Marketing Strategy for the Development of an Ornamental Fish Industry in the Gascoyne Region of Western Australia

Final Report

Prepared for

Gascoyne Inland Aquaculture Group (GIAG)
by

PSM Group Pty Ltd
June 2000

Gascoyne Ornamental Fish Industry – Consultants' Report

TABLE OF CONTENTS
1. 2. 3. DEFINITIONS ............................................................................................................................................ 4 EXECUTIVE SUMMARY........................................................................................................................... 5 APPROACH AND METHODOLOGY........................................................................................................ 7

3.1 Identification and selection of product categories ................................................................................. 7 3.2 Market profiles ...................................................................................................................................... 7 3.2.1 Ornamental fish ............................................................................................................................. 7 3.2.2 Native Food Fish ........................................................................................................................... 8 3.3 Investigation of marketing elements...................................................................................................... 9
4. 5. BACKGROUND ...................................................................................................................................... 10 PRELIMINARY SELECTION OF CANDIDATE SPECIES ..................................................................... 13

5.1 Identification of Species Groups ......................................................................................................... 13 5.2 Market Assessment.............................................................................................................................. 14 5.2.1 Product Value .............................................................................................................................. 15 5.2.2 Market Share ............................................................................................................................... 16 5.2.3 Market Opportunity ..................................................................................................................... 16 5.3 Production Assessment........................................................................................................................ 18 5.3.1 Level of skill................................................................................................................................ 18 5.3.2 Labour input ................................................................................................................................ 18 5.3.3 Capital Requirement.................................................................................................................... 18 5.3.4 Feed Requirements ...................................................................................................................... 18 5.3.5 Crop Cycle................................................................................................................................... 19 5.3.6 Environmental Limitations .......................................................................................................... 19 5.4 Outcomes of the Assessment............................................................................................................... 21 5.4.1 Advanced native juveniles for on-growing.................................................................................. 21 5.4.2 Koi Carp ...................................................................................................................................... 21 5.4.3 Natives species for the ornamental market.................................................................................. 22 5.4.4 Fancy Goldfish ............................................................................................................................ 22 5.4.5 Livebearers .................................................................................................................................. 22 5.4.6 Rainbows ..................................................................................................................................... 23
6. MARKETING STRATEGY ...................................................................................................................... 24

6.1 POTENTIAL CANDIDATE SPECIES GROUPS.............................................................................. 24 6.2 Cooperative marketing ........................................................................................................................ 25 6.3 Positioning Strategy............................................................................................................................. 26 6.3.1 ‘Australian origin’ ....................................................................................................................... 26 6.3.2 ‘Premium quality’........................................................................................................................ 26 6.3.3 ‘Credibility’ ................................................................................................................................. 27 6.3.4 Wide selection ............................................................................................................................. 27 6.4 Pricing ................................................................................................................................................. 28 6.5 Packing and Transportation ................................................................................................................. 28 6.6 Distribution.......................................................................................................................................... 29 6.7 Promotion ............................................................................................................................................ 29 6.8 Establishing export markets................................................................................................................. 31
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Gascoyne Ornamental Fish Industry – Consultants' Report 7. ACTION PLAN ........................................................................................................................................ 33

7.1 The GIAG Vision - Is It Feasible?....................................................................................................... 33 7.2 Key Marketing Steps ........................................................................................................................... 34 7.3 Critical Pathway .................................................................................................................................. 34
8. 9. 10. REFERENCES ........................................................................................................................................ 37 CONTACTS ............................................................................................................................................. 41 APPENDIX .......................................................................................................................................... 44

10.1 10.2 10.3 10.4 10.5 10.6 10.7

Appendix 1 – Market Profile........................................................................................................... 44 Appendix 2 – Production Assessment ............................................................................................. 44 Appendix 3 – Customer Survey....................................................................................................... 44 Appendix 4 – Producer Survey........................................................................................................ 44 Appendix 5 – Export of Live Native Fish ....................................................................................... 44 Appendix 6 – Schedule 4 Exempted Species .................................................................................. 44 Appendix 7 – IATA Live Animal Transport Regulations ............................................................... 44

DISCLAIMER
This report has been prepared by PSM Group Pty Ltd ("the Company") for the Gascoyne Inland Aquaculture Group (GIAG) (hereafter referred to as "the Client"). The information contained herein is copyright. No part of it may in any form or by any means be reproduced or stored in a retrieval system or transmitted without prior written permission of the Client. The statements and opinions contained herein are given in good faith and in the belief that they are not false or misleading. Neither the Principal Consultants nor the Company undertakes responsibility in any way whatsoever to any person (other than the Client) for the report, including any errors or omissions therein, arising through negligence or otherwise however caused. In addition to and without limiting the generality of the foregoing, so far as any reference in this report is or may be taken to be in respect of possible or potential commercial returns upon an investment in any existing, contemplated or future project, no responsibility is undertaken in any way whatsoever to any person, including the Client.

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1. DEFINITIONS
The following definitions are used throughout the report: AOTO – Aquatic Organisms Trade Organisation AQIS – Australian Quarantine and Inspection Service. Brackish water fish – Fish with a salinity more than 4 parts per thousand (ppt) but less than 10ppt. CITES – Convention on International Trade in Endangered Species of Wild Fauna and Flora. Collector/Diver – A person with a licence to collect and sell native finfish. Commercial Breeder – Breeder of aquarium fish licensed by state or territories fisheries departments, or producing fish on a commercial basis. FAO – The Food and Agriculture Organisation of the United Nations. Finfish (fish) – Teleosts and elasmobranchs, including freshwater, brackish and marine species, tropical and temperate species, eggs, larvae, juveniles and adult forms. Freshwater fish – Fish originating in freshwater streams or lake environments, and held in freshwater tanks. Hobbyist – Includes all unlicensed operators and breeders, regardless of whether they are keeping, selling, 'swapping/trading' or giving away their fish. Importer – A licensed importer of aquarium fish who is usually a wholesaler (importer / wholesaler), although some retail operations also import fish (importer / retailer). Marine fish – Fish originating in marine or estuarine waters, and held in salt water tanks/aquaria. OFI – Ornamental Fish International Ornamental – Indicates species not typically used as food for humans or other animals – usually such fish are displayed or kept as pets. Public Aquaria – Facilities open to the general public where the fish are generally for display only. Retailer – General pet shops and specialist aquarium shops that sell ornamental fish and associated products to consumers. Retailer Specialist – Specialist aquarium shops that only stock ornamental fish and associated products and/or ones that import their own fish. Wholesaler – A person who sells imported fish or fish produced by commercial breeders either to retailers or other breeders.
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2. EXECUTIVE SUMMARY
This study has involved undertaking an extensive literature review and an industry survey to ascertain the likelihood of success of an ornamental fish industry in the Gascoyne Region of Western Australia. The findings suggest that a number of opportunities for such a venture exist, and clear directions for taking advantage of these opportunities are provided. The research involved in this study has provided a great deal of information, which will be of benefit to GIAG in planning and developing an ornamental fish industry in the Gascoyne Region. When selecting the species to be cultured, this report recommends that the following considerations be taken into account: 1. Aquaculture is likely to be a secondary enterprise for members of GIAG, limiting time and capital resources, so the easy to culture and inexpensive to produce species are the most appropriate. Artificial or pelleted diets are much easier and cheaper to provide than live feeds. Deleting the requirement for broodstock and a breeding program, as with the native food fish, further reduces capital and operating costs. Selective breeding can take several generations, so the initial purchase of high quality broodstock is critical for successful production. If outdoor culture in ponds or tanks is to be undertaken, some expense will be required to shade or protect the fish from unsuitable climatic conditions (eg. harsh sun, wind blown dust and debris, torrential rain). It is critical that packing and transport methods are of ‘best practice’ standard otherwise significant losses of fish will occur – the further the distance to be traveled, the greater the likelihood that problems will occur.

2. 3. 4. 5.

6.

As a result of the findings of the survey, other practical recommendations for GIAG members include: 1. 2. 3. 4. 5. 6. 7. 8. Set a market price that allows profitability. Look for ways to reduce freight costs. Resistance towards new entrants in the marketplace could be overcome by disease-free accreditation, and other forms of quality assurance to provide points of differentiation. Try not to compete against current producers, ie. produce fish not being grown in Australia. Target market niches such as livebearers and rarer types of native fish. Concentrate on quality, price and consistency of supply, also ensure that the fish are correctly sorted prior to shipment and are 'true to type’ and size. Establish relationships with larger wholesalers who tend to show more loyalty to producers. Label or differentiate locally-produced fish as being ‘Australian made’ can assist with marketing.

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Summary of Main Recommendations The following is a summary of the main recommendations of this report to GIAG: 1. GIAG members select at least three of the following groups for development: • • • • • • • 2. live bearers for local and interstate markets; common goldfish for local markets; fancy goldfish for local and interstate markets; saratoga for local, interstate and export markets; koi carp for local and interstate markets; barbs for local and interstate markets; native advanced juveniles for local markets.

Once experience has been gained in growing ornamental fish, GIAG members consider the culture and marketing of African cichlids. GIAG expands its field of activities to cooperative buying and marketing. Specialisation into discrete phases of the culture process by GIAG members should be encouraged. GIAG should develop and implement an appropriate quality assurance plan for the industry. Opportunities to include other aquaculturists in the region should be acted upon. GIAG promote a wide selection of products as ‘Australian made’, 'quality assured’, and ‘disease-free’ certified. GIAG must ensure all dealings with clients aim to establish and maintain credibility. GIAG should aim to position itself at the ‘premium quality’ end of the market. GIAG should adopt a ‘going-rate’ pricing policy (ie. accepting prices dictated by real cost of imports). GIAG members should utilise packing, packaging methods & materials, and modes of transport which ensure maintenance of product quality. GIAG members should sell product directly to wholesalers on a regular basis. GIAG members should undertake personal selling directly to the wholesalers and major retailers using the positioning strategy. GIAG should develop a logo and brand name to provide market definition through the marketing chain.

3. 4. 5. 6. 7.

8. 9. 10.

11.

12. 13.

14.

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3. APPROACH AND METHODOLOGY

3.1

Identification and selection of product categories

The range of species of ornamental fish and invertebrates available to the hobby is very large, with estimates of up to 3,000 utilised on a regular basis (Bassleer, 1994). In just fish species alone there may be up to 1,500 species kept by hobbyists (Willis, 1995). In order to simplify demand assessment for ornamental fish, different species and varieties of fish were grouped together. As taxonomic groupings are widely used in the industry (Bassleer, 1994), this was used as the basis of determining product categories.

