Cold Gold: The Rise and Fall of the NSW Abalone Industry

At the beginning of the 2000s, NSW abalone quota was among the most valuable fishing rights in the state. Today, shares struggle to find buyers, commercial quota has fallen to historic lows, and legal operators say they are competing against a second commercial industry that government has failed to control.

For a time, blacklip abalone was cold gold.

By the early 2000s, the NSW fishery had been transformed into a tightly controlled quota industry. Every legal kilogram was counted, access was restricted, and the right to harvest abalone had become a valuable tradeable asset.

Average share prices reportedly rose from about $9,400 in 1996 to almost $27,000 by 2002.

These shares were more than fishing permits. They became business assets, retirement plans, loan security and something families believed they could pass to the next generation.

Government created the scarcity, attached a property right to it and encouraged fishers to invest.

For a while, it worked.

Today, much of that value has disappeared.

Consolidation by design

Individual transferable quota systems are sold as a way to make fisheries more efficient.

Quota moves from smaller operators to those with more capital. Businesses consolidate. Fewer people control more of the catch.

Government calls it rationalisation.

Fishing communities call it losing the fleet.

In 2005, the NSW abalone industry had 48 shareholders and 42 endorsed divers. Today, the entire fishery consists of 3,454 shares held by about 41 shareholders, with fewer people holding enough shares to qualify independently for an endorsement.

Legal access to a public resource has been concentrated into a remarkably small group.

That concentration was part of the bargain.

Industry accepted limited entry, quota charges, reporting requirements and heavy compliance costs in exchange for security.

The resource would be protected. Illegal harvesting would be controlled. The quota asset would retain value because government would defend the system around it.

That bargain is breaking down.

From cold gold to stranded paper

For the 2026/27 fishing period, the commercial abalone quota was cut from 88 tonnes to just 52 tonnes.

It is the lowest commercial allocation since individual quota was introduced.

Two management areas are classified as depleted. The other two are classified as depleting.

Even before the latest reduction, commercial fishers were struggling to catch the quota available.

In 2016 and 2017, the industry landed about 99 per cent of its 130-tonne allocation. By 2024/25, it caught only 74 per cent of a reduced 100-tonne quota. By March 2026, landings had reached only about one-third of the 88 tonnes available that season.

The problem is not only the number of abalone on the reef.

The market has also deteriorated.

Beach prices have fallen. Export demand has weakened. Processing facilities have closed. Farmed abalone has increased competition, and illegal product can be sold below the price required by legitimate operators.

Quota values have collapsed with the fishery.

A voluntary share surrender proposal reportedly valued shares at about $4,200 each. In 2018, the Total Allowable Fishing Committee estimated their value at more than $10,000.

That is a fall of around 60 per cent in eight years.

The shares are not technically worthless. They still provide access to legal quota.

But an asset is only worth what someone is willing to pay for it.

When quota keeps falling, catch rates decline, costs rise and illegal seafood undercuts the market, buyers disappear.

Cold gold becomes stranded paper.

The second commercial industry

The legal abalone industry carries enormous costs.

Operators must buy or lease shares, hold endorsements, pay management fees, report every kilogram and comply with strict size, area and quota controls.

Outside that system, another supply chain exists.

It does not buy quota.

It does not carry the same management charges.

It does not report every kilogram.

It can sell abalone below the price of legal product.

The NSW Total Allowable Fishing Committee estimated illegal, unreported and unregulated extraction at between 25 and 35 tonnes a year. It also referred to a “strong and sophisticated” illicit market capable of supplying consumers at prices the licensed industry cannot match.

Compare that estimate with the new commercial quota of 52 tonnes.

Illegal extraction may now equal between 48 and 67 per cent of the entire legal commercial allocation.

That is not a minor compliance problem.

It is a second commercial industry operating beside the regulated one.

Someone is harvesting the abalone.

Someone is moving it.

Someone is buying it.

Someone is selling or serving it.

Yet government continues to respond by cutting the catch of the industry it can most easily control.

The cultural fishing divide

This is where the debate becomes difficult.

Aboriginal people have harvested abalone for thousands of years. Cultural fishing rights are legitimate and should be protected. Native Title rights must also be respected.

But cultural fishing does not create an unrestricted commercial licence.

Senior NSW fisheries officials have told Parliament that recognised Native Title fishing rights relate to personal, domestic and communal purposes of a non-commercial nature.

They do not provide a general right to sell abalone into the wider market.

That distinction is critical.

The issue is not whether Aboriginal people should be able to harvest abalone for cultural purposes.

The issue is whether government has established a clear and enforceable boundary between legitimate cultural harvest and commercial activity conducted under the protection of cultural fishing or Native Title claims.

