global war on drugs or tuna

GLOBAL WAR ON DRUGS OR TUNA?

GLOBAL WAR ON DRUGS OR TUNA???

Snapshot

• Difference of opinion between the two competitors.

• Social boycott• Increase in transportation costs led to

reduction in exports• ATP Act angered ASEAN Members

1. Discuss the different environmental factors having an impact on the tuna processing industry.

2. How can international distribution strategy provide a competitive advantage? Which of the three market players has the best distribution strategy?

International Distribution Strategy

3. In what ways are international trade treaties having an impact on the tuna canning industry?

Tuna

• Lowering tariffs on Ecuadorian Tuna as part of an effort to revive ATP Act

• Reductions were intended to coax the Andean Countries out of the drugs business

• Resulted in a worldwide battle for and against tuna tariffs

Tuna Industry & the canning process

• Began in USA in 1903• Has spread to offshore areas due to low wages

and their proximity to fishing areas• Legislative activity by 1980’s to protect friendly

mammals• Increasing low cost imports led to closure• Eastern Pacific Region became a favored source

for tuna production• Shrinkage of the industry in the continental USA

Distribution of exports of canned tuna, January-November 2010. 

Loining Technology

• Located near fishing docks• Subjected to a process of thawing, butchering and

precooking• Cleaning and separating red and white meat• Packed in water or oil, with or without salt• Loins are light, meaty, edible part of the fish• Weighs les than half of a whole fish• Results in reduction of freight costs• Accounts fro 60-80% of the cost of labor• Thus, Canning process gain a significant amount of

savings

MARKET LEADER- STARKIST

Fueling Life’s Everyday Adventures with Exceptional Seafood

Tuna Market Players- StarKist

• A leading producer, distributor and marketer of shelf-stable seafood products in the United States

• The first brand to introduce the StarKist Flavor Fresh Pouch; StarKist Tuna Creations, a line of lightly marinated tuna; and, a dolphin-safe policy

Distribution Strategy

• Locating close to the market • Operations in American Samoa and

Ecuador• Saves the cost of labor• Enjoying lower transportation costs

due to regional proximity to the market

Tuna Market Players- Bumble Bee

• Founded by a handful of dedicated canners back in 1899

• Employs over 1,000 hard working men and women

• Transformed its plants from labor intensive production lines to automated lines

• Assured it means premium quality seafood

Distribution Strategy

• Locating close to the market • Operations in American Samoa and

Ecuador• Saves the cost of labor• Enjoying lower transportation costs due to

regional proximity to the market

Tuna Market Players- Chicken of the sea

• Fishermen referred to the white albacore tuna as “Chicken of the Sea” 

• Synonymous with health, nutrition and convenience

• Ensuring a healthy supply of seafood for future generations

• The protection of dolphin are imperative• Supports high standards of stewardship and

management

44%

23%

17%

16%

Market Share

StarKistBumbleBeeChicken of the seaOthers

ASEAN Members joining the battle

• Members face tariffs as high as 35% on Tuna exports

• Exports to US growing to 600% since lower transportation costs

• Low cost of labor in Ecuadorian Region

Proposal

• Lower Tariff Rate • Low Transportation Costs• Government participation in trade like

administrative guidance• Similar Tariff/ raise the tariff of import

THANK YOU