percent compared to 1993). Imports were valued at 582,000 metric tons in quantity or 3,515,145 Italian Lire in value. The larger deficit is mainly due to the weak Italian Lira, which has hurt high-value exports to Italy from all countries. Consumption of seafood and fish --fresh and frozen-- is growing at a steady pace, despite the current economic difficulties. Italian consumers are generally willing to pay high prices for good product. Exports are small and decreasing every year. The United States main exports to Italy are fresh lobster and frozen squid, but surimi and salmon exports from the U.S. have increased their market share recently. Total U.S. seafood trade with Italy decreased slightly in 1994 to $ 29 million, down 2 percent compared to 1993, due to th  high U.S. dollar against the Italian lira.

Exchange rate: 1 U.S. $ = Lire 1,612

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Seafood

Total Edible Fishery Prods.

The above PS&D includes data for finfish, shellfish, mollusks and crustaceans. Initial stocks and ending stocks are not available. Therefore, we assume stocks are more or less constant year to year.
Sources: ISTAT, IREPA, ICRAM, ANCIT and AgOff Estimates.

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Total Edible Fishery Prods.

The decrease in production of mollusks and bivalves is directly related to a phenomenon of overfishing in the past year. The following table provides a snapshot of production and trade for shellfish, mollusk and crustaceans from the limited available data.

SOURCE: ISTAT, Associazione Nazionale Conserviere Ittici e delle
Tonnare, AgOffice Estimates and Forecasts(*)

COMMODITY OUTLOOK, PRODUCTION, TOTAL EDIBLE FISHERY PRODUCTS

DOMESTIC SITUATION

Italy is surrounded by sea with over 8,000 kilometers of coastline including the islands of Sicily and Sardinia. In addition, there are 150,000 hectares of lagoons and marine ponds totaling 170,000 hectares. Since the extension of the 200 mile limit zones and the consequent decline in the total catch, Italy has been forced to downsize its fishing industry as their high-sea vessels were not suited for the Mediterranean fishing.

The fishing industry is composed of a large number of small scale coastal fisheries. Heavy investments in modernization of the industry have been undertaken in the past 5 years to allow for expansion. The Italian fishing sector is quite diverse in terms of the local fleets and the type of equipment employed.

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DOMESTIC SITUATION

CATCH PRODUCTION FACTORS

As of January 1994 the number of Italian fishing vessels decreased to 15,724 compared to 16,727 in 1993. In spite of this drop, the fishing capacity (gross tonnage) increased to 245,211 MT (217,243 MT in 1993) while horse power (engine size) decreased t   1,451,727. The following table sets out the main activities of the fleet as of January 1994, the latest figures available:

Source: ISTAT, IREPA

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DOMESTIC SITUATION

The Italian fishing industry is slowly progressing in meeting the new regulations and standards set by the EU under the unified market directives. This includes modernization of the fleet (construction of new vessels and vessels refitted), as well as improved port infrastructure, collection points and distribution systems in order to better control the health conditions of the production and the distribution of fishery products.  Italy will receive 391.8 million ECU (or 800 billion Lire) as EU funds for structural improvements in the fishery and aquaculture sector and for improved processing and new marketing activities for the period 1994 - 1999. The new EU policy for member states like Italy is to find a better balance between fishing activities and the real availability of fish resources. At the end of 1994 the GOI approved and committed a financial compensation of 211 billion Lire for the period 1994-96 in order to meet the EU Directives 302/89 and 72/93. (i.e. to help in reorganization of fishing cooperatives, funding of ISMEA etc..)

One of the major concerns for the future production is that modern technology is allowing fleets to catch increased quantities while causing the depletion of fishing stocks. The EU, in order to protect fish resources, has set the new lengths for the catch (regardless where the fish is being caught from the North Sea or the Adriatic sea). This directive particularly hurt Adriatic fishermen who claim that the minimum length of adult cod, hake and anchovies caught in the Adriatic sea is shorter than what was fixed by the EU Commission. Italian fishermen are hopeful that the EU directives will be modified after supervisory visits by EU experts.

FISHING PORTS

In Italy there just over 800 landing ports equipped for fishing boats. However, only one-third of the total Italian catch is accounted for by po t reporting authorities. The majority of Italian ports are not sufficiently equipped to provide the range of services necessary to ad quately handle unloading and sale of the catch. The unloading and distribution of a fishermen's catch can be extremely fragmented. There are multiple possible landing places for a single vessel. At the commercial level there are numerous distribution channels. The ports of Mazara del Vallo, Palermo, San Benedetto del Tronto, Chioggia-Venezia and Genoa are the most important ports based on the size of landings.

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DOMESTIC SITUATION

PRODUCTION MIX

The table below shows the landings by species for the period 1992-1994.

Source: Assn. Nazionale Conservieri Ittici, ISTAT, AgOffice Estimates

Total landings reported in this table represent only the product that it is accounted for at public fish markets. The majority of the Italian harvest (up to 50 percent of total) is not officially recorded but is sold directly to restaurants, wholesalers and fishmongers.