3.2

Market profiles

The following section addresses the demand and supply issues within the international and domestic markets for both ornamental fish species and native food fish species.
3.2.1 Ornamental fish

There is a lack of published data on production and sales of ornamental fish in Australia and overseas, with no centralised data collection (Willis, 1995). Much of the existing information is aggregated giving total numbers and value for all ornamental fish with no species data available (Chapman et al., 1997). However, much of the information is available from anecdotal data from industry and government sources. Another way in which these data may be accessed is through surveys of industry participants. The first step was to identify the major industry operators in Australia such as producers, wholesalers, importers, and retailers. Major wholesalers and import/exporters in international markets were also identified, particularly in Singapore, Hong Kong, USA, Japan, and Europe. Mailing lists were then developed for both national and international industry members. Relevant industry associations and groups such as Australian PIJAC, and international groups such as Aquatic Organisms Trade Organisation (AOTO, based in Britain), and Ornamental Fish International (OFI, based in Germany) were also contacted. A literature search of the current data available was also undertaken.
3.2.2 Survey Structure

The mail survey method was used to gather data, as there are over 90 commercial and licensed breeders identified in Australia at present, and at least 25 wholesalers and major retailers (PSM, 1999). A mail survey is the most efficient way of contacting such a large number of potential respondents (Stanton et al., 1994). It is expected that customer surveys will have a reasonably high response rate, as generally retailers of fish are seeking local sources of fish. The survey response from producers is expected to be low as they may perceive the Gascoyne Inland Aquaculture Group (GIAG) as potential competition to them. However, the Consultants have a number of ‘friendly’ contacts in this sector. A follow-up with selected organisations will be undertaken after the return date to maximise response rates and gather further information regarding the industry. International industry members will be contacted via e-mail, with specific market related questions.

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In all, 75 commercial breeders and 25 importers, wholesalers and retailers of ornamental fish were contacted (see Appendices for contact list). A number of stakeholders, including members of the ornamental industry reference group were also sent surveys. With the exception of the hobbyist sector and the retail sector, a significant proportion of participants involved in the ornamental fish industry were contacted ei ther by postal surveys, telephone calls or email. The number of surveys and respondents for each sector are summarised in Table 2.1 by State.

Table 2.1 – Summary of mailed surveys (M), telephone calls (T) and returned surveys (S) for each State and Territory State Qld NSW ACT Vic Tas SA WA NT International Total Importers (5) (5) (0) (4) (1) (2) (5) (1) (1) (~25) Commercial Breeders (33) 0 (17) (0) (6) (2) 0 (2) (32) 0 (2) (~100)

The customer survey (see Appendix 1) and producer survey (Appendix 2) were forwarded by mail with an accompanying covering note in early April 2000, after being checked and approved by the GIAG group. These surveys had a requested return date of 20 April 2000. Follow-up telephone interviews were carried out after the return date with key industry members to maximise responses and the amount of data gathered. A number of survey forms were returned with incomplete data. In these cases, it was presumed that the respondents did not have access to the requested data or that they were reluctant to provide the data. This problem related principally to estimates of national production levels and possible market niche information, with the majority of producer respondents failing to provide any such information. In order to maximise the sample size, data from incomplete forms were used where appropriate.
3.2.3 Native Food Fish

Annual surveys of international production – particularly those produced by the Food and Agriculture Organisation of the United Nations (FAO) – and national production and gross value are published and these were examined for data relevant to this report. Market intelligence regarding advanced juveniles was obtained through phone surveys, and current licence holders for the production of native species in Western Australia were contacted. The investigations were aimed at identifying species, seasonality of demand, total potential demand, shipping requirements, cost of larvae/eggs and other costs of production. Investigations were also conducted in the eastern states to identify potential suppliers of larvae/eggs and to ascertain the primary issues associated with the translocation of stock.

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3.3

Investigation of marketing elements

Aspects of packaging and transport of ornamental and native food fish were established through discussions with industry members and assessment of available literature. Costs were based on quotes supplied by various supply companies of packaging materials for the ornamental and aquaculture industries, as well as major air freight and freight forwarding companies. Market access issues were established through assessment of available literature, examination of relevant government websites, discussions with Australian Quarantine and Inspection Service (AQIS) personnel and communication with relevant overseas government officials.

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4.

BACKGROUND

The GIAG had undertaken a considerable amount of research prior to the commissioning of this Marketing Strategy. This work has been reported in three principal documents including: 1. Land Based Production of Warmwater Fish in Carnarvon – Pilot Project Summary (1996); 2. Process Charter for the Gascoyne Inland Aquaculture Group (1999); and 3. Strategic Plan for the Gascoyne Inland Aquaculture Group (1999). Upon commencement of this project, each of the above documents was reviewed so that further consideration could be given to the primary findings. In essence, these studies enabled the creation of a vision for GIAG, which is quoted as follows.

The vision for the Group is to: - use the challenge of geographically isolated aquaculture to improve the productivity of the region and revitalise the regional economy, and - produce a non-climate dependent product, based on secure artesian water use, which meets global demand. The strategic business planning process identified ornamental fish production as the most suitable aquaculture option for pastoralists as initial capital outlays were minimal and a low skill level was required to successfully produce most species.

The studies concluded that the most suitable aquaculture opportunity for pastoralists would be for the production of aquarium fish for the following reasons: 1. There is a short lead time, of around three months, between stocking adults and selling produce;
Comment: While short lead times are possible, previous experience suggests that a lead time of at least six months is required for the production of most species. Industry members also indicate that it could take 12 to 18 months before regular, consistent production is achieved for any species of fish cultured. This time may be increased in circumstances where a lack of experience or expertise exists.

2. Total coordination of the supply chain is achievable from brood stock and fry supply to wholesale and customer retail outlets;
Comment: A choice must be made to sell either through wholesalers (high volume low value) or retailers (low volume high value), since significant problems can result from a policy of selling to your customers’ customers.
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3. Low initial capital cost to commence full commercial production;
Comment: It is true that low technology systems generally require a relatively low capital cost to establish. However, in the case of some ornamentals, medium levels of technology may be required to produce commercial quantities.

4. Ornamental fish production parallels a typical pastoral company in terms of available resources of infrastructure and staff requirements;
Comment: Production of large numbers of ornamental fish may require significant labour input in terms of feeding, grading/culling fish, harvesting and sorting fish, preparation and packing of fish for transport. For some species this requires specialist skills, whilst for others it may not.

5. Additional inputs are minimal eg. no requirement for ice refrigeration or permanent staff;
Comment: New entrants to the industry who may lack the necessary skills and experience for commercial production of fish may need access to experience and expertise (particularly for health management) from outside sources.

6. Operational costs for a commercial scale operation are low, in comparison to most aquaculture production systems;
Comment: Low technology, extensive production systems are inexpensive to build and operate. However, there is a trend within the industry internationally to adopt more intensive culture practices. Ornamental fish production is also likely to be more labour intensive than other forms of aquaculture due to the high reliance on grading, sorting and culling fish by hand.

7. Skilled companies currently involved in aquarium fish cultivation and marketing currently operate within the Gascoyne region;
Comment: It will be important for new entrants with little or no experience to be ‘mentored’ or have access to experienced producers. Experience shows that new entrants face an exponential learning curve and will undoubtedly encounter problems during start-up. It will be important to access learning resources such as the Regional College of TAFE at Geraldton.

8. Synergies exist with pastoral core business enterprises and there is scope for integrated agriaquaculture activities;
Comment: The opportunity to produce a range of aquatic or partially aquatic plants for the aquarium market may be possible using wastewater from the fish production system. Additionally, this wastewater could be used for an “aquaponics” operation or for irrigating orchards. Whilst the report has not addressed either of these opportunities, they may warrant further consideration.

9. Possibility exists to extend project to utilise sub-artesian bores.
Comment: The high salt content of the bores is likely to result in the water being unsuitable for the breeding of many species of ornamentals. Species originating from areas such as the Amazon River basin are adapted to water with very low mineral content and will not breed successfully in waters with high mineral content. Additionally, it is likely that the high water temperatures will also prove to be unsuitable for some species. Industry experience suggests that water temperatures exceeding 30 to 33oC can induce stress in many species and may result in high mortalities when the fish are

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handled. Various forms of water treatment can be deployed to enhance water quality, but these systems normally result in increased cost.

The investigations undertaken as part of this study will provide additional input to each of these strategic elements. A section is devoted to further consideration of these issues at the conclusion of the report. The following points of relevance have also been identified in previous reports. 1. Relatively close proximity to export markets in Europe
Comment: Of the potential export markets, Europe is one of the largest regional markets in the world. Exporting fish to these markets may offer some cost savings over shipping from eastern states of Australia, but they would be expected to be minor. Furthermore, access to air freight space at certain times of the year may be more restrictive from Perth than from Sydney or Melbourne to these destinations.

2. Climate of the Gascoyne region
Comment: Climate is likely to be conducive to the outdoor production of tropical ornamental species for much of the year. However, temperature extremes in summer and winter may have an adverse effect on growth and survival of fish. Additionally, high irregular rainfall and high evaporation rates experienced in the region may also require that specific production strategies be implemented.

3. Creation of a regional producers cooperative
Comment: A structured regional approach to the development of an ornamental fish aquaculture industry in the Gascoyne would be likely to involve the establishment of a farmers’ cooperative. Through the deployment of a cooperative approach, considerable savings in capital and operating costs could be achieved by individual operators, both at the production and marketing levels.

4. Establishment of a ‘disease free’ area
Comment: A regional approach to development could also involve the establishment of a network of producers capable of producing ‘disease free’ fish. The geographic isolation of the Gascoyne would limit exposure to exotic diseases provided that the translocation of diseased fish was prevented. Strict quarantine protocols and stress testing of any fish brought into the area could prevent any occurrence of such introductions of disease. A ‘disease free’ status may provide significant benefits to producers when establishing markets within Australia or overseas and may enhance any market positioning strategies which aim to promote the availability of high quality fish.

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5. PRELIMINARY SELECTION OF CANDIDATE SPECIES
It is estimated that there are more than 1,500 species of ornamental fish, which are produced and sold worldwide. Since both the production and marketing characteristics of these species are quite variable, it is necessary to consider ornamental fish as comprising of a number of species groups. These groups can be defined in accordance with a range of different physical characteristics or by taxonomic group. Generally, taxonomic group is used as the main point of differentiation for ornamental fish (Bassleer, 1994). Given the large number of ornamental species, it was deemed necessary to undertake a preliminary selection process to identify those species groups that are likely to offer the greatest opportunity to GIAG. This preliminary assessment involved consideration of each species group within a context of a number of key marketing and production parameters and resulted in the identification of five candidate species groups. In addition, consideration was given to the production and marketing potential for advanced native fish juveniles. This assessment was presented in the first report to GIAG, entitled Marketing Strategy for the Development of an Ornamental Fish Industry in the Gascoyne Region of Western Australia: Report # 1, and has been included in this section for completeness.

