Canada's live lobster industry faces crisis amid falling demand and price wars

Canada's live lobster industry is grappling with its toughest period in years, facing a "perfect storm" of declining demand, fierce price wars, and geopolitical turmoil. Stewart Lamont, general manager of Tangier Lobster, a prominent supplier with 40 years of experience, described the market situation as "worrying," with many businesses at risk of losses or closure.

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Too many players are chasing limited catches, and some companies are prioritizing market share over profit.

The core issue, Lamont explained, is oversupply and excessive competition. "Too many players are chasing limited catches, and some companies are prioritizing market share over profit," he said. This has led to a race to the bottom on prices, with suppliers selling at rates that barely cover operational costs. Tangier Lobster, for instance, buys lobster at about C$9 per pound and sells it for C$11.25, leaving minimal profit after accounting for transport, storage, and other expenses.

Global economic slowdown has significantly dampened demand, with Lamont estimating a 35-40% decrease in international appetite for live lobster compared to previous years. This downturn affects everyone in the supply chain, from fishermen on Canada's Atlantic coast, who face rising costs for equipment and licenses, to exporters.

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The market situation is worrying, and many companies may face losses or exit the market.

Adding to the pressure, geopolitical tensions have stalled promising markets. Lamont cited the Middle East as an example, where strong demand earlier in the year evaporated following escalating U.S.-Iran conflicts. The company has exported no live lobster to the region in the past two months, losing potential orders.

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International market demand for live lobster has decreased by about 35% to 40% compared to previous years.

Lamont warned that if the industry continues its "lose-lose" price competition, more companies will be forced to shut down or leave. He stressed the need for the industry to stop chasing low prices and focus on sustainable practices to navigate the current crisis.

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Some companies will ultimately have to choose to close down or be forced out of this industry. Unless the industry stops chasing this lose-lose competition, more companies will lose money in the future.