Commercial representatives say it has not.

Abalone Association president John Smythe told the ABC that the industry supported genuine cultural fishing but believed commercial activity was occurring “under the guise of cultural fishing”.

That claim should not be used to blame Aboriginal communities collectively.

The illegal market may include recreational offenders, organised poachers, dishonest seafood buyers and other participants.

But the subject cannot be ignored simply because it is politically sensitive.

If abalone is removed in commercial quantities and sold for profit, it is commercial fishing, regardless of the label placed on it.

When cultural fishing looks commercial

Commercial fishers have raised concerns about the equipment used in some operations claiming cultural fishing rights.

They point to large trailer boats, high-powered motors, compressors, electronics, vehicles and professional diving equipment.

Industry sources claim some complete boat and diving setups would cost more than $100,000 to replace.

That figure should remain clearly attributed unless it can be supported by photographs, vessel details or independent valuations.

Expensive equipment alone does not prove illegal activity.

A cultural fisher is not required to use an old boat or basic diving gear.

But the scale and capacity of an operation are relevant.

A professionally equipped dive boat can travel further, stay at sea longer and remove far more abalone than someone gathering a small amount for personal, domestic or communal use.

The real questions are simple.

How much was taken?

How often?

Where did it go?

Was it shared within a community, or was it sold?

Government must be able to answer those questions.

At present, it cannot do so with public confidence.

The numbers do not add up

Government estimates Aboriginal cultural catch at less than one tonne a year.

Recreational catch has been estimated at between 1.1 and 3.3 tonnes.

Illegal and unreported extraction is estimated at between 25 and 35 tonnes.

Those figures leave a glaring question.

Where is the illegal abalone coming from?

If cultural catch is genuinely below one tonne, government should explain the basis for that estimate.

If illegal extraction may be as high as 35 tonnes, it should identify the likely regions, methods, supply chains and markets involved.

These figures cannot simply appear in management reports while legal quota is cut and commercial businesses collapse.

Commercial fishers must account for every kilogram.

Government should account for its estimates with the same level of transparency.

The easiest fishers to punish

Commercial operators are the easiest people to regulate.

Their vessels are known.

Their shares are registered.

Their catch is recorded.

Their businesses are visible.

When stock levels decline, government can reduce their quota with the stroke of a pen.

Illegal extraction remains an estimate.

Cultural catch remains poorly quantified.

The destination of illicit seafood remains unclear.

Restaurants and buyers continue to create the financial incentive for illegal harvesting.

Yet the licensed industry receives the cut.

An abalone removed illegally is just as absent from the reef as one taken under quota.

The stock does not care whether it was taken by a licensed diver, a recreational fisher, a cultural fisher or an organised poacher.

Until every major source of extraction is measured and controlled, reducing commercial quota alone will not rebuild the fishery.

It will only destroy the remaining legal industry faster.

Government created the asset

The collapse in share value cannot be dismissed as ordinary business risk.

Government designed the system.

Government limited entry.

Government created the shares.

Government required fishers to buy, lease or hold them.

Government encouraged industry to treat those rights as valuable assets.

Fishers built businesses, borrowed money and planned retirements around that structure.

If government cannot control illegal extraction, stop illicit seafood entering the market or clearly separate cultural harvesting from unauthorised commercial sale, then it has failed to protect the system it created.

Offering shareholders a fraction of their former value does not repair that failure.

It transfers the cost of government inaction onto the people who followed the rules.

What must happen now

The answer is not to attack cultural fishing or deny legitimate Native Title rights.

The answer is to create a framework strong enough to protect genuine cultural harvesting while preventing commercial sale from hiding behind it.

NSW needs clear cultural fishing rules developed with Aboriginal communities.

It needs reporting that distinguishes personal, domestic and communal harvesting from commercial extraction.

It needs stronger enforcement at the buyer, restaurant, processor and transport level.

Any restaurant or seafood trader selling NSW abalone should be required to prove that the product came from an authorised supplier.

Follow the money.

Investigate the buyers.

Disrupt the market that makes illegal harvesting profitable.

Government must also publish a credible breakdown of estimated extraction and explain how its illegal catch figures were calculated.

Finally, if government can no longer protect the quota system it created, affected shareholders deserve a properly funded structural adjustment process based on the value destroyed, not merely the depressed value left after years of failure.

Abalone was once cold gold.

Its shares were valuable because they represented secure access to a valuable and carefully controlled resource.

Today, legal operators are shrinking, illegal supply is undercutting the market and the government-created property right is losing its meaning.

The rise of the NSW abalone industry was built on the promise that controlling access would protect the resource.

Its fall has come from government’s failure to control the access outside the system.