5.1

Identification of Species Groups

Of the estimated 1,500 or more species used in the industry, around 30 species dominate sales. Chapman et al. (1997) reported that 32 species account for 58% of imports into the USA, and that two species, namely guppies (Poecilia reticulata) and neon tetras (Paracheirodon innesi), accounted for 37% of US imports in 1992. Other important species and taxonomic groups of fish noted by Bassleer (1994) include: • • • • • • • Characidae (tetras) Cyprininae (barbs and goldfish) Callichthyidae (mostly Corydoras species) Loricaridae (Plecostomus and Ancistrus) Poeciliidae (livebearers, ie. guppies, swordtails, platys, mollies) Cichlidae (cichlids, mouth-brooders and egg-layers) Anabantidae (labyrinthfish such as Betta and gouramis)

Whilst the industry generally uses taxonomic group to classify ornamental fish, characteristics such as size or length of fish, fin size and shape, body shape, origin of fish, and colour variety may also be used to differentiate products into different segments (Brown & Gratzek, 1982; Willis, 1995). These characteristics can be important in determining the value of different species of fish, with rare and unusual fish generally fetching the highest prices (Willis, 1996). Boldly coloured fish with large fins also typically command high prices. In Australia, categories of ornamental fish are usually based on taxonomic groups (PSM, 1999). Table 4.1 lists the species groups commonly used by industry.

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Table 5.1 – Major groups of ornamental fish traded in Australia and percentage of sales in 1998
Industry Grouping Barbs Catfish Cichlids Fancy goldfish Common goldfish Bubble nest breeders Koi carp Livebearers Taxonomic Grouping Members of the family Cyprinidae Members of the sub-order Siluroidea Members of the family Cichlidae Carassius auratus (Ryukin, pearl scale, oranda, lionhead, pom pom, bubble eyes, telescopes) Carassius auratus (Comet, fantails, black mohr, shubunkins) Members of the family Anabantidae Cyprinus carpio Members of the family Poecilidae specifically guppies (Poecilia reticulata), mollies (Poecilia spp), swordtails, (Xiphophorus helleri) and platys (Xiphophorus maculatus) Members of the family Charadcidae Members of the Family Melanotaeniidae Australian native species not covered in the above Other species not covered in the above groups or fish that were not grouped % of Australian Sales 4.7% 3.9% 6.0% 4.2% 30.0% 3.5% 13.9% 11.5%

Tetras Rainbows Other Natives Other or not specified Total
Source: PSM, 1999

13.8% 0.7% 0.1% 7.7% 100.0%

Since some of these groups incorporate hundreds of species, the data provided must be treated broadly. However, the groupings do provide a reasonable basis for consideration of the production and market potential for ornamentals in Australia.

5.2

Market Assessment

In order to assess the marketing opportunities for ornamental fish produced in the Gascoyne, three markets have been defined. Market A – Local Market (Perth and nearby) Market B – Interstate Market (primarily Melbourne, Sydney, Adelaide) Market C – Export Market (USA, Europe, Asia) The markets have been geographically categorised since the primary constraints to sales are most likely to be dependent upon factors that are principally influenced by distance. These constraints include transit times, the number of freight options, freight costs and barriers to entry. The issue of ‘barriers to entry’ is one that exists between states within Australia as well as internationally. The local market primarily includes Perth and the major population centres in Western Australia. Target customers in this market are likely to be the wholesalers that service a large number of retail pet shops. Preliminary investigations suggest that there are at least five small wholesalers in Perth that service retailers in the metropolitan area as well as country areas in Western Australia. These investigations also reveal that there are at least 60 retailers in the Perth area with an additional 50 retailers located throughout Western
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Australia. It is estimated that this market takes about 500,000 to 750,000 fish per annum (Derek Hall, WA PIJAC, pers. comm., 2000). Whilst the interstate market could comprise all other states of Australia, it is anticipated that the Victorian (Melbourne), New South Wales (Sydney) and South Australian (Adelaide) markets offer the greatest opportunity. Queensland and Tasmania are likely to be less suitable markets since they are small and would be costly to service from the Gascoyne region. In the interstate market, there are approximately six major wholesalers that handle the majority of fish. These wholesalers are located in Melbourne, Sydney and Adelaide. There are also about 20 major specialist retailers in these centres. Whilst these retailers only represent a few percent of the total number of retailers, they handle more than half of the fish sold at the retail level. It is estimated that this market takes at least 13.5 million fish per annum (from PSM, 1999). The international trade in ornamental fish is significant, with some 300 million fish sold throughout the world annually (Kaiser & Vine, 1998). The primary markets are the industrialised areas such as the USA, Europe and Japan, which import fish mainly from Singapore, Hong Kong, Malaysia, Philippines, Sri Lanka, Indonesia, and the state of Florida in the USA. There is a limited but potentially lucrative opportunity for the introduction of ‘new species’ into the world market. These species may become established within the industry over time or may always remain in the introductory phase of the product life cycle. The level of uptake is primarily driven by value. In general, if a new species can be produced a market will exist; however, the extent of the market will be difficult to determine. There have been several attempts by Australian producers to export native fish with mixed success. The main problem experienced by exporters has been their inability to supply sufficient numbers of fish on a regular basis. Given their extensive experience in the industry and high level of access to producers throughout Australia, it would be reasonable to suggest that the export market for new species is difficult to access even for experienced exporters. Three primary parameters were used to assess the market potential for each of the species groups identified, including: • Product Value • Market Share • Market Opportunity Each of these parameters is discussed below and assessed in Table 4.2.
5.2.1 Product Value

The (wholesale) value of ornamental species ranges from as little as 30 cents per piece up to as much as $50 per fish. Given normal supply-demand conditions (ie. when market barriers are ignored), the value of an ornamental fish will be high if its availability is low. Since the availability of a particular species or product type is generally a function of production costs, it is reasonable to assume that, in most cases, the most expensive fish are the most difficult or costly to produce. This is an important issue for GIAG and other uninitiated ornamental producers. Whilst it is always attractive to consider the production of high valued ornamentals from the marketing perspective, this may not be a profitable choice for GIAG given the likely production constraints. Four product value ratings were used in the assessment (see Table 4.2). They represent wholesale values at rates delivered to the wholesaler premises.

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5.2.2 Market Share

In a similar way to product value, the market share of a species or product type is strongly influenced by production cost. Those species, which are relatively easy to produce (such as goldfish, livebearers and tetras), have the largest share of the market and the lowest value. Three market share ratings were used in the assessment (see Table 4.2). Whilst market share for a specific species group tends to be similar across all three markets, some differences do exist between the Australian market and the export markets. Consequently, the three markets were considered separately.
5.2.3 Market Opportunity

Whilst market opportunities for ornamental producers are strongly influenced by species value and market share, there is a host of other influences which may expand or limit marketing opportunities for certain species. For example, when market barriers (such as quotas, quarantine, prohibitions, etc.) are lifted, new marketing opportunities often arise. Three market opportunity ratings were used in the assessment (see Table 4.2).

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Table 4.2 – Summary of Market Assessment
Ref Species Grouping Cichlids Catfish Common goldfish Fancy goldfish Koi carp Gouramis Livebearers Tetras Barbs Walking fish Rainbows Saratoga Other natives Native advanced juveniles Value Local 1 1 2 1 1 1 2 2 2 0 1 0 1 * Market Share Interstate 1 1 2 1 1 1 2 2 2 0 1 0 1 * Market Opportunity Export 1 1 2 1 2 1 2 2 2 0 0 0 0 * 1 0 1 2 (L, I) 2 (I) 2 (L) 1 0 0 1 2 (L, I, E) 2 (E) 2 (L, I, E) 2 (L,) Ranking

1 2 3 4 5 6 7 8 9 10 11 12 13 14
LEGEND

2, 3 2 1 2 3 2 1 1 2 3 2 4 2, 3 2

C C C B A B B C C C B B A A

Farm Gate Value: 1 = up to $0.40 each

2 = $0.40 to $2.00 each

3 = $2.00 to $10.00 each 4 = more than $10.00 each

Market Share: 0 = nil or close to nil * separate market Market Opportunity:0 = Diminishing Market Type: L = Local Market Ranking: A = high potential

1 = less than 5% of market

2 = More than 20% of market

1 = Static I = Interstate Market B = medium potential

2 = Expanding E = Export Market C = low potential

Assessment assumes that ease of market access (quarantine, transport costs, transportability) declines from local to interstate to export.

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5.3

Production Assessment

In order to determine the most suitable species groups for the Gascoyne, some assumptions have been made in respect of the type of systems that may be used and the proficiency and expertise of the operators. Specifically, these assumptions include: 1. That simple culture systems, such as large tanks with minimal filtration, will be used; and 2. That GIAG will have little expertise in the breeding, production, harvesting and distribution of live fish, and in particular ornamental fish. Six primary parameters were used to assess the market potential for the species groups identified.
5.3.1 Level of skill

While it takes little skill to breed a few fish in a home aquarium, commercial production of ornamental species requires considerable skill and a great deal of time and effort. Poor attention to detail can result in the production of poor quality fish that are unmarketable. However, there are var ying levels of skill required for production of different ornamental species. In general terms, these skills include broodstock management, spawning, larval rearing, water quality management, culling and grading fish, disease management, and grow-out management. Three levels of skill requirements were used in the assessment (see Table 4.3).
5.3.2 Labour input

Since the production of ornamentals is likely to be a secondary enterprise for members of GIAG, the amount of time involved in the production of fish must be considered. As the level of skill required to produce fish varies, so does the labour input. In general terms, labour input includes culling and grading fish, feeding, packaging and monitoring fish. Three levels of labour input were used in the assessment (see Table 4.3).
5.3.3 Capital Requirement

Capital costs vary with the type of equipment/systems employed in the production of fish. Some species require superior water quality conditions to others and, consequently, more expensive filtration equipment is required. The type of culture tanks required may also vary. Some species may only be produced indoors whilst other are suitable for outdoor production. Three levels of capital requirement were used in the assessment (see Table 4.3).
5.3.4 Feed Requirements

While most species of ornamental fish will readily accept artificial feeds at market size, the feeding requirements for earlier life stages, particularly larvae and fry, may vary considerably. This variation is, to a large degree, dependent on their size during the early life stages. Smaller species are generally more difficult to feed, with some of the smallest species requiring several types of live feed during their growth cycle. This requirement adds considerably to the labour input, and the complexity and cost of production. Three levels of feed requirement (by type of feed) were used in the assessment (see Table 4.3).
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5.3.5 Crop Cycle

Some species have a high turnover or short crop cycle. Species with a short crop cycle may provide advantages to the producer when compared to those with a long crop cycle. Such benefits may include improved cash flow, better return on capital investment, enhanced capacity to regularly supply the market, etc. Three levels of crop cycle were used in the assessment (see Table 4.3).
5.3.6 Environmental Limitations

Many species of fish have specific environmental requirements in relation to water chemistry and spawning cues (moon phases, photoperiod, atmospheric pressure drops, etc.). These requirements further add to the complexity and cost of production for these species. Two levels of environmental limitations were used in the assessment (see Table 4.3). These limitations were assessed with respect to ease of compliance (ie. easy or difficult to comply with the environmental limitations).