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DOMESTIC SITUATION

DOMESTIC HARVEST - WILD CATCH

The total wild harvest landed in Italy in 1994 remains about the same level as the previous year (353,500 MT). The production of finfish and pelagic species increased by 4 over the previous year. Squid, octopus and cuttle fish production increased by 16 percent largely thanks to more sophisticated equipment being used. Mollusks/shellfish production encountered a 12 percent reduction in 1994 which is attributed to a substantial overfishing of the previous year and --to a smaller extent-- a pollution problem. The crustacean catch increased by 5 percent.

Italian fishing methods vary from coast to coast. The Ligurian and Tyrrenian sea fishing zones have typical Mediterranean characteristics with a predominantly artisanal organizational structure. The artisan style fishing is the result of the GOI's desire to protect against substantial variations in the biomass of certain types of fish and in order to have greater flexibility and diversification in fishing. The total catch in this area is of variable quality. The type of fish caught mostly falls into the category of "other fish", followed by pelagic species, (i.e. sardines, anchovies, tuna, swordfish), demersal fish and hake (merluccius merluccius, mullus barbatus and aristeidi).

The Adriatic sea catch consists mainly of mollusks (clams: venus gallina, chamelea gallina, venerupis aurea), crustaceans, demersal and pelagic fish. Sea fishing in Sicily is characterized by the presence of the industrial fleet from Mazaro del Vallo which operates in the Sicilian channel. Hake is the main catch in terms of tonnage, followed by white shrimp, smooth hound, flying squid and sardines. The Sardinian fleet is made up entirely of typically Mediterranean boats and has an exclusively artisanal organization structure.

Catches from the Mediterranean seas are mostly of the so called "Pesce Azzurro" (blue fish) such as sardines, pilchards, anchovies and mackerel. "Pesce Azzurro" account for up to a third of total Italian landings. Mollusks are found in all of the Italian seas, although the catch is steadily declining. Under Italian law, mollusk harvesting is prohibited in polluted areas and only mollusks originating from clean
waters can be marketed fresh.

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DOMESTIC SITUATION

OUTLOOK

Efforts are underway to preserve all fishery resources; i.e. restricting licenses, disallowing incentives for dragnet fishing; lowering allowable catch for select species and providing monetary incentives for fishermen to dry dock their vessels for a certain number of days during the year.

The following measures have been adopted by the GOI:
- within 3 miles of the coastline or at depth less than 50 meters trawl fishing is not allowed;
- minimum mesh size of nets;
- maximum allowable catch of some species of mollusks;
- fishing activity for a period of 45 days running in one year is not allowed with the aim of preserving resources and avoiding    overexploitation;
- an additional suspension period of 2 days per week is also enforced.

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DOMESTIC SITUATION

DOMESTIC HARVEST - AQUACULTURE

Though Italian aquaculture practice is still considered a recent development, it has enjoyed a significant boom during the early 1990s. This increase in production has been great enough to create the first problem of surpluses on an EU scale. Fish farming in Italy failed to match consumer demand until very recently.

Technological developments during recent years have supported this growth trend. The type of investments made by the industry were (49 percent) to increase production capacity, (38 percent) to improve technology and (9 percent) to build fry breeding plant. The sources of finance were as follows: (45 percent) self financing, (23 percent) public funds, (20 percent) medium-long term borrowing and (12 percent) short term borrowing.

Production costs of the Italian fish farming are high compared to other European countries such as Greece where farmers are advantaged since they do not use electricity, do not pay the water they use and labor costs are by far lower.

Presently, there are about 1,046 intensive farms that are members of API (Italian Fish Breeding Association) which are located 75 percent in the north of Italy. Most farms are highly developed and utilize advanced technology. Total output of API's intensive farms in 1994 was estimated at 54,000 MT, valued at more than 440 billion lire (+47 percent compared to 1990). About 15,000 people are employed in fish farming (up 11.2 percent from 1990). Output of the Italian fish farming industry is distributed as follows: 52 percent to the national market; 27 percent to the local market and the balance in exports.

Rainbow trout and eel species are considered the most important farmed products from an economics point of view but other species such as catfish, sturgeon, seabass, seabream etc. are also important from the stand point of future market development.

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DOMESTIC SITUATION

Farm trout production in 1994 reached a record of 50,000 MT. Italian trout farmers have installed liquid oxygen systems and are using higher quality feeds giving better feed conversion ratios and thus faster growth and greater size. Most of the trout production is sold into the domestic market with a relatively small part being exported. Marketing has become the most pressing problem for the trout farming industry.

Eel farmers have developed intensive farming techniques and created a solid production infrastructure. Eel farming appears to be highly profitable and production is limited by the availability of seed stock. Eels only reproduce naturally in the ocean and eel farmers have to depend on wild stock captured along the Atlantic coast and sold to eel farmers. Eel farming production reached 3,000 MT in 1994.

Sea-bream and sea bass farming has not yet reached its potential. This sector is going through a phase of growth but it is hurt by heavy competition from low cost producing countries such as Greece. Thus, import prices are highly competitive. Eighty percent of the production is sold directly to wholesalers while the rest goes to restaurants.

