Costco will buy most farmed salmon from Norway, not Chile

Originally published March 27, 2015 at 4:14 pm

Updated March 28, 2015 at 1:57 pm

Costco is switching the bulk of its fresh farmed salmon purchases from Chile to Norway — a move that’s sending tremors through the global fishing industry due to the warehouse club’s gargantuan needs.

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By Ángel González 

Seattle Times business reporter

Costco is switching the bulk of its fresh farmed salmon purchases from Chile to Norway — a move that’s sending tremors through the global fishing industry due to the warehouse club’s gargantuan needs.

The South American country now provides Costco with about 90 percent of its farmed Atlantic salmon, and Norway just 10 percent. But starting in June, Norway will fulfill about 60 percent of Costco’s needs with antibiotic-free salmon, with Chile accounting for the remainder, said Jeff Lyons, the senior Costco executive in charge of fresh foods, in an interview.

Costco purchases some 600,000 pounds of salmon filet per week, according to Lyons. That’s close to 10 percent of all U.S. Atlantic salmon imports from Chile.

The decision, according to Lyons, is the result of an unusual alignment of geopolitical, financial and market trends.

First, in recent months the U.S. dollar has strengthened against the Norwegian krone, which has suffered due to the fall in oil prices; Norway is a big exporter of oil. That makes Norwegian fish cheaper.

Second, Norway’s famously well-meaning foreign policy seems to have wrought havoc with important trade relationships for its fishing industry.

In 2010 the Nobel Peace Prize was awarded by its Norwegian custodians to Chinese dissident Liu Xiaobo, infuriating Beijing. Since then China has imposed various bans on Norwegian salmon.

And last August the Kremlin banned food imports from Norway as retaliation for sanctions imposed by Western powers over Russia’s moves against Ukraine.

Lyons said Costco was able to nudge Norwegian salmon farmers toward offering salmon raised without antibiotics — a product that consumers might welcome.

Ricardo Garcia, CEO of Camanchaca, a Chilean seafood producer, told local trade publication Aqua that Costco’s decision was “very tough for the Chilean industry.

But SalmonChile, a trade association for Chilean salmon producers, downplayed the move’s impact.

SalmonChile President Felipe Manterola said Costco representatives told members the company is not ditching Chilean producers, but testing the market’s appetite for the antibiotic-free product.

Lyons said the company wants to preserve its relationships with “very good vendors” in Chile.

“It’s a lot of tonnage,” he said. “We understand that. That’s why we wouldn’t leave Chile entirely.”