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Table 4.3 – Summary of Production Assessment
Ref Species Grouping Cichlids Catfish Common goldfish Fancy goldfish Koi carp Gouramis Livebearers Tetras Barbs Walking fish Rainbows Saratoga Other natives Native advanced juveniles Level of Skill 1 2 3 2 2 2 3 1 2 1 2 1 2 3 Labour Input 1 2 3 2 2 2 2 1 2 3 2 2 2 2 Relative Capital Required 1 2 3 2 2 2 3 1 2 3 3 3 3 3 Feed Required 2 2 2 2 2 1 3 1 2 3 1 2 1,2 3 Crop Cycle 2 3 3 1 2 2 3 3 3 1 2 1 2 1* Environ. Limitation 1 1 2 2 2 2 2 1 2 2 2 2 2 2 Ranking

1 2 3 4 5 6 7 8 9 10 11 12 13 14

C B A B A B B C A B B B A A

LEGEND Level of skill (husbandry required): Labour input: Relative Capital Requirement: Feed Requirement (expense / skill): 1 = High 1 = High 1 = High 1 = Difficult live feed 2 = Medium 2 = Medium 2 = Medium 2 = Simple live feed 3 = Artificial feed 2 = 2 crops/yr 3 = 3 or more crops/yr 2 = easy B = medium potential C = low potential 3 = Low 3 = Low 3 = Low

Throughput (crop rotation):

1 = 1 crop/yr

Environmental limitations: Ranking

1 = difficult A = high potential

* In the case of Native Food Fish, market demand is assumed to be for over-winter stock, thereby limiting crops per year Assessment assumes availability of brood stock

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5.4

Outcomes of the Assessment

After assessing the production and marketing constraints for the different groups of fish, each was ranked from A to C, according to its performance. The following table lists those species groups that achieved at least an A or B ranking for both the production and marketing constraints. Those with a lesser ranking are considered unsuitable for the Gascoyne region, and have been excluded from further consideration in this assessment.
Table 4.4 – Market and Production Rankings for Selected Species Groups
Species Group Advanced native juveniles Koi carp Other Natives Fancy Goldfish Livebearers Rainbows Saratoga Gouramis Ranking Market Ranking A A A B B B B B Production Ranking A A A B B B B B

A = high potential

B = medium potential

Since at this stage the assessment still provides a broad outcome, each group was further assessed to enable the selection of the Candidate Species Groups. Following is a brief description of the outcomes from the second level of assessment. The Consultants performed this assessment with input from several key industry players. An overview of the findings for each of the selected Candidate Species is provided.
5.4.1 Advanced native juveniles for on-growing

The market for advanced juveniles (50 g to 100 g +) is suggested to be an emerging one in Western Australia. As production of farmed native table fish increases, so too does the opportunity to supply advanced juveniles to farms for on-growing. Farms that produce native table fish in Western Australia are located in the southern regions of the State, where water temperatures are subject to significant seasonal fluctuations. The opportunity to supply advanced juveniles arises from the current practice of farms stocking juveniles at a size which requires two growing seasons before marketable ‘table sized fish’ can be produced. An opportunity exists for GIAG to supply advanced juveniles that would require only one season for growout on these farms.
5.4.2 Koi Carp

Koi carp is a popular species with a high market acceptance. Whilst these fish can only be sold in WA and NSW at present, there is an industry expectation that the market will expand in the future to include Victoria. This restricted market is reasonably well serviced by several large producers that supply several million fish annually. Willis (1995) estimated Koi carp production at more than 3.26 million fish in 1994 -95. Data from PSM (1999) indicate that Koi are a major market in Australia, accounting for approximately 14% of the national market. There is also a growing trend towards the use of water gardens and ponds which feature species such as Koi and goldfish (Brent Worsely, Petland Petshop, pers. comm., 2000), which suggests the
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popularity and demand for these species may increase. This potential for market expansion, and relative ease of production suggest an opportunity to produce these fish.
5.4.3 Natives species for the ornamental market

There are expanding market opportunities for native species with an ornamental value (a fish must have some sort of aesthetic appeal to have a market value in the ornamental fish industry). These opportunities exist in all three geographic markets, although the magnitude of these markets cannot be determined with certainty. Preliminary investigations suggest that sales in the order of 200 to 300 fish per week may be possible for select species within Australia. The potential for export sales would be expected to be much greater. Since native species can be selected from local areas, they would be expected to be well adjusted to local conditions and relatively simple to produce. Species under consideration would include Spangled Perch Leiopotherapon unicolor, Empire Gudgeon – Hypseleotris compressa, Golden Gudgeon – Hypseleotris aurea, Yellow Trumpeter – Amniatada cadavittata, and Murchison River Hardy Head – Craterocephalus cuneicep, among others. Species that would be specifically excluded from this group include the native rainbows since there is no shortage of supplies of these species. The critical issue is more likely to be one of marketing, which will be dependent upon the suitability of the species for the ornamental industry.
5.4.4 Fancy Goldfish

Preliminary discussions with ornamental wholesalers suggest that there is an expanding market for fancy types of goldfish. There are few Australian commercial producers of these varieties and consequently locally produced supplies are negligible. Therefore supplies are mainly imported. Furthermore, prices for these fish are likely to increase when new AQIS regulations come in place in May this year due to increased quarantine requirements. One of the limitations to the local production of these species is the lack of availability of brood stock and the complex stock management regimes involved in their production. Care must be taken in choosing and mating broodstock in order to maintain quality genetic lines. High cull rates due to inferior colouration and body-shape are also required to ensure quality control. However, goldfish are well suited to low technology production systems and ideally should be grown outdoors to promote good colouration. Therefore they offer good potential for GIAG as a candidate species.
5.4.5 Livebearers

Livebearers are one of the most popular of all groups of ornamental fish, and consequently market demand is high. The farm gate price for this group will vary from $0.25 to $0.95 per fish, with a market for several thousand fish per week in Australia. However, with recent changes to AQIS regulations the duration of quarantine has been reduced to one week. This is likely to result in reduced costs to importers and may subsequently result in a fall in wholesale and retail prices. In recent years, the quality of imported fish has generally declined, leading to an increase in the demand for locally produced fish. The production of these fish is relatively simple with adult females producing live fry that can be fed entirely on artificial feeds.

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5.4.6 Rainbows

Most species of rainbows with an ornamental value are currently being produced in Australia. Many of these fish are also produced in large numbers overseas, and at present there is likely to be only a limited export market. Whilst there are opportunities to market these species in Australia, volumes are likely to be small. Rainbows require a range of live foods through their early growth cycle due to their small size. They are generally considered to be relatively difficult to culture, and have longer crop cycles than other groups of fish, with up to 5 months required to grow suitably sized fish (Greg Willis, Tasmanian Ornamental Fish Farm, pers. comm., 2000). However, as these fish are native to Australia it is expected that they will be well suited for outdoor production and may be suited to extensive production in ponds or tanks with algal and zooplankton blooms.

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6. Marketing Strategy 6.1 POTENTIAL CANDIDATE SPECIES GROUPS

In broad terms the market potential for Australian fish producers extends to the replacement of most imported fish into Australia and a proportion of wild caught fish sourced from Australia. Therefore, based on ABS data for 1998/99 (ABS, 2000), the potential market in Australia for ornamental fish production aimed at import replacement would be approximately 7.5 million fish per annum valued at $2.1 million FOB. As noted previously, the value of these fish would in fact much higher, with Lee (1991) indicating that the post quarantine value for imported fish is an additional 130%. The true potential farm gate market value is therefore likely to be in the order of $3 million annually. An examination of the assessments provided in Chapter 5 (Marketing) and Chapter 6 (Production) enables an overall ranking of the potential of the species groups. In this ranking, equal weighting has been given to the Marketing and Production Assessments.
Table 6.1 –Overall ranking based on marketing and production assessments
Species Grouping Cichlids Catfish Common goldfish Fancy goldfish Koi carp Gouramis Livebearers Tetras Barbs Walking fish Rainbows Saratoga Other natives Native advanced juveniles Market C C B A C B A C C C B A C C Production C C A B A B A C A B B B C A Overall * 6 6 2 2 3 4 1 6 3 5 4 2 6 3

Note : any “A” places that group higher than other groups which didn’t score an “A”, thus an “A” + “C” is higher than “B” + “B”.

Based on this assessment (species groupings with overall ratings of 1, 2 or 3), the most appropriate species groups for the GIAG would be: • • • • • live bearers for local and interstate markets; common goldfish for local markets; fancy goldfish for local and interstate markets; saratoga for local, interstate and export markets; koi carp for local and interstate markets;
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• barbs for local and interstate markets; and • native advanced juveniles for local markets. Recommendation: GIAG members select at least three of these groups for initial development. African cichlids may be a candidate group to consider for production as GIAG gains experience (these are not fish which should be cultured by beginners). The water quality (ie. hard water) of the Gascoyne bore water is likely to be similar to that of the natural environment of African cichlids. These species may also have an export market. At present Germany is one of the largest producers of these fish, but they are very expensive. If cheaper alternatives were made available there may be a market opportunity for them, in particular several potential customers indicated that they would like to purchase African cichlids from within Australia. Recommendation: Once experience has been gained in growing ornamental fish, GIAG members consider the culture and marketing of African cichlids.