Italian fish farmers grow two main types of catfish: the European variety which is sold at weight of 250 -450 grams and the American channel catfish sold at a larger size. Catfish production is rather small, but becoming important in both volume and value. Catfish is grown and consumed mainly in northern Italy. It is especially common in fish markets in Mantua and Bologna. Catfish is hardly known in the south of the country. Italian fish farmers produced about 1,800 tons of catfish in 1994. About 60 percent of the growers are members of API.

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DOMESTIC SITUATION

Some 600 tons of carp, tench etc. were also produced in Italy in 1994. The main market for carp is Germany. About 90 percent of the farmers growing these species are members of API. Sturgeon is produced mainly in Lombardy. It is produced mainly by eel farmer  and is a fast growing market with good prices at the wholesale level. The sturgeon market is still small, but has good potential, production in 1994 was estimated at 500 MT.

OTHER FARMED PRODUCTION:

Mollusk production in 1994 was estimated at 29,000 MT of vongole veraci (tapes decussatus) and 95,000 MT of mussels. Mussel farming in Italy. is organized as cooperatives. Mussel production is almost entirely destined for the domestic fresh fish market with onl  a small percentage going to the processing industry.

AQUACULTURE - PRODUCTION OUTLOOK

Future aquaculture production depends on current marketing conditions and potential consumer demand for aquacultural products. More effort must be placed in boosting quality, reducing production costs and improving water effluent control.

PRODUCTION QUALITY

In January 1993, Italy began implementing EC Directives No. 91/493/CEE dated July 22, 1991 for the production and marketing of fish. The Italian Veterinary Service (USL) is in charge of the inspection of fish at the production and marketing levels. Periodic controls are performed on board fishing vessels; at the ports of landing; at the processing plants; at the wholesale market and at distribution points.

Reportedly inspection and EU standards are applied more strictly to fish products entering Italy from non-EU countries. For example, mercury requirements are not evenly applied to the local catch and to the imported catch. Some sources indicate that Italian traders prefer to import through EU countries such as The Netherlands/Rotterdam, France or Germany/Hamburg where health controls are not as strict as at the Italian border.

There are a number of initiatives to promote Italian catch. Federcopesca (Italian Fishing Cooperative Federation) has recently launched the new marketing program to personalize and to certify the origin of Italian fish. The product will be recognized by a logo placed right on the fish or on the crate containing the fish or on the label of the bag containing mussels. The Italian Agricultural Ministry had already presented another trademark to enhance the quality of Italian catch and local cooperatives are also presenting various logos to enhance their own catch/products.

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DOMESTIC SITUATION

PROCESSING INDUSTRY

According to the Italian Association of Canned Seafood Products the crisis in the canned fish sector which hit the Mediterranean countries during the 1992/1994 period was particularly hard on the Italian industries. They had already reduced the production and consequently the profit margins are presently very thin. The major reasons include a drop in domestic demand and increased competition from countries which can produce their products at lower prices than Italian firms.

The Italian tuna processing industry is the third in the world after the U.S. and Thailand. In 1994 total Italian tuna production reached 86,000 MT (-4 percent compared to the previous year). About 123,000 MT of tuna is needed for the production cycle; of this about 75,000 MT is imported. In 1994 the U.S. was the second largest supplier of frozen tuna to Italy after Spain and supplied 11,110 MT or 28 billion lire in value.

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DOMESTIC SITUATION

As in the past, the tuna industry is facing problems of unsteady supply and keeping production costs low in order to meet the increasing competitiveness of foreign product favored by lower labor  costs. Canned tuna originating from Far Eastern countries have taken up market share in many North European countries and are becoming more and more successful in Italy. Italian canned tuna demand in 1994 dropped 5 percent compared to last year, while both imports and exports decreased by 19 and 24 percent respectively. The Italian tuna industry is not price competitive but tends to provide a high quality product suited to local taste.

The canned sardines in oil processing industry is slowly drifting toward a complete paralysis. Reasons for this crisis include the decreased per capita consumption which is estimated at 60 grams and the heavy competition from Morocco, which has been granted exemption from many import duties by the European Union. The difficult health situation of Adriatic resources has downsized the clam industry and low availability of the domestic catch forced many canning firms to import shelled clams from China and Vietnam in order to continue their limited production during 1994. The canned anchovy industry has drastically increased production in order to meet domestic demand. As a consequence of the decreased anchovy catch in Italian waters, processors have had to import salted anchovies from Greece, Spain, Turkey and Argentina.

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CONSUMPTION, GENERAL

Among the various food items in the Italian diet, fish represents one of the products for which consumption has been increasing during recent years in spite of the economic recession and the cholera scare which hit the market last October. For more information on the cholera situation see IT 4714. The highest fresh seafood consumption occurs in Southern Italy where most of the landing ports are located, allowing for easier access to the fish and at a better price. There is a tendency towards consumption of common and relatively lower-priced products in the South while more expensive (often imported) products are marketed in the North. Consumption of frozen seafood is higher in the north and in-land cities, in general.

A recent survey conducted by Istituto Sintetica, Rome provided the following table indicating consumers most frequently purchased species (in order of importance): 1) Cod; 2) Sole; 3) Octopus, calamari, and cuttlefish; 4) Anchovy; 5) Trout 6) Sea Bream; 7) Bivalves; 8) Striped Mullet; 9) Sword Fish; 10) Bass.

