Why Prices Fall for Fishers but Continue to Rise for Consumers

The Department of Primary Industries and Regional Development (DPIRD) has embarked on a policy explicitly designed to enhance the value and viability of commercial fisheries by limiting supply. The logic appears straightforward: fewer fishers result in less supply, driving market prices higher and ostensibly creating more profitable businesses. But this approach raises a critical question—at what broader cost?

Hidden Costs of DPIRD’s Approach

DPIRD's methods—business buyouts, closures, and restrictive licensing—significantly reduce the number of local commercial fishers. While a select few businesses might benefit from consolidation and controlled supply, these isolated gains obscure wider economic and social impacts.

Each commercial fisher forced from the water represents more than just a lost business; it triggers a ripple effect across the entire seafood supply chain. Local seafood shops, reliant on diverse, consistent local catches, are either forced to close or face severe financial struggles. Transport companies specialising in seafood logistics experience sharp drops in volume, jeopardising their operations. Restaurants renowned for fresh, local seafood struggle to secure quality produce, adversely affecting their sustainability.

The Demand Reality DPIRD Overlooks

DPIRD's narrow focus misses a fundamental reality: consumer demand for locally caught seafood remains consistently high. By artificially restricting supply, DPIRD may initially boost prices, but such manipulation risks undermining the market structure itself. With fewer fishers and reduced seafood volumes, seafood retailers find it increasingly difficult to sustain operations. As the number of wholesale buyers diminishes, competition among shops decreases, paradoxically causing prices to drop in the long term.

Moreover, local consumers lose crucial access to fresh, locally caught seafood, a staple they previously enjoyed. Communities endure economic and cultural losses as locally-owned businesses vanish, replaced by fewer centralised operations. DPIRD’s envisioned "growth" thus only enriches a minority, leaving many—including fishers, retailers, transport companies, and ultimately, consumers—worse off.

A Holistic Approach to True Growth

A balanced approach to "growth" must recognise that a healthy fisheries sector thrives on diversity and competition rather than consolidation that erodes community and economic resilience. Without a shift in policy perspective, the true value of Australian seafood—reflected in local employment, community access, and cultural heritage—will continue to decline.

Market Dynamics Clearly Illustrated

Applying clear economic logic reveals essential market dynamics: a larger pool of fishers supplying numerous markets ensures price stability through balanced competition. Conversely, fewer fishers serving the same wholesale markets initially cause price hikes due to scarcity, pricing out shops and restaurants and weakening their purchasing power. As consolidation intensifies, fewer fishers cater to fewer wholesale markets, paradoxically lowering prices due to reduced wholesale demand.

This scenario highlights a crucial distinction: consumer demand for seafood remains strong, but wholesale buyer demand weakens significantly as seafood outlets dwindle. Additionally, the competitive dynamics further disadvantage commercial fishers who must compete intensely to sell their catches, pushing their prices down. Meanwhile, wholesalers, facing minimal or no competition, secure significantly higher profit margins. Consequently, consumer seafood prices continue rising, driven by limited wholesale suppliers facing high consumer demand. Without competition, wholesalers hold the power to dictate prices, inevitably placing substantial financial pressure on everyday consumers.

Ultimately, seafood consumers and commercial fishers bear the brunt of DPIRD’s current policy approach. Such outcomes are neither sustainable nor desirable, underscoring an urgent need to reassess policy priorities to ensure fair outcomes and long-term prosperity for all stakeholders involved.