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
Fueling Life’s Everyday Adventures with Exceptional Seafood

MARKET LEADER- STARKIST

 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
 Market Share

16%

44% StarKist
BumbleBee
17%
Chicken of the sea
Others

23%
 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