Chinese Lobster Companies in
Nova Scotia

by Sandra Dinsmore

Loading a plane with lobster in Halifax, Nova Scotia. For the first time ever the Chinese chartered entire freight planes for this year’s NewYear holiday. By chartering a plane, the air freight rate was lower, they weren’t trucking the product from Nova Scotia to Toronto or Montreal, so travel time was less for the lobster and they got a better result. Richard Stern photo

In the last seven years Mainland China has joined long-time live lobster buyers from Japan, Hong Kong, and South Korea in Canada. In fact, because of China’s increasing population and economy, China is now buying more live Canadian lobster than other Asian nations.

China’s biggest holiday is Chinese New Year, or what the Chinese call the Spring Festival, which this year fell on January 28.

By late January the Maine lobster business is pretty minimal; but unlike Maine, Canada doesn’t fish shedders. The fishing season of its largest lobstering area, southwest Nova Scotia, runs from the last Monday in November to May 31. By late November, as Nova Scotia live lobster dealer Paul Hatfield reported, “They have hardened back up, and a high percentage of them are good for traveling in a box around the world.”

Consequently, Nova Scotia’s prime lobster season is beautifully set up for selling lobster to the Chinese for their New Year holiday. A number of American lobster companies have also had facilities in Atlantic Canada to take advantage of these potential sales.

But six or seven years ago a Chinese company bought the generations-old G. M. Newell Fisheries company, in Clark’s Harbour, Nova Scotia and renamed it Atlantic Chi Can. Then in the last five years, according to a number of sources, five or six other Chinese companies also opened lobster buying, shipping, and in some cases, processing facilities in Nova Scotia.

Not all have been successful. As a Canadian lobster exporter explained, “Handling and storing and grading lobster has not come easily to them.” Hatfield agreed, saying the Chinese have to buy indirectly because the Nova Scotia boats would rather sell directly to him. “They know me,” he said. “They don’t know the Chinese. So the Chinese have to pay more than the going shore price.” (Hatfield said dealers buy at the shore price and charge buyers another 85 cents a lb. for a crate run.)

Because workers in China earn only $1/day, Hatfield thinks the Chinese can blanch, flash-freeze and glaze a whole lobster, package it, and put it on a container ship to China where workers there can defrost it and pick out the meat far more inexpensively than Canadian workers can. The Canadian said, “The Chinese then sell that finished, picked out meat and tail to the cruise ships and back to the people to whom our processors in Maine and Nova Scotia are currently selling.” He fears that in time this may eliminate Canadian processors.

A new Chinese group, called First Catch and also called Dalian Fishing Forever, has office space at the Halifax airport and had a booth at the recent Boston Seafood show. It also has its own chartered 747 that can hold 220,000 lbs. of live lobster. Hatfield reported that the Fishing Forever group with the chartered plane started shipping to China before Christmas and although it was not hurting the Canadians from whom it was buying, it was undercutting other companies in China by $1 to $1.50/lb.

According to an industry source, the Chinese companies that chartered the 747 freight planes for the 2017 Chinese New Year market financially hurt the US and Canadian companies that had previously done the marketing and shipping for that holiday.

“Because there’s not much lift to China on commercial flights out of Halifax, said exporter Robert Behrman, of Boston Lobster Company, “normally they would have to put [the lobster] on a truck and truck it to Toronto or Montreal and fly out of there.” He said having to truck the lobster that far that adds days to the shipment. But for the first time ever the Chinese chartered entire freight planes for this year’s New Year holiday. By chartering a plane, Behrman said, they got a much lower freight rate, and because they weren’t trucking the product from Nova Scotia to Toronto or Montreal, the travel time was less for the lobster, so they get a better result. “If they didn’t have enough lobsters to make a flight, they would offer the extra available space to other dealers,” Behrman said. “As a result it kind of put us in a bind. They had a lower freight rate than we did, so they undercut us.

“They had the lower freight rate,” he said, “and they had a lower exchange rate; so it was just more economical for them. We got our butts kicked. They wanted us to sell for—they asked us to drop 75 cents to a dollar per lb. We couldn’t do it because there was no mark-up.

“We probably got 25 percent of what we would normally get [for the holiday business],” Behrman said.. And like other US and Canadian lobster companies who ordinarily do very well in the Chinese New Year market, Behrman’s company couldn’t sell for the price the Chinese asked. “It would have been like selling for a much lower than normal margin, so it wasn’t worth it. You know,” he said, “with 36- to 40-hour flights, a lot of things can go wrong, what with snowstorms and everything else. It wasn’t worth our while to take the risk for 15 or 20 cents. We did not miss this lost business because the US domestic business was strung also.”

“It’s a huge market,” the Boston exporter explained. “During the [New Year] holiday I’m relatively certain that China probably uses more than we think. “He said five 747s flew from Halifax to China over the New Year holiday. Those five alone carried over 1 million lbs. of Canadian lobster. Behrman did not know how many lbs. flew out of Toronto or Montreal.

And like US lobster exporters, a Canadian live lobster exporter reported that Canadian lobster and seafood companies feel very threatened by the Chinese companies that have set up shop in Canada. “The five or six that have been established in Canada were built from the ground up,” he said. “They are engaged in the full range of the lobster business from buying to end user. Two of the six are processors.” That the standard of living in the two countries is so different also gives the Chinese a decided financial advantage.