For a large majority of Italians, seafood remains a food eaten during seaside vacations, while on travel or during special events. Although seafood is much more commonly consumed today, fish continues to represent a luxury food. Therefore its consumption increases greatly during Christmas time. Friday has traditionally been the day reserved for fish consumption and many restaurants and households have maintained this tradition. There are no updated official sources regarding the Italian consumption of fish and seafood products. A recent survey shows the substantial difference that exists between the various Italian regions:

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CONSUMPTION, GENERAL

SHELLFISH CONSUMPTION

Demand is concentrated in the main cities and in the major coastal resort areas and is generally greater during the summer vacation period when normal domestic demand is increased by strong foreign tourist demand. While there is a considerable market for household sales, the major users are restaurants, hotels, caterers (institutional food services companies), etc. which have a strong preference for fresh products.

The Italian consumer is quite demanding as far as product quality is concerned and is usually willing to pay higher prices. In general supplier offers are rejected less on price considerations than on quality.

Per capita consumption is expected to grow in future years based on the growing public opinion that fish and seafood are light, healthy and rich in protein. Frozen fish and prepared fish are becoming more widely accepted due to a positive consumer perception; these products are less expensive, available all year round and already cleaned. With more working women and people spending less time preparing meals frozen fish consumption should continue to rise.

UTILIZATION PATTERNS

Most seafood is consumed fresh as fish is traditionally prepared whole on a daily basis, but preparation varies from region to region. A recent survey determined that there are differences in consumer preferences depending if they live in a coastal city or an in-land city. Generally speaking, coastal preparations are grilled while a larger percent of consumers from in-land areas prefer fried or boiled preparations.

Trout or farm raised rainbow trout (salmon trout) has the highest consumption level among fresh products. Cod, fried mixed-fish dishes and anchovies are the favorite saltwater products. Mussels and clams are often used in spaghetti and rice dishes.

According to the Istituto Italiano Surgelati, over 69,000 MT of frozen fish products were consumed in 1994, up 5 percent from 1993 and still growing. Not included in the above total are 880 MT of fish-based prepared/frozen products such as fish soups, fish risotto (risotto alla marinara), etc.. Frozen shellfish consumption is encountering a success above average with Italian consumer who is beginning to appreciate the quality, the numerous varieties available and the versatile use of these products. The most popular frozen fish items are sole, hake, octopus and squid.

The frozen fish production and retail sector remains in the hands of three major groups: Sagit, Italgel, Argel. The top 5 processors control about 70 percent of the total frozen seafood volume.

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CONSUMPTION, GENERAL

Frozen products are marketed and distributed as follows:

38 percent - catering industry
62 percent - home consumption

The frozen products reaches families as follows:

12 percent thru home deliveries
88 percent thru food distribution channels

One of the major players in the frozen fish market is the Bo-frost group which holds an 80 percent share of the door to door sales or home delivery. Bo-frost has recently introduced new specialties such as vacuum packed frozen cooked lobsters and prepared salmon trout fillets. Most of the other companies are trading companies and/or produce for the major groups. In the frozen fish sector modern distribution systems are playing an increasing role . The major large distribution groups are also introducing private labels in the fish
sector.

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CONSUMPTION, GENERAL

Italian consumers of frozen products are more and more oriented toward home products that are simple, genuine but at the same time safe and with good nutritional value. Products must also be easy to prepare. The increase in frozen fish at home consumption is significant because growth is taking place in hard discount stores, a market with tough pricing strategies. Supermarkets offer cleaned frozen fish which requires a minimum of preparation by the buyer. Demand for whole fish of medium size that require elaborate cooking and especially a lot of home preparation is steadily declining. Brand recognition appears to be a primary factor in selecting a processed fish product. This tendency is supported by heavy brand promotions of about 50 billion Lire annually on the part of the major retail names .

Advertising campaigns to increase domestic fish consumption were conducted in the past by the Marine Mercantile Ministry and will now be conducted periodically by the Agricultural Ministry to promote consumption of domestic seafood.

MARKETING DISTRIBUTION

Italy has a very extensive network of seafood distribution from landing sites to final consumers. The market is distinctly divided into three areas of north, central and south Italy. The more populated, industrialized north has the highest level of industry concentration with most of the major processing facilities and higher income levels.

It is commonly accepted that half of the local catch is sold by fishermen directly to restaurants, wholesalers and fish mongers. The remaining 40-50 percent is sold through traditional fish markets. There are eight major fish markets -- publically owned -- which also act as dispatching agents. The importance of these markets are based on local consumption. The most important markets in terms of turnover value and tonnage are: Milan, Turin and Rome, Mazara del Vallo, Palermo, Chioggia-Venezia and Genoa. Burocratic and administrative delays are slowing down the process to improve the Milano market --currently the largest in Italy-- and provide more advanced technological facilities.

There are over 1000 companies registered as fish wholesalers. Of these, 100 can be considered importers and about 20 are shareholders in vessels operating in major fishing countries. The companies are of various sizes from the small to the largest Panapesca, which owns fishing fleets in other countries. There are about 150 freezer centers located in Italy which have helped in increasing the availability of frozen fish on the markets. Of these 120 are owned by Panapesca.