6.2

Cooperative marketing

Rowland & Cox (1999) point out the benefits of producers forming cooperative groups to aid in the marketing of fish, increase purchasing power, or provide services to members. Cooperatives are widely practised in all forms of business. With respect to the GIAG, a cooperative would increase the range that could be supplied to the wholesalers, thereby increasing the reliance of customers on GIAG. A cooperative can also act as a pool for resources and capital items – ie. a central packing station could be established. Likewise, a central hatchery could be operated by one member who could supply fry to several growers, which would minimise the need for duplicating systems and capital items as well as reducing costs. It is important to establish and maintain quality and operating standards (Rowland & Cox, 1999). There is often an informal trial period imposed on suppliers, with customers purchasing several small test shipments to ascertain quality and potential problems (Rowland & Cox, 1999). This can also allow producers to finetune packaging and transportation methods to optimise the packing density, survival and quality of fish. If supplies are inconsistent in quality, even due to poor quality fish from only one supplier, the whole cooperative will gain a bad reputation. Inevitably, this would reduce sales and potential sales. Recommendation: GIAG should expand its field of activities to cooperative buying and marketing. Recommendation: GIAG specialisation into discrete phases of the culture process by members should be encouraged. Recommendation: GIAG should develop and implement an appropriate quality assurance plan for the industry. Recommendation: Opportunities to include other aquaculturists in the region should be acted upon.

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6.3

Positioning Strategy

The strengths and competitive factors of GIAG can be highlighted by a positioning strategy based on promoting their product at four levels: 1. Emphasis on 'Australian origin’ where fish are produced in a disease free, high technology, isolated environment. 2. Fish provided are a ‘premium quality’ product with excellent health (‘disease-free’ certification) and low mortality. 3. ‘Credibility’ for delivery of a high quality service (ie. consistent, regular supply and fast response). 4. Production of a wide selection of varieties/species for buyers to choose from. These points are discussed in more detail below.
6.3.1 ‘Australian origin’

A major source of concern to tropical fish wholesalers and importers is the variable quality of fish on arrival in Australia. As well as receiving fish of poor colouring or often poor condition generally, mortalities may be as high as 100 per cent for any batch of fish (R. Datodi, Aquarium Industries, pers. comm., 1992). This lack of quality of imported fish, in conjunction with the increasing quality of Australian produced fish, has meant that many Australian importers have a preference for buying Australian produced fish when quality and value are at least similar or superior to that of imported fish (R. Datodi, Aquarium Industries, pers. comm., 1992). Bassleer (1994) also cites the local demand for high quality ornamental fish as an opportunity for domestic producers in western countries. This continuing demand for competitively priced, high quality ornamental fish by Australian wholesalers is a driving force in the expansion of the production capacity of Australian farmers. Currently the demand for Australian produced fish exceeds demand. Willis (1995) reported that to date there has been little differentiation of ornamental fish in Australia based on the origin of the fish, ie. whether they are produced in Australia or imported (in fact, most producers have paid little attention to the marketing of ornamental fish). The importance of the origin of fish as a point for differentiation is expected to increase, due to the growing concerns over importation of exotic diseases with imported fish.
6.3.2 ‘Premium quality’

An integral part of this strategy is product quality, with the disease status and general health of the fish being important product attributes. It is anticipated that by maintaining a rigorous disease control program and strict quarantine of new stock that certification attesting to the absence of exotic diseases could be attained. At present very few farms in Australia have been accredited with this certification, Willis (1995) indicating that only 25 per cent of farms are currently undergoing any form of formal disease monitoring. This certification will reflect the high quality of the product and the longer life expectancy of fish relative to competitors' products. The poor quality of many imported fish is generally the result of transportation stress and/or disease. Diseases are common in such fish and are a major cause of mortality in the industry (Humphrey, 1989; Treadwell et al., 1992). This disease aspect is also of great importance to the rest of the aquaculture industry, as well as commercial and recreational fisheries in Australia. Given the high numbers of ornamental fish currently imported into Australia, there is the possibility of introducing diseases from overseas to Australian stocks (Humphrey, 1989). This threat resulted in the imposition of the current
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quarantine system (Schmidt & Love, 1985). Treadwell et al. (1992) indicate that Australian stocks of ornamental species are relatively free of such diseases, and may offer significant competitive advantage over imported stocks. This is confirmed by the industry survey results, and highlights the opportunity that Australian producers have for replacing imported fish. The use of some form of quality accreditation (such as HACCP, ISO, QA) has been discussed by several producers as being a possible point of differentiation. This has been previously mentioned in the report and interest is growing into its use and implementation throughout the world. The Singapore government has introduced quality assurance accreditation for all exporters operating out of Singapore (Fernando & Phang, 1994). Exporters have strict quality control guidelines for aspects of fish management, disease management, harvesting, packaging, and transport of fish in order to maintain high standards throughout the industry. Such accreditation systems also give buyers some form of evidence as to the quality of fish. At present no producers have any form of accreditation in Australia, although several producers are certified as being free of Goldfish Ulcer Disease (Viv Causby, Tasmanian Inland Fisheries Commission, pers. comm., 2000).
6.3.3 ‘Credibility’

A major problem new entrants face in any industry is that of credibility (Hutt & Speh, 1995). Due to the growing interest in production of ornamental fish over the past 10 to 15 years, wholesalers are constantly being approached by potential breeders stating that they will produce large numbers of high quality fish, with the majority failing to deliver on such claims (Rick Datodi, Aquarium Industries, pers. comm., 2000). Therefore, most wholesalers tend to view new entrants in a ‘bad light’, with producers needing to prove that they can produce a quality product, reliably and consistently, to develop some credibility. This has been a major problem encountered in trying to gather market information, many operators are either very guarded with market information or do not wish to help new entrants as they are perceived to have little credibility. One method that can be used to establish credibility by a new entrant is to not approach potential customers until there is sufficient product available, then offering free samples of fish (one consignment consisting of, say, 10 to 20 of each variety of fish available). By providing sample fish some degree of credibility is immediately established, as the samples are evidence of the producer's capacity to grow a quality product. New entrants should also avoid promising to supply large numbers of fish if these commitments cannot be met. If the GIAG sets up a cooperative, the above approach should be applied to all members.
6.3.4 Wide selection

The cooperative approach of GIAG can allow the production of a wide selection of varieties/species from buyers can choose. Recommendation: GIAG promote a wide selection of products as ‘Australian-made’, quality assured’, and ‘disease-free’ certified. Recommendation: GIAG should ensure all dealings with clients aim to establish and maintain credibility. Recommendation: GIAG should aim to position itself at the ‘premium quality’ end of the market.

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6.4

Pricing

Competitive level pricing strategies are common in business markets (Hutt & Speh, 1995) where other aspects of the marketing mix such as product quality, customer service and distribution become important in differentiating the product (Stanton et al., 1994; Hutt & Speh, 1995). In adopting a pricing strategy relative to the competition, a firm may choose to price its product at the same price as the competition (ie. the ‘goingrate’), at a higher price than the competition (ie. above-competition) or at a lower price than the competition (ie. below-competition) (Kotler et al., 1983). Such competition-based pricing strategies are particularly common in oligopolistic industries (such as the ornamental fish industry in Australia) where competitive advantage is then based on other aspects of the marketing mix (Mansfield, 1988). Mansfield (1988) suggests that prices in oligopolistic industries are generally determined by a price leader. In the case of the ornamental fish market in Australia, the price leader is imported fish, with Australian producers generally accepting the going-rate price (ie. the average market price) established by the true cost of imported fish, including freight costs, quarantine costs, duties etc. (see SECTION 5). This competitive level pricing is also characteristic in the ornamental fish industry in general, with prices usually set by the real cost of imports. GIAG should use a competitive pricing strategy by adopting a going-rate pricing policy (ie. accepting prices dictated by real cost of imports) because: 1. Competition with other producers will be based on other aspects of the marketing mix (ie. product quality and customer service); 2. Going-rate pricing maximises profit by setting as high a price as possible, which is important initially to maintain cash flow; and 3. It promotes the value of GIAG products in the market (ie. high quality for reasonable price). If unrealistically high prices are set (compared to the current market prices) market share is likely to be lost to lower-priced competitors as demand is elastic for ornamental fish. However, it should be remembered that prices set by wholesalers and pet shops generally account for a certain percentage of mortalities (often as high as 30 per cent). Therefore, if wholesalers and pet shops can purchase fish with a consistently lower mortality, they will have a higher profit margin and higher purchase prices could therefore be justified. Recommendation: GIAG should adopt a ‘going-rate’ pricing policy (ie. accepting prices dictated by real cost of imports).

6.5

Packing and Transportation

The packing and packaging of ornamental fish is very important and plays a significant role in the quality of fish on arrival to wholesaler-customers. If fish are not suitably packaged they will become stressed and most likely die during transport or shortly afterwards. Therefore fish must be packaged in a way that reduces stress and provides an environment that allows fish to arrive at their destination in a healthy state. Generally there are three modes of transportation methods available to producers of ornamental fish to distribute their product viz. road, rail, and airfreight or a combination of the three. As ornamental fish are highly perishable, efficient transport (ie. timely and reliable) is essential for ensuring fish arrive at their destination in the shortest time possible. Therefore airfreight is generally the preferred mode of transport (Brown & Gratzek, 1982). Recommendation: GIAG members should utilise packing, packaging methods & materials, and mode of transport, that ensure maintenance of product quality.
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6.6

Distribution

Transport and warehousing of agricultural products are very important aspects in the effectiveness and efficiency of distribution (Stanton et al., 1994). This particularly applies to ornamental fish as the distribution will affect the producers' ability to service clients in a satisfactory way. Wholesalers in Australia have established well-developed networks for the distribution of ornamental fish. As these networks are already well established, the most cost effective method of distribution for ornamental fish producers is to operate in this two-level channel because of: 1. The complex and costly distribution network that an ornamental fish producer would need to operate in a one-level channel which directly supplies retail pet shops; and 2. The product assortment that wholesalers are able to offer retailers being far broader than what an ornamental fish producer can offer. A major constraint to the distribution of both agricultural products and, in particular ornamental fish, is warehousing. In the case of ornamental fish, the producer and wholesaler cannot afford to maintain ornamental fish in a warehouse situation because: 1. The product is highly perishable; 2. Warehouse facilities for live ornamental fish are very capital intensive (ie. must have tank systems, climate control, etc); 3. The operating cost needed to maintain the fish while in the warehouse (ie. water quality control, feeding, general maintenance, etc.) is high; and 4. The product will change with time in the warehouse (ie. fish continue to grow). Therefore, wholesalers normally maintain minimal inventories and often adopt a form of 'just in time' inventory, where low inventory levels are maintained and new stock are ordered just before a product runs out. For similar reasons pet shops also adopt a just in time inventory strategy, and need a reliable supply from wholesalers. Wholesalers therefore require regular shipments of fish, usually weekly or fortnightly, to maintain their stocks of fish for retail pet shops. Consequently wholesalers generally maintain an inventory of fish to last for one to two weeks and production by producers, both domestic and overseas, must be geared to suit this demand. Reliability of supply and delivery from producers is therefore very important to potential wholesale-customers. Recommendation: GIAG members should sell product directly to wholesalers on a regular basis.

