Flying Fish Prices Coming to Canada,
Warns High Liner Foods CEO

Canadians have escaped soaring food prices so far, but now – watch out, warned Henry Demone, chief executive officer of High Liner Foods, as the company released its first quarter figures, which showed sales of $149.2 million.

“Frankly, Canada has been in a bubble from all this stuff,” said Demone. “There’s been very little food inflation and I just think that the magnitude in price increases for any food that you want to look at is so great that it can’t last through 2008,” he said.

The Lunenburg, Nova Scotia-headquartered company recently raised the price of many of its value-added seafood products in Canada by three per cent. In the United States, where High Liner has become one of the largest suppliers of processed fish and seafood to the foodservice market, the problems are even greater.

“The serious economic issues there affect the money people spend on food and where they spend it,” Demone commented. “They tend to eat out less or eat at less expensive venues.”

With a few exceptions, notably Alaska pollock and Asian tilapia, Demone said the price of the seafood the company brings in from 30 different countries for processing has remained fairly stable. It’s other spiking commodities that are generating concern.

“Wheat, soy, corn, cooking oils. These agricultural commodities tend to be the base ingredients to a lot of our value-added products,” commented the chief executive officer. “Although appearing to reach their peaks for now, we expect these prices to remain high throughout 2008 and negatively affect margins until price increases can be passed on later this year.”

Demone said a stronger Canadian dollar has helped mitigate some of the company’s offshore costs, but it’s a different story south of the border. “In the United States, the price increases have been higher and more frequent because they haven’t had what I call the currency shield.”

Last year’s acquisition of Fishery Products International’s manufacturing and marketing group has made High Liner the largest seafood producer in Canada and positioned the company to be a much stronger player in the North American market.

“We now offer a broader array of seafood products to an expanded customer base and we have relationships with every major grocery retailer and every major food service distributor in Canada and the United States,” the chief executive officer said.