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MARKETING

Most "blue fish" do not go through fish markets. Wholesalers take possession of fish at landing and transport it directly to consumers or the canning industry or sell it to another wholesaler. This catch is then resold fresh/chilled or frozen and prepacked if it is to be exported. Imported live/fresh fish (like U.S. live lobsters) is brought in principally by air using the Milan and Rome airports, but
fish landed in Sicilian ports can reach the Milan market the following morning by truck.

Traders avoid fish markets and ports registration authorities in order to evade required administrative and phytosanitary formalities. In addition, wholesale markets are often located far from the landing ports and are inconvenient to use. Traders fear that going through the markets (i.e. official distribution channels) could mean a delay in delivery and subsequently an increase in cost.

Private networks of importers and wholesalers distribute more than 95 percent of all frozen fish products. Retail distribution takes place through the following channels: retail outlets, street markets and increasingly via super/hypermarkets and discount food centers.

Large distribution chains usually receive frozen fish in consumer ready packages from importers and wholesalers. Supermarkets normally offer a wide variety of frozen seafood including value-added products. Frozen shellfish reaches the final consumer primarily through supermarkets and small retail outlets which sell exclusively frozen foods. The frozen product is retailed in consumer-ready packages from importers or wholesalers.

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MARKETING

Imported seafood enters the market through agents whose clients include other importers, wholesalers and industrial users (processors). The typical importer supplies wholesalers and fishmongers, but sometimes delivers to larger restaurants and industrial users. Processing companies are also large direct importers.

The tourist industry plays an important role in the seafood demand. Meals eaten in restaurants totaled over 5 billion in 1994 and growth is forecast in the near future. Institutional cafeterias and restaurants are becoming more open and interested in seafood products. Fresh fish is the preferred form in the best restaurants and is often prepared whole and grilled. Problems with supplying fish to the institutional sector include cost (generally too high) and the need for convenience packaging.

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TRADE

TRADE TRENDS

Italy is a major producer and trader of seafood products. However, it is a net importer of these products. During 1994 the gap between seafood imports and exports was still quite significant. In 1994, Italy imported 582,000 MT (slightly over the previous year) and exported 98,000 MT (+ 12 percent over 1993) of fish and fishery products. It is expected that Italian seafood imports are likely to grow by about 7 percent in 1995 and that they will be helped by the continued growth of the Italian economy. In particular, increased imports by Italy are expected for crustraceans and fish fillets.

European Union countries are still the favored trading partners due to the exemption of tariffs when trading within the EU, and also because of the preference for the traditional species offered by other member countries. In total all EU countries - with the exception of Portugal (-1%) and France (-28%)-- registered an increased in exports to Italy during 1994. Total EU exports to Italy took up 56 percent of the total Italian import volume. In 1994 Spain was the number one supplier of seafood to Italy, thus consolidating its position reached during 1993. The market share for Spanish exports was 17 percent followed by Netherlands with 11 percent and France with 7 percent.

Italy registered a significant increase in imports from the U.S., with growth from 8,800 MT in 1993 to 23,300 MT in 1994. Thus the U.S. become the 9 largest supplier of seafood/fish products to Italy in terms of volume. Italian imports from the U.S. for the first five month in 1995 show an increase of 42 percent in both volume and value compared to the previous year.

Potential growth for U.S. products

Salmon

Italian imports of U.S. salmon increased significantly in 1994 and trade statistics for the first 5 months of 1995 show trade almost doubling. Traders reports that short Canadian supply and high U.S. quality is underwriting this trend.

In general, salmon is becoming more and more popular in the catering sector although it is still predominantly consumed on special occasions. fresh and frozen salmon steaks are mainly served grilled in restaurants. The preferred retail pack for smoked salmon is in whole sides and also in pre-sliced portions which are imported in vacuum packs; 500 grams portions of salmon bits are popular among caterers for preparation of seafood cocktails, spaghetti dishes, risotto and pizzas.

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TRADE

Italian imports of salmon from the Atlantic are consumed fresh and smoked, while Pacific salmons are used mainly for smoking. Italian smokers have a preference for Pacific salmon. Its red color and strong taste is preferred over the softer, paler product from the Atlantic.

Imports of chilled product from Norway continue to increase and remain the number one supplier. Canada remains the top supplier of frozen salmon. Smoked products are heavily supplied by Denmark and France. High quality smoked salmon in Italy is generally well appreciated. The quality of the local production of smoked salmon is considered to be quite high.

Chum is well received both for the price and quality while summer chum is used in smoking. Traders have recently reported that there is an increasing interest in Alaska salmon and import figures show that during the first five months of 1995, exports of all types of salmon from the U.S. have already doubled over trade during the same period in 1994.

The Italian market should not be underestimated and European import figures do not reflect the real situation. Italy is the second most significant consumer in Europe of smoked salmon. This is confirmed by interviews released by European smokers which showed that given an import figure of 100 between 40 and 80 percent is being smoked and re-exported to Italy alone. The canned salmon market has fluctuated significantly over the past few years. Canada and France are the predominant exporters to Italy.