6.7

Promotion

The promotional effort of ornamental fish producers in Australia has been very poor to date and is virtually nonexistent in the industry. This is typical in primary industries where individual promotion of their products is rare; rather larger industry based organisations are generally relied on for product promotion. An example of this is the Australian Dairy Corporation, which is responsible for promotion of all dairy products in Australia. However, in the case of GIAG the farm product is a consumer product rather than a commodity product, and consequently promotion is likely to be useful in increasing sales. An important part of the promotion function for business markets is personal selling, which is typically used in the Australian ornamental fish industry. In fact, most Australian producers rely solely on personal selling for the promotion of their fish. Personal selling will also play an important role in the promotional mix of GIAG, in both the initial and subsequently product launch and promotion strategies. It is important that those responsible for sales are able to convey a high degree of technical information, such as water quality,
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disease aspects, fish physiology and behaviour, effectively and efficiently to wholesaler-customers. This information will play a role in the wholesaler-customers' ability to maintain GIAG fish in good health (and thus quality) for distribution to pet shops. As the production capacity of GIAG is not likely to be large enough to justify dedicated sales staff, the sales function will need to be performed by the owner/manager. Although other forms of promotion, such as advertising, sales promotion and publicity, have been largely ignored by ornamental fish producers in Australia, these promotional activities will play an important role in the marketing of GIAG fish. As a primary producer GIAG can aim this promotional effort at three different levels within the marketing channel, viz: 1. Wholesalers; 2. Retailers; and 3. Consumers. By making other members of the distribution chain (ie. retailers and consumers) aware of their product through advertising in trade magazines, newspapers and the like, GIAG can increase demand for its product from retailers and consumers. Therefore wholesalers will buy more because the retailers and consumers want more. This is a ‘pull strategy’. By aiming promotional activities at each of the levels outlined above, GIAG will be utilising a 'push-pull' promotion strategy. This push-pull promotion strategy will need to: 1. Create a quality product and customer service image; 2. Stimulate and maintain sales to wholesale-customers; and 3. Create awareness of GIAG and its product among pet shop owner/managers and consumers. However, the success of any promotional activity will rest on the ability to differentiate GIAG product from that of its competitors. Thus GIAG promotional strategy should be based on the positioning strategy (see Section 7.3), which focuses on the following points: 1. 'Australian-made', ie. fish are produced in a disease free, high technology, isolated environment; 2. Fish are a ‘premium quality’ product with excellent health (‘disease-free’ certification) and low mortality; 3. ‘Credibility’ for delivery of a high quality service (ie consistent, regular supply and fast response); and 4. Produce of a wide selection of varieties/species for buyers to choose from. The differentiation of GIAG product at the retail level will be difficult to achieve, since the product will be similar to that of other producers. Unlike most consumer items that use packaging to distinguish products, it is very difficult to provide distinguishing features in the case of ornamental fish. Developing some form of brand identity for GIAG product, which endures through the distribution chain to the consumers, is a challenge. This could be achieved by using a logo and brand name. Marking of fish with dyes, fin-tags, and/or fin clipping is not practical due to both the increased production costs and the likelihood of detracting from the aesthetic value of the fish. More practical methods of differentiating GIAG fish may include the use of: 1. Specially marked/designed tanks by GIAG for pet shops; 2. Signs and/or stickers for pet shop managers to display on tanks containing GIAG fish;

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3. Leaflets and flyers with each GIAG fish sold, with information on unpacking fish, care of fish and the benefits of purchasing Australian produced fish, and in particular GIAG fish, over imports; and/or 4. Specially marked bags with similar unpacking and maintenance instructions. The net benefits to be derived through the use of promotional tools such as these, must account for the costs involved and the degree of penetration into the market. The first two methods involve differentiating the product based on the display tank used. Since there are approximately 3,000 retail pet shops in Australia (O'Sullivan, 1991), providing display tanks would be an expensive option (at approximately $100 each, it could cost $300,000 to supply display tanks to all potential wholesaler-customers). Although the provision of signs is a cheaper alternative to providing display tanks, GIAG has little control over their use by retailers who may place other inferior fish in them, thus negatively impacting on the positioning strategy for GIAG product. By providing literature and/or branded plastic bags (for re-packing fish) with stock, GIAG may exert a greater degree of control over the distribution and therefore success of the promotional strategy. By GIAG limiting the amount of material provided to pet shops in-line with the number of fish purchased by pet shops, it is less likely that other fish will be substituted for those of GIAG. This strategy is also less expensive to implement, and is less likely to be abused by pet shops. However, this approach does rely on wholesalers providing the appropriate number of GIAG bags and/or flyers when distributing GIAG stock to pet shops. To ensure that this occurs, it may be possible to include the distribution of promotional material in the conditions of sale, thus legally obligating wholesalers to perform this function. Wholesalers would be obligated to ensure that their customers (ie. retailers) receive the appropriate amount of promotional materials with the stock. Recommendation: GIAG members should undertake personal selling directly to the wholesalers and major retailers using the positioning strategy. Recommendation: GIAG should develop a logo and brand name to provide market definition through the marketing chain.

6.8

Establishing export markets
• quality and price must be at least equivalent to those of major exporting countries; • supply must be stable and consistent; • to avoid price competition it is necessary to develop new breeds or lines of fish, preferably ones not yet imported by Japan; and • establish and cultivate a relationship with one importer to develop the market.

Jetro (1997) notes the following factors for entering the Japanese market:

Some of these recommendations were also given by Treadwell et al. (1992) and Lee (1991) who cited the ability to supply competitively priced, consistent, large shipments of ornamental fish as essential for establishing and maintaining export markets. At present, few farms are able to do this and the current industry structure may need to change in order to achieve this objective (Treadwell et al., 1992). The industry survey indicates that 14 per cent of farms in 1994 - 95 were exporting native species of fish. It is expected that the number of farms exporting fish will

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continue to grow, largely due to the opportunities open for the production of Australian native fish for export markets (Lee, 1991). Since consignment volumes for export markets are generally large, Australian producers are often unable to satisfy orders as individually. A co-operative approach to marketing, which may include other producers in the region as well as other producers in Australia, may alleviate problems associated with consistency of supply. Co-operative marketing with existing exporters may also provide a ‘soft option’ for GIAG to enter export markets. Recommendation: Co-operative marketing with other producers and particularly established exporters will assist GIAG in entering export markets.

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7.

Action Plan

7.1

The GIAG Vision - Is It Feasible?

In Section 3 the vision for GIAG was quoted as follows.

The vision for the Group is to: - use the challenge of geographically isolated aquaculture to improve the productivity of the region and revitalise the regional economy, and - produce a non-climate dependent, product, based on secure artesian water use, which meets global demand. The strategic business planning process identified ornamental fish production as the most suitable aquaculture option for pastoralists as initial capital outlays were minimal and a low skill level was required to successfully produce most species.

The vision and the choice of the production of aquarium fish resulted from several studies. This was supported by a number of factors that are discussed in Chapter 3. The production and marketing aspects of 13 different ornamental fish species groupings as well as native food fish advanced juveniles were assessed in detail. The most appropriate species groups and their target markets were identified to be: • • • • • • • live bearers for local and interstate markets; common goldfish for local markets; fancy goldfish for local and interstate markets (main); Saratoga for local, interstate and export markets; koi carp for local markets; barbs for local markets; and Native advanced juveniles for local markets.

This report confirms that potential exists for the marketing of several species groupings that could be cultured by GIAG members. While the emphasis of this assessment has focussed on the marketing issues, a range of production issues have also been considered due to their impact on future marketing strategies.

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7.2

Key Marketing Steps

Based on a thorough investigation of potential markets for ornamentals and advanced juveniles, this report has provided a number of marketing recommendations for the GIAG. These recommendations can be ranked in order of importance: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. Expansion of GIAG’s field of activities to include cooperative buying and marketing. Opportunities to include other aquaculturists in the region should be acted upon Selection of at least three of these species groups for development. Specialisation into discrete phases of the culture process by members can be encouraged. Development and implementation of an appropriate quality assurance plan. . Undertaking of personal selling directly to the wholesalers and major retailers using the positioning strategy. Promotion of a wide selection of products as ‘Australian-made’, ’quality assured’, and ‘diseasefree’ certified. Ensuring all dealings with clients aim to establish and maintain credibility. Positioning of the produce at the ‘premium quality’ end of the market. Adoption of a ‘going-rate’ pricing policy (ie. accepting prices dictated by real cost of imports). Utilisation of packing and packaging methods and materials which ensure maintenance of product quality. Shipping of produce directly to wholesalers on a regular basis. Development of a logo and brand name to provide market definition through the marketing chain.

Since any future production by the GIAG will be difficult to differentiate from other products, it is likely that any marketing approach for GIAG will need rely heavily on its positioning strategy. This strategy could be based on positioning GIAG as an innovative producer of a premium quality Australian product that offers excellent customer service. Pricing strategies in the ornamental fish industry are largely competition-based strategies, with prices generally set by the real cost of imported fish. As such the GIAG should utilise competition based pricing and initially accept the going rate for its product.

7.3

Critical Pathway

The question as to whether the production by GIAG members is viable (ie. profitable) cannot be assessed without the appropriate financial analyses, business plan, farm designs and specifications, environmental impact assessment, and so on. These are all steps in the Critical Pathway (Figure 8.1). The Project Definition and Scoping period has already been completed with the following outcomes: • • • • • pond or tank-based culture of ornamental fish and/or native food fish advanced juveniles; artesian water sources; hatchery & nursery culture of ornamentals and / or ongrowing native food fish advanced juveniles; small scale (part time) possibly moving up to medium scale; and cooperative production & marketing.

Some of the technical/climatic, political/regulatory, marketing and financial issues have been addressed as part of the Risk Assessment process. Likewise with the preliminary marketing investigations of the
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Feasibility Study. The remainder of the Feasibility Study would need to be completed as this will allow the GIAG to determine if they should proceed further. The members will need to consider the each of the specific issues associated with the potential project (such as sites selection, species selection, staffing and specialists requirements, suitable technologies, infrastructure requirements, farm design and production capacity etc.) and make firm decisions about these issues. At the same time the GIAG should develop a database of various specifications, costs, expenditures, revenues, assumptions, estimates and fall-back positions. This will allow a preliminary financial analysis to be undertaken. This can normally be presented in the form of a spread sheet Cash Flow Analysis, covering a period of 5 to 10 years. A sensitivity analysis should be performed, involving different combinations of operating costs, growth rates, market prices, survival rates, etc. to evaluate their effects on profit and cash flow. Conservative figures should always be used. The next two major tasks (Environmental Impact Assessment and Business Plan) need to be undertaken concurrently, since they are inter-linked. All aquaculture operations impact on the environment in some way, and many of the regulations and permits required are designed to ensure that these impacts are minimised. Proponents may be required by Government authorities to undertake an Environmental Impact Assessment (EIS) before proceeding. However, irrespective of the regulatory requirements, aquaculturists should prepare appropriate environmental management plans to ensure that they do not adversely impact on the environment, and where interactions are expected to occur, they establish procedures to ameliorate any impacts. Environmental management plans may be specifically developed for a farm, or modified from an industry Code of Practice. The Environmental Management Plan and other findings from the Feasibility Study can then be used in the Business Plan, which should incorporate three primary strategies: ♦ Production Strategy (details how the farm is set up and run); ♦ Marketing Strategy (details how the product is harvested, processed and sold); and ♦ Financial Strategy (details how the money goes out and how it comes in). This document must be detailed and provide all of the information that may be required by the various government agencies to issue the required licences and permits. It should also be prepared in a such a way as to be a suitable document to present to potential financiers. It is also prudent that the assumptions and estimates used in the Business Plan are tested. Typically, this involves the establishment of a small ‘Pilot’ Operation prior to full commercialisation. The pilot project could be conducted over a period of one to two years, since in the case of ornamental production two or more crops could be produced over this time. During this phase, the expected outcomes for each of the primary business strategies and the various operational plans could be confirmed. Any significant deviations could then be accounted for prior to commercialisation.

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Figure 7.1. Critical Pathway For Successful Development

Source : PSM Group Pty Ltd

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8.

REFERENCES

ABARE. 2000. Australian Fisheries Statistics 1999. Australian Bureau of Agricultural & Resource Economics, Canberra, p. 60. Agnet. 1993. An overview of the ornamental aquatics sector in Sri Lanka. Agnet consultant report No. 01, p. 32. Allen, G. 1995. Rainbowfishes – In nature and the aquarium. Tetra-Verlag, Germany, p. 180. Andrews, C. 1992. The Ornamental Fish Trade and Fish Conservation. Infofish International, 2/92, pp: 25 -29. Anon. 1999. Report to Farmers. Aquaculture Production Survey Queensland 1997-98. Queensland DPI. Aquanic. 2000. Quick tip sheets for commonly culture food, bait, sport and ornamental fish species. Website: http://ag.ansc.purdue.edu/aquanic/publicat/state/il-in/species.htm. Bassleer, G. 1994. The international Trade in Aquarium/Ornamental Fish. Infofish International, 5/1994, pp: 15-17. Brown, E. E. and Gratzek, J. B. 1982. Fish Farming Handbook. AVI Publishing Company, pp: 163-205. Chapman, F.A., Fitz-Coy, S.A., Thunberg, E.M. and Adams, C.M. 1997. United States of America Trade in Ornamental Fish. Journal of the World Aquaculture Society, Vol. 28 (1): 1-10. Cheong, L. 1998. An overview of the current international trade in ornamental fish, with special reference to Singapore, pp: 445-481. Cole, B., Tamaru, S., Bailey, R., Brown, C. and Ako, H. 1999. Shipping practices in the ornamental fish industry. Centre for Tropical and Subtropical Aquaculture, Hawaii. Manual #131, p. 21. Cole, B. and Haring, M. 1999. Spawning and production of the Serpae Tetra, Hyphessobrycon serpae. Centre for Tropical and Subtropical Aquaculture, Hawaii. Manual #138, p. 12. Davenport, K. 1996. Characteristics of the current trade in ornamental fish, with special reference to the European Union. Rev. sci. tech. Off. Int. Epiz., Vol 15(2): 435-443. FAO. 1995. Review of food fish supplies. In: Conference on the Sustainable Contribution of Fisheries to Food Security, Kyoto (Japan). FAO. 1999a. Ornamental aquatic life: what’s FAO got to do with it? Website: http://www.fao.com/ FAO. 1999b. Aquaculture Production Statistics 1988-1997. FAO Fisheries Circular No. 815, Rev. 11, 203 pp. FAO. 1999c. State of World Fisheries and Aquaculture, 1998, FAO, Rome. Website: http://www.fao.com/. Fernando, A. and Phang, P. 1994. Freshwater Ornamental Fish Aquaculture in Singapore. Singapore Polytechnic, Republic of Singapore, 123 pp.
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Forteath, G.N.R. 1993. Transportation of Live Fish. AustAsia Aquaculture, Vol. 7(5): 51-55. Hopper, L. 1996. Reproductive strategies and tactics of the family Cichlidae (Teleostei). M. App. Sc. Thesis, University of Tasmania, Launceston. Humphrey, J.D. 1989. Extensive livestock industries – the fish industry. Australian Veterinary Journal, Vol. 66 (20): 411-415. Hutt, M.D. and Speh, T.W. 1995. Business marketing management. A strategic view of industrial and organisational markets. Dryden Press, USA. Ingram, M. 1987. The Lure of the Other Market. Fish Farmer, May-June issue, pp 17 - 18. Jetro, 1997. Market survey on tropical aquarium in Japan. No. 1619, p. 28. Jetro, 1999. Ornamental Fish Markert Report, pp: 652-657. Kaiser, H. and Vine, P. 1997. A comparison of growth, survival rate, and number of marketable fish produced of swordtails, Xiphophorus helleris Heckel (Family Poeciliidae), between two types of culture systems. Aquaculture Research, Vol. 28: 215-221. Kaiser, H., Britz, P., Endeman, F., Haschick, R., Jones, C., Koranteng, B., Kruger, D., Lockyear, J., Oellermann, L., Olivier, A., Rouhani, Q. and Hecht, T. 1997. Development of technology for ornamental fish aquaculture in South Africa. South African Journal of Science, 93: 351 - 354. Kotler, P., Shaw, R., Fitzroy, P. and Chandler, P. 1983. Marketing in Australia. Prentice Hall, Australia, p. 626. Lam, T.J., 1983. Environmental influences on gonadal activity in fish. In: Hoar, W.S., Randall, D.J. and Donaldson, E.M. (eds), Fish Physiology volume IX part B. Academic Press Inc. Lee, C. 1991. Aquarium Fish have Market Potential. Austasia Aquaculture Magazine, Vol. 5, No. 6, Feb. Leggett, R. and Merrick, J. 1987. Australian native fishes for aquariums. J.R. Merrick Publications, Artarmon, NSW, p. 241. McInenry, D. and Gerrard, G. 1989. All about tropical fish. Hutchinson Australia, Singapore, p. 480. McKay, R. and Wharton, J. 1992. A preliminary analysis of ornamental fish importation - Brisbane 1985 to 1991. no place of publication given. Mangosi, S. 1992. Contribution of the pet care industry to the Australian economy. BIS Shrapnel Pty Ltd, Sydney, 33 pp. Mansfield, E. 1988. Micro-economics - Theory and Applications. W.W. Norton & Company Inc. USA, p. 600. OFI. 2000. OFI Journal. Official Publication of Ornamental Fish International.

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Olivier, A. and Kaiser, H. 1997. A comparison of growth, survival rate, and number of marketable fish produced of swordtails, Xiphophorus helleri Heckel (Family Poeciliidae), between two types of culture systems. Aquaculture Research, Vol. 2: 215-221. O'Sullivan, D. 1991. Status of Aquaculture in Australia. Austasia Aquaculture Magazine, .

O'Sullivan, D. 1998. Status of Australian aquaculture in 1996/97. Austasia Aquaculture Trade Directory 1998, Turtle Press, Hobart, Tasmania, pp: 2-14. O’Sullivan, D. 2000. Murray cod potential and problems highlighted. Austasia Aquaculture, 14.3, Apr/May 2000, in press. O'Sullivan, D. and Roberts, N. 1999. Status of Australian Aquaculture in 1997/98. Austasia Aquaculture Trade Directory 1999, Turtle Press, Hobart, Tasmania, pages 14-28. Patrick, J. 1999. Paper delivered at the World Aquaculture Society Congress, Sydney, Australia, April 1999. Penzes, B. and Tolg, I. 1986. Goldfish and ornamental carp. Barrons Educational Series Inc. PIJAC. 1997. Code of Practice for Members. Pet Industry Joint Advisory Council of Australia, Sydney, 1 p. PIJAC. 2000. US ornamental aquarium industry. Website: http://www2.pijac.org/PJF001.htm. PSM. 1999. Ornamental Fish Exposure Pathways. Report prepared by PSM Group for the Australian Quarantine Inspection Service, Canberra. Rowland, L. and Cox, L. 1999. Opportunities in ornamental aquaculture. Pacific Business Center University of Hawaii, p. 35. Schimdt, M.E. and Love, M.D. 1985. The Australian quarantine system for live ornamental fish. Queensland Agricultural Journal, Jan-Feb issue, pp: 29 - 30. Shariff, M. and Subasinghe, R. 1992. Aquarium Fish Health Management. INFOFISH International, Vol. 6: 43-47. Sojka, J., 1999. Czech Republic. One hundred years of aquatics. www.ornamental-fish-int.org/data/htm Stanton, W.J., Etzel, M.J. and Walker, B.J. 1994. Fundamentals of marketing. McGraw-Hill, New York. Teo, L.H., Chen, T.W. and Lee, B.H. 1989. Packaging of the guppy, Poecilia reticulata, for air transport in a closed system. Aquaculture, vol 78: 321 - 332. Thorne, T. and Hickton, S. 1999. Ornamental Fish – An Aquaculture Opportunity. Fisheries Western Australia, Perth, 48 pp. Treadwell, R., McKelvie, L. and Maguire, G.B. 1992. Potential for Australian Aquaculture. ABARE Research Report 92.2. ABARE, Canberra.

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Willis, S. 1995. Bioeconomics in Aquaculture - Preliminary Analysis of the Culture Potential of the Freshwater Angelfish - Pterophyllum scalare. Master of Science thesis, University of Tasmania, 256 pp. Willis, S. 1996. The Ornamental Fish Market in Australia. Unpublished data from internal marketing analysis for Tasmanian Ornamental Fish Farm, 24 pp. Willis, S. 1999a. Production of rainbowfish in indoor recirculating systems. ANGFA 1999 Annual Conference, October 20 –22, Canberra. Willis, S. 1999b. Production of Ornamental Fish in Indoor Recirculating Systems. Paper delivered at the World Aquaculture Society Congress, Sydney, Australia, April 1999. Winfree, RA. 1989. Tropical Fish. World Aquaculture, Vol 20, No 3, Sep.

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9.

CONTACTS
Company Aquatic Solutions Liverpool Aquariums Monaco Aquariums Petras Enterprises St George Aquarium Pty Ltd Bar A Mal Fish S & L Aquariums Aquarium Industries MAS Imports Melbourne Tropical Fish Imports Petland Petshop All Pet Products Amazon Aquarium Clearview Aquarium Emperor Marine Aquariums Exotic Tropical Fish Fish Place Freeman Aquarium Supplies Living Pictures Manta Marine Aquariums Perth Aquarium & Display Seaview Aquariums The Fish Gallery Pet Supplies Veba's Aquarium Supplies Address 75b Rookwood Road 288 Macquarie Street 121 Railway Parade 9 Bangor Road 625 Princes Highway 9A Waddike Rd 14 Indora Avenue 68 Chifley Drive 15-17 Roosevelt Street 41-43 Sinclair Rd 236 Planet Street Unit 1/10 Stanford Way 21 Wellard Street Rockingham Road 375 Oxford Street Cnr Welshpool & Lewis Rds 58 Ravenscroft Way 31 Rochester Way 447A Reservoir Road Carson Road 1234 Albany Highway Wanneroo Rd Buckingham Drive Zeta Crescent RMB 4873 Popran Rd 446 Corndale Rd Redpath Bull Hill Rd Lot 11 Jersey Road Lot 9 Brolen Way Lot 16 Argyle Street 45 Henderson St 88 Porters Road 435 Kingsway 63 Lake Innes Drive Lot 5 Blackhead Rd Old Wagga Road Farm 609 Edon St Pacific Hwy PO Box 86 1 Perina Road 752 George Street 91 Greendale Rd Suburb, State Yagoona, NSW Liverpool, NSW Canley Vale, NSW Middle Dural, NSW Rockdale, NSW Lonsdale, SA Ingle Farm, SA Preston, Vic North Coburg, Vic Dandenong, Vic Welshpool, WA Malaga, WA Bibra Lake, WA Hamilton, WA Mt Hawthorn, WA Wattle Grove, WA Westfield, WA Meadowsprings, WA Orange Grove, WA Malaga, WA Cannington, WA Balcatta, WA Wangara, WA O'Connor, WA Lower Mangrove, NSW Corndale, NSW Mt Russell, NSW Tinonee, NSW Bringelly, NSW Cecil Park, NSW Barrington, NSW Inverell, NSW Kenthurst, NSW Caringbah, NSW Wauchope, NSW Hallidays Pt, NSW Grong Grong, NSW Yanco, NSW Bonville, NSW Bangalow, NSW Gosford, NSW Windsor South, NSW Bringelly, NSW

Name Retail/Wholesale

Rick Datodi

Brent Worsely

Derek Hall

Producers Alan Andresson J & M Atkinson Don Attwood Mr & Mrs Baldock Hans Boehner Charles Bower

Redpath Australian Koi Farm Fairfield Fish Hatcheries Bowman Aquatics Carcary Pty Ltd Kenthurst Koi Farm

Colin Chaloner John Garvin J & C Gorton Bruce Malcolm A & M Marshall Mr W.J. Reakes Soo Man Heng Mr P. Tricker

Hallidays Point Fish Farm Uarah Fisheries Pine Creek Fish Hatchery Aus-Sino South Windsor Fish Hatchery

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Name Company Wyong Creek Fish Hatchery Territory tropical Fish Suppliers Top End Tropical Fish Supplies Australian Native Fish Breeders J. Belbin & J. Koar Dr Rick Braley Gordon Hides S. Lai & N. Koh D. Liddle K. McCubbin A. McLean Bruce Sambell Alfons Thewes Bruce Wimpenny R&C Gee Greg Willis Brian & Trish Pablo & Ingrid Manny & Linda Vella Bae Pyeong Braden Beng W. Brown David Cliff John Cole Gary Devreux Nathan Ellard G Erickson D & S Guy Paul Harrison Cameron Hoffman W Chapmen/C Holker MarkJohnston Betta Barra Tropical Fish Aqua Search G&D Discus Breeders Wildgrove Pty Ltd Address RMB 1172 GPO Box 3552 Lot 11 73B Gulnare Rd 28 - 36 Tarana Avenue 16 Dunbar Street PO Box 31 MS 1318 6-10 Elena St 1135 New Cleveland Road Lot 1 Bruce Hwy Lot 15 Teys Road PO Box 794 PO Box 324 28 Cooinda Crescent 34 Pitt Road PO Box 324 PO Box 4 PO Box 2001 Lot 13 Spanner Rd 10 Denmead Avenue Lower Beulah Rd 2b/156 St Leonards Rd PO Box 33 RSD H1569 H308 Andrews Drive 55 Brownbill Rd Anna Plains Station 828 Forrest Rd 27 Cross St PO Box 48 Lot 5 Beenyup Rd 119 Birkett St Silver perch hatchery and grower Willgrays Yabby Depot Silver perch hatchery Woodvale Fish & Lily Farm Byford Aquatics Kimberly Aquarium Enterprises Koi and Goldfish Breeding Farm L. Moverly Redland Bay Pty Ltd Sum Fin Fishy Stanley Townsend Carl Tritton DG & JL Watts Western Australia Nishikigoi Farm Rio Aquaria The Fish Room T & M Randell PO Box 31 Lot 2 Great Eastern Highway Woodvale Drive Doley Road PO Box 816 PO Box 816 290 Arthur Street 15 Michel Crescent PO Box 1610 PO Box 233 215 Sydney Rd 10 Hughes St PO Box 119 Armadale Road 60 Tasman Road 18 Fermaner Street 3 Tallangatta Place Suburb, State Wyong Creek, NSW Darwin, NT Bees Creek, NT Thagoona, Qld Cairns, Qld Silkwood East, Qld Yungaburra, Qld Magnetic Island, Qld Gurndale, Qld Howard, Qld Wolmview, Qld Mareeba, Qld Theodore, Qld Maroochydore, Qld Burpengary, Qld Childers, Qld Pomona, Qld Mareeba, Qld Glass House Mtn, Qld Campbelltown, SA Kimberly, Tas Launceston, Tas Boolara, Vic Haddon, Vic Haddon, Vic Garfield, Vic via Broome, WA Jandakot, WA Shenton Park, WA WA Brookton, WA Jandakot, WA Bedford, WA WA Bolgart, WA Kellerberrin, WA WA Woodvale, WA Byford, WA Broome, WA Broome, WA West Swan, WA Gosnells, WA Karratha, WA Broome, WA Gnangara, WA Denham, WA Harvey, WA Forrestdale, WA Beldon, WA Karrinyup, WA Bouvard, WA

K. Andrews

Mermaid Aquatics Aquarium Fish Farms of Australia Sunland Freshwater Aquaria Mountain Raised Redclaw Tasmanian Ornamantal Fish Farm Boolara B.D. Kingfish Breeders I & P Tropical Fish Breeders Wetlands Tropical Fish Farm Anna Plains Cattle Co P/L Fish Breeding Industries Silver perch grower

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Name Ian Petherick G & D Wellington G Thompson Other contacts Rod Bamess Glenn Briggs Max Caithness Viv Causby Ric Fallu Derek Hall Lindsay Hopper Loo Jang Jing Dan Machin Jared Patrick WA Stakeholders Company Address PO Box 383 PO Box 46 19 Lance Street Suburb, State Kununurra, WA Kununurra, WA Albany, WA

WA Silver Perch Growers Assoc'n Aquarium Industries AQIS Tasmanian Inland Fisheries Comm. NT Fisheries PIJAC Aquasonic DPI Ornamental Fish Section Fisheries WA PIJAC Aust. - New Guinea Fish Assoc'n Aquarium Society of WA Koi Society of WA Perth Cichlid Society Pet Industry Advisory Committee in Ornamental Fish Apollo Aquarium Aquascape Fish Imports Aquatics International United Breeders Exchange Dolphin International Bassleer Biofish Worldwide Aquatics ERI International Nanyang Fish Farm Pisces Pacific Ruinemans Aquatics Honolulu Fish Imports Woodland Aquatics Z-Fish Inc Supremefish Aquarium SW Imports Teo Way Yong & Sons Ty’s Tropicals Inc. 99 International Inc PO Box 20 PO Box 550 PO Box 20 PO Box 323 31 Rochester Way

WA
Vic Tas NT WA Singapore WA Qld Morley, WA Applecross, WA Morley, WA Gosnells, WA Meadowsprings, WA Singapore Great Britain Malaysia USA USA USA USA Malaysia USA Hawaii USA USA Singapore Great Britain Hong Kong USA USA

International Dealers

Douglas Baer Jim Barry Ron England

Jeff Preble Wayne Samiere Keith Saylor Penny Stevens

Tyler Takehara Tony Yung

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10. Appendix

10.1 10.2 10.3 10.4 10.5 10.6 10.7

Appendix 1 – Market Profile Appendix 2 – Production Assessment Appendix 3 – Customer Survey Appendix 4 – Producer Survey Appendix 5 – Export of Live Native Fish Appendix 6 – Schedule 4 Exempted Species Appendix 7 – IATA Live Animal Transport Regulations

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APPENDICIES TABLE OF CONTENTS
APPENDIX 1 - MARKET PROFILE ................................................................................................................ 48

1.1 Worldwide demand for ornamental fish.............................................................................................. 48 1.2 The European Market for ornamental fish........................................................................................... 50 1.2.1 Demand for Ornamentals in the European Market...................................................................... 50 1.2.2 Imports and Market Access Issues .............................................................................................. 50 1.2.3 Production of Ornamentals.......................................................................................................... 51 1.2.4 Exports of Ornamentals ............................................................................................................... 51 1.3 The United States Market for ornamental fish .................................................................................... 51 1.3.1 Demand for Ornamentals in the US............................................................................................. 51 1.3.2 Imports and Market Access Issues .............................................................................................. 52 1.3.3 Production of Ornamentals.......................................................................................................... 54 1.3.4 Exports of Ornamentals ............................................................................................................... 55 1.4 The Singapore Market for ornamental fish.......................................................................................... 55 1.4.1 Demand for Ornamentals in Singapore ....................................................................................... 56 1.4.2 Imports and Market Access Issues .............................................................................................. 56 1.4.3 Production of Ornamentals.......................................................................................................... 56 1.4.4 Exports of Ornamentals ............................................................................................................... 56 1.5 The Hong Kong Market for ornamental fish ....................................................................................... 57 1.5.1 Demand for Ornamentals in Hong Kong..................................................................................... 57 1.5.2 Imports and Market Access Issues .............................................................................................. 58 1.5.3 Production of Ornamentals.......................................................................................................... 58 1.5.4 Exports of Ornamentals ............................................................................................................... 58 1.6 The Japanese Market for ornamental fish............................................................................................ 59 1.6.1 Demand for Ornamentