Canadian conglomerate Premium Brands, parent of Clearwater Seafoods, wants to steer clear of any potential impact to its lobster sales resulting from increasing trade tension between China and Canada.
Canada's lobster suppliers are looking on nervously as the country's relationship with China sours, fearing the industry could be a target should tensions spill over into trade between the countries.
Lobster producers and suppliers are looking to other markets in Asia, including Thailand, Vietnam and other countries, which if successful could help cushion the blow of lost Chinese business.
Canada ships large quantities of live lobster, a highly sought after commodity, to China and other markets around the world. It is an important area for Premium Brands in its self-declared mission to "democratize lobster."
"We have created new customers in cruise lines and foodservice and that's our major focus," Premium Brands President and CEO George Paleologou told analysts during his company's first quarter earnings call.
"With regards to trade disputes, we can't impact those but, again, our focus really is to continue to move the business towards more value-added and branded, and we have had a lot of success doing that."
Even if there is an impact from lost Chinese business, Premium Brands CFO Will Kalutycz appears confident of finding a way around this.
"The big driver of our lobster is Ready Seafoods, which is a US company. So to the extent there is a dispute in Canada, Clearwater will probably benefit from that at Ready (Seafoods) from our US business," he said.
In what is considered to be the "softest" financial quarter of the year for its seafood business, Clearwater widened first quarter net losses to CAD24.1 million (€16.4 million/$17.9 million) from CAD8.6 million (€5.9 million/$6.4 million) a year earlier.
First quarter revenue came in at CAD124.5 million (€84.9 million/$92.4 million), up from CAD121 million (€82.6 million/$89.8 million) in the comparable period of 2022,
This was helped by favorable pricing, the sale of excess snow crab inventory carried over from 2022 and increased exports of lobster and brown crab to China after a loosening of pandemic related restrictions in the Asian powerhouse nation.
This was offset by a lower supply of Canadian sea scallops and Arctic surf clams, and the delayed delivery of a replacement Canadian shrimp/turbot harvesting vessel to the second quarter of 2023.
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