Surimi

Consumption of surimi based products in Italy has grown significantly since 1990. Surimi is heavily used in the catering industry and in delicatessen chains where preparation of take out (seafood salads, etc.) is very common. Growth in surimi consumption has doubled and U.S. exports to Italy reached 866 MT or 2 million USD in 1994. This demand for surimi will most likely continue as long as quality can be maintained according to Italian standards.

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TRADE

COMPETITION

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TRADE

Italian fish import statistics do not give a full picture of the imported trade. Due to strict health inspections at the border many Italian traders import fish from non-EU countries through neighboring countries (i.e. France and Germany). This is done to avoid strict control at the border, mainly for mercury content.

Italian exports are mainly value-added products such as mollusk products (striped venus dried, salted, in brine). Other major products exported are tuna, pilchard, anchovies (fresh/chilled and preserved) and eels.

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TRADE

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TRADE
FACTORS AFFECTING U.S. TRADE

The major factor affecting U.S. trade during 1994 was again the strong U.S. dollar against the lira as many traders confirmed. Of less importance, but still pending, are problems with haphazard application of phytosanitary laws to U.S. products entering Italy (see below Market Access for more information).

Traders note a continued lack of knowledge of the products available in the U.S. and a need for more consumer-level promotions as many consumers are not familiar with U.S. products or with their usage. Traders and retailers report that they have a good, but vague impression of U.S. origin product except for live lobster. Frozen squid rings from the U.S. have a good price-quality ratio according to traders, but are not "labeled" for consumer consumption or knowledge. Wild salmon from the U.S. is often confused with Canadian product.

In general, knowledge of U.S. origin product is lacking at the consumer level, despite retailer claims of keeping product identity in front of clients. The French --while not direct competitors to U.S. species in Italy-- have undertaken a widespread and expensive campaign to strengthen consumer knowledge of French origin seafood. Their efforts start with the wholesale networks and extend to retail chains with a large budget for hotel/restaurant promotions. In addition, the Canadian and Norwegian exporters are active with similar promotion efforts targeted at restaurants.

IMPORT, MARKET ACCESS

Both Italy and the EU have a substantial number of laws and regulations regarding imported seafood. Given the complexity of regulations in this particular sector, it is recommended that prior to initiating exports to Italy, U.S. traders should contact experienced agents and wholesales/importers. These groups often have up-to-date knowledge of the structure of the market as well as laws pertaining to imported fishery products.

The Italian phytosanitary control system regarding imported fish from non EU countries is not always applied to the local catch. Based on Italian regulations, a phytosanitary and origin/identification certificate must accompany each shipment. Physical inspection includes organoleptic analysis and chemical and microbiological tests for all seafood entering the country. For example, mercury requirements are not evenly applied to the local catch and to the imported catch.

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Seafood

Total Edible Fishery Prods.

IMPORT, MARKET ACCESS
COMMODITY OUTLOOK, PRICES, TOTAL EDIBLE FISHERY PRODUCTS
PRICES
Average price table has been submitted with a separate report.
POLICY
As a member of the EU, Italy applies Common External Tariffs and Quotas, the Generalized System of Preference and the Reference Price System. Since January 1993, national frontiers have been abolished. However, arrangements for the complete harmonization of imported fish regulations are not yet finalized. It is assumed that a complete harmonized system for third country fish products entering the EU be effective in 1995. Thus, Italy still has in place many national policies that are not in conformity with EU regulations. This situation is changing and eventually, Italy will conform to EU law.

Classifying fish as food, the main EU Directives relating to the establishment of the Single Market are the Council Directives which establish the health conditions for the production and marketing of fishery products and live bivalves. The main objective of EU harmonization is a common import system applied by all member Sates. A centralized "competent authority" of the Member States will carry out veterinary checks and apply food laws to fishery products. Competent authorities must also be established in third-countries wishing to export to the European Union. The legislation, organization and functioning of the competent authorities in third countries must be approved by the EU Commission. Only products from approved premises can be marketed within the European Union.

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Seafood

Total Edible Fishery Prods.

POLICY
SUBSECT+NON TARIFF BARRIERS

For third country seafood processing plants to qualify for export to the Common Market they must be EU approved. All fish and seafood products fall within the Veterinary Directives 91/493, 91/492 which govern border checks to be carried out by customs officials. Ports of entry must be approved to handle fish and fish products.

All imports of fish and fish products are subject to licensing. Italian regulations distinguish between "frozen" (congelato) and quick frozen (surgelato) products. Surgelato refers to products frozen to minus 18 degrees centigrade in a maximum time lapse of 4 hours. All other products are referred to as simply frozen. This distinction is important to exporters for packaging and labeling requirements. Exporters of quick frozen fish and fishery products must be registered with the Italian Ministry of Health.

Imports are either inspected at the ports of entry or may be subject to certificate control only. Italian health authorities are concerned with parasites, and mercury and formaldehyde levels. A suspect product is inspected and held in a separate warehouse by sanitary inspectors until analysis results are received.

All fish and fishery products must have a certificate of mercury content certifying that the mercury content is less than 0.7 parts per million (ppm). Most species including shellfish, squid, shrimp, lobsters and crawfish are classified as low mercury content. For these species, the Ministry will generally accept a statement by the authorities of the exporting country that the "Shipment of seafood does not have a mercury content higher than 0.7 ppm."

