US authors reported that most certified Philippine seafood firms abandoned EU HACCP certification since the promised benefits were not realized. The cartel is right: when you don’t bow to it, its legislation will ensure that you lose business. The authors estimated the loss at $4-6M in this case. Let’s hope the merchants found more open markets soon after.
This paper employs firm level benefit-cost and supply chain analyses to explore the reasons why a majority of Philippine seafood processing firms discontinued EU HACCP between 2004 and 2005. Results indicate that only 38% of firms remained certified, as they gained significantly from retention of EU markets, gained access to US markets, captured new buyers, and reduced product wastage. However, 62% of the initially certified firms abandoned certification, as they did not realize most of the anticipated benefits from certification and continuing certification was not economically viable. Delisting by some processors led to profit losses among their raw fish and input suppliers amounting to $4–6 million per year, representing approximately 6–9% of the value of Philippine seafood exports to the EU and mainly affecting small aquaculture fish suppliers.
► Thirty-eight percent of surveyed Philippine seafood firms continued EU HACCP as markets were retained and expanded. ► EU HACCP compliance cost was <1-3% percent of output value and accrued solely to processing firms. ► Sixty-two percent of certified firms abandoned EU HACCP since anticipated benefits were not realized. ► Losses from delisting were $ 4–6 million or 6-9% of seafood exports to the EU. ► Small farmed seafood suppliers were the ones with largest profit loss due to loss of EU market.