Now that the 2006 financial year has come to a close, it’s possible to make some first estimations of the current situation within the European market. The World Cup has certainly affected business this last season but cannot be ruled responsible for the general state of the trade.
All over Western Europe, dealers are entering into a state of shock and have great difficulties in planning the new season’s purchases.
Slow sales, mostly due to a lack of purchasing power on the part of the final consumer; reducing numbers of fishermen, negative legislation and fish stocks are all contributing to a sharp reduction in sales. This is being accompanied by a glut in the offer of product originating from China.
As a source for OEM, China is far different from any of the past sources of the Tackle Trade.
Previous sources such as South Korea and Taiwan were pretty static OEM suppliers; the factories waited for the customer’s request for development and then supplied according to the needs of each market.
Chinese manufacturers are much more dynamic in product development and come up with numerous novelties on their own.
This factor is then multiplied by neighboring competing factories copying each other at a rapid rate thus causing a glut in supply.
The market cannot presently absorb the capacity of the Chinese factories which are therefore now establishing new sales channels in order dump their excess production.
A new concept: The “China Shop”, has been developing steadily throughout South America, Africa and Europe.
Hundreds of these shops have been opening in Europe over the last couple of years.
These stores offer everything, from cheap gifts to batteries, clothing, tooling and toys.
They are open all day, seven days a week and aim more at generating cash flow than large margins. They are all owned by Chinese immigrants.
They are especially successful in poorer southern European countries such as Greece, Portugal and Spain where low purchasing power generates a need for cheap product; success is causing them to spread fast throughout the rest of Europe.
Large cash and carry warehouses, also owned by Chinese immigrants import their stock directly from Chinese factories and supply these shops with a large array of products.
Thousands of traditional retail stores are already dramatically affected by this new competition that is causing havoc in the clothing and shoe trade and in other types of household goods.
These stores have now identified Fishing Tackle as a lucrative potential market and many have opened up a section selling cheap rods, reels, hooks, line and terminal tackle at retail prices that are often over 50% cheaper than usual.
These products, that are all situated in the cheap volume area, escape totally the traditional supply channels.
Large Chinese owned cash & carry companies, are negotiating directly with the Chinese factories and importing and supplying these new general stores with low quality product that has been essentially developed for the Chinese domestic market. They have a communication advantage over the European buyers and the markup between factory price and retail price is less than 300% whereas our present channels allow for a markup of 500%.
Fishing Tackle sold in these Chinese retail shops is therefore 40 to 50% cheaper than in a traditional tackle shop.
Who is controlling what is being sold?
The answer is no-one.
If recently, most High street brands have tried to improve their image by imposing better working conditions on their suppliers; a three-year investigation into booming export factories for companies such as Marks & Spencer and Ikea discovered the human cost of China’s “economic miracle”.
It found an army of powerless rural migrants toiling up to 14 hours a day, almost every day. Many were allowed just one day off a month and paid less than €75 a month for shifts that breached Chinese law and International Labour Organisation rules.
Despite evidence of the shocking working conditions, cheap clothes, toys and increasingly electronic goods from the sweatshops are on sale in European shops with household names, including those with ethical buying policies.
If the Chinese factories do not implement work ethics without pressure from their international customers, what sort of ethics are in place in the factories supplying these new China Shops retail outlets?
It this yet another nail in the coffin of the European Fishing Tackle Trade?
Lets have a fresh look at the ever growing list of problems facing the European Tackle Trade at present:
Depletion in the number of regular fishermen
Competition from other sports and pastimes
Lack of positive image of recreational fishing
Near total absence from the televised media
Depleting fish stocks (The world’s fish and seafood populations will collapse by 2048 if current trends in habitat destruction and over-fishing continue. Science Magazine, November 2006.) (The United Nations failed late last November to achieve consensus on a temporary ban on high-seas bottom trawling; a motion backed by Palau, the Federal States of Micronesia, Costa Rica, Brazil, Chile, Nigeria, Tunisia, Uruguay, the USA, Belgium, Sweden, Austria, Holland, Germany, The UK and Denmark, 1472 scientists in 69 countries and 50 NGOs)
Non existing social and economic recognition of recreational fishing at National or EU level
Negative legislation on the increase (as of 1st January 2007, Sea Fishing licenses are compulsory in Portugal, accompanied by a 10Kg bag limit. 50% of the cash generated by the sales of the licenses will go to a new compensation fund for COMMERCIAL FISHERMEN, so will 60% of the fines imposed on defaulting recreational fishermen)
And that is only the list affecting our trade in general. We are also subject to the same general conditions of the European economy, which are far from positive.
Is this all irremediable? I believe not!
Proper representation of the social and economic importance of recreational fishing through lobbying at National and EU level would certainly achieve some results in most points.
However, very little is being done due to total lack of funding.
How deep will the Trade have to fall before it decides to invest into its future and create a strong and well financed Representation Office at EU level?
I believe we are reaching such a time when we should trying to convince ourselves that we should be dedicating a fixed percentage of our turnover to representation and lobbying if our trade is to survive!
Louis Tchertoff 2006-12-11