There is a maximum acceptable cadmium content of 2 ppm for certain shellfish imports. For fish that naturally contain formaldehyde such  as cod, pollock, etc. the residue may not exceed 60 milligram(mg) per kilogram. For all other fish the maximum formaldehyde residue is 10 mg

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Seafood

Lobster

PRODUCTION

The domestic catch of lobster (Palinurus) is reported to be in steady decline. Official statistics show a sharp drop in catch over the last three years. In 1994 lobster production was reported at 205 metric tons. One third of total local lobsters is caught in Sardinian and Sicilian waters. The quality of the local catch is excellent but the price, due to its shortage, is extremely high.

CONSUMPTION

There is a small but potentially good market in Italy for live lobsters (known as "astice" in Italian). Most lobster imported from the U.S. is live.  Up to now there has been relatively little interest in frozen lobsters or lobster meat, but with the steadily growing demand for the live product, consumers could eventually be willing to consider the frozen product as an alternative, particularly if preparation and cooking convenience can be improved and packaging made more attractive.

Nearly all fresh/live lobsters and crawfish available is consumed in restaurants. Products are often served split in two and displayed
in-shell. Imported live lobsters are well accepted by restaurants due to their reasonable price. Some large supermarket chains and "frozen food supermarkets" display frozen whole and half lobsters in clear vacuum sealed packages. A small percentage of all lobsters sold is cooked, stuffed and packed frozen.

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Seafood

Lobster

TRADE
GENERAL

Italy is a net importer of live, fresh and frozen lobsters and will continue to be so considering the modest production and the growing consumer demand. The U.S. is by far the most important supplier of live lobsters to the Italian market. Total Italian imports of lobster (Astice: Homarus or Maine Lobster and Aragosta: Spiny Lobster or Rock Lobster) for 1994 are reported at 2,569 MT for a total of 49.9 billion Lire, which is down 6 percent in quantity and at about the same level in value compared to 1993. The dominant import item is the live lobster (Homarus) with the main suppliers being the U.S. and Canada. Frozen Rock lobster is the second most important imported item.

A breakdown of suppliers follows:

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Seafood

Lobster

TRADE

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Seafood

Lobster

TRADE
Non Tariff Barriers

U.S. seafood products, including lobsters, must be accompanied by an official health certificate (See non-tariff barriers section). Customs duties for Italy are 8 percent ad valorem for fresh/frozen whole lobster. Spiny lobsters' custom duties amount to 25 percent while fresh fish, mollusk and shellfish customs duties amount to 15 percent.

At the beginning of 1995 the trade of flow of lobsters from the U.S./ Canada to Italy encountered some disruption due to the Italian Ministry of Health (MOH) request for a double certification for live products and specifically for live lobsters arriving at Italian airports (Milan and Rome). The MOH considered live lobsters to be an aquaculture product. This was prompted by an Italian Decree 531 which implemented the EEC Directive 91/493 already in force and an Italian Decree 555 implementing Directive 91/67 EEC.

The disruption did not last long. Italian officials announced a delay in the enforcement of the two certificates requirement. As an interim solution a statement had to be added to the health certificate which certified that the products (live fish and crustaceans) are wild caught and the shipment is destined for human consumption. The short disruption caused panic among U.S. exporters as product backed up at ports and caused a variety of expenditures including excess holding and shipping expenditures. Reportedly, at the moment there are no problems with exporting live lobsters to Italy.

PRICES

Lobsters prices have been steady or in some cases declining during the past years, due to imports of inexpensive live lobsters from North America and trade of frozen crayfish from Cuba and Spain. Average 1994 prices were stable or in some cases were even lower than the previous year.

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Seafood

Lobster

PRICES

Prices Table
Seafood (54002) for ITALY 1995
Lobster
Average Monthly Price for an Indicative Market
Prices in Italian Lire (currency) Per Kilograms (unit of measure)

Source & Contract Terms: Milan Fish Market Official Bulletin. Retail price for imported live lobster at the Milan Wholesale Market. Actual wholesale price are roughly 15 percent lower than what indicated. Exchange Rate (Local Currency/US $): 1,612 Date of Quote: 09/14/95 MM/DD/YY

Average retail prices quoted at the Milan Fish Market during 1994 are as follows:

COMMODITY OUTLOOK, MARKETING
MARKET DEVELOPMENT OPPORTUNITIES

U.S. live lobsters are well known and appreciated by Italian traders. However, consumers are less aware of the origin of the product.
Canada is very active in the Italian lobster market with promotional campaigns and informational efforts and may present a threat to U.S. exporters in that the growing consumer knowledge of origin is allowing Canada to take credit for all live imported lobster found in Italy. Traders believe that the best promotional tool at the importer's level is the steady quality and availability of the product all year round.

U.S. lobsters could benefit from promotional events in cooperation with major Italian importers which highlight better identification of U.S.

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Seafood

Lobster

COMMODITY OUTLOOK, MARKETING
origin among restaurants and other retail establishments. The best timing for promotions would be during a U.S. trade team visit or a trade show such as EXPO CT or CIBUS. While traders generally recognize the quality and price advantages of U.S. lobsters, consumers are less educated and could benefit from POS promotions or "advertorials" in major consumer food magazines.

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Seafood

Squid/Cuttlefish

PRODUCTION

Italian production of cephalopods is equally distributed between squid, cuttlefish and octopus. Preliminary figures for 1994 show an increase in total production. However the production of squid/cuttle fish contemplated in this section is slightly declining due to overfishing in recent years. Production in 1994 for the squid/cuttelfish was roughly at 8,000 metric tons for calamari (Loligo) and 15,300 MT for cuttlefish (Sepia Officialis). Therefore, total squid/cuttlefish catch for 1994 is preliminary estimated at 23,300 metric tons.

Italian production of cephalopods depend largely on the fishing operations carried out in the Atlantic. In the Mediterranean in spite of significant catches of cuttlefish (sepia and sepiola), the fishing of other species is only done sporadically.

Three species of Italian squid are commonly fished: the "calamaro" or common squid (Loligo Vulgaris), the "totano" or European flying squid (Todarodes sagittatus) and the "totano volatore" or Mediterranean flying squid (Illex coindetti). Commercially, the latter two are generally lumped together, and the only distinction made is between the calamaro and totano.

Up to 1985 a considerable part of the national production of cephalopods originated from fishing on the American continental shelf (under GIFA agreements). After 1985 following the expulsion of the Italian, etc. ocean-going fleets from U.S. waters, the production of cephalopods has moved to many other areas. The majority of the national production of illex and loligo comes from the waters off Argentina and from the Falkland islands.

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Seafood

Squid/Cuttlefish

PRODUCTION
sepia come from the North-West Coasts of Africa. Small amounts of octopus and squid are recorded as coming from South-West Africa. Considerable quantities of both types of cuttlefish come from fishing operations carried out in the Adriatic sea.
Production Outlook 
Domestic landings are not very important for domestic supply, which more and more has come to depend on imports. This trend is expected to continue.

CONSUMPTION

Squid and cuttlefish have a high level of consumption throughout the country. There is a strong demand for all species in restaurants, above all, demand by food service groups is strong. The catering (food service) industry will continue to look for good quality squid as demand strengthens in the future. Consumption of squid increases during summer months in connection with Italian vacation period and higher increased tourism. The Italian cuisine includes a wide range of uses for cephalopods. Squid are commonly served whole and grilled or cut into rings, battered and deep-fried. Squid are also used in seafood cocktail which is one of the most typical fish dishes served in the catering sector: it consists of pieces of squid, octopus and cuttlefish mixed with clams, mussels and crustaceans. The product is cooked and marinated before serving. The Loligo vulgaris species is the preferred item by the caterers. Illex squid has been accepted slowly due to its tougher texture.

The Italian supply of squids very dependent on imported products. The U.S. is the main supplier of Loligo pealei and supplies over half of all imports to Italy. There is growing demand for the whole, frozen Loligo Vulgaris imported from South Africa, Spain and West Africa. Most of the imported products are preferably frozen on board and supplied in 5 pound blocks. The quality is usually high.

Whole, frozen Loligo vulgaris is also imported from Spain and West Africa, in frozen block (sizes vary from 100 to 150 gr). Loligo pealei imports substitute for Loligo Vulgaris when there is a scarce supply of the later. Quite popular is also the Loligo patagonia usually imported from Poland, Netherlands Spain and Argentina; it is block-frozen on board with sizes between 12 and 15 CM. Frozen, whole cleaned squid (Loligo spp) are very convenient for caterers and Thailand and India are the main suppliers of this product, imported in frozen 5lb blocks. Big sizes/5-10 pieces/Kg, are in high demand while smaller sizes of 10-12 pieces/Kg are less favored by caterers. Overall supply is quite limited. Product quality is generally good but it is not constant.

Squid rings and tubes are widely used. There is a preference for squid rings of Illex imported from Spain, IQF in 1 Kg polythene bags. The quality is good but there have been complaints regarding the glazing content. Mixed squid rings and tentacles are also used by caterers. The rings and tentacles are usually separated in blocks.

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AGR Number: IT5709
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Seafood

Squid/Cuttlefish

CONSUMPTION
Cuttlefish are also popular with the catering sector. The whole uncleaned, frozen Sepia officinalis comes from Morocco and is frozen on board in 15 -20 lb blocks in sizes of 80-200 g/piece. Cleaned cuttlefish are either block-frozen or IQF in 10 Kg blocks. Quality is
generally medium to high. Small sized cuttlefish are often used whole in spaghetti dishes. Common squid has firmer flesh, better ooking characteristics and steady quality, consequently it fetches a significant higher price.

TRADE

GENERAL

In order to expand on the Trade Matrix in the Trade Section, a detailed breakdown of squid imports follows:


Total Quantity Main Suppliers (quantity in metric tons)

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Seafood

Squid/Cuttlefish

TRADE
 

Prices Table

Source & Contract Terms: Milan Fish Market Official Bulletin; Retail price for whole frozen squid traded at the Milan Wholesale market. Actual wholesale prices are roughly 15 percent lower that what indicated.
Exchange Rate (Local Currency/US $): 1,612 Date of Quote: 09/14/95 MM/DD/YY
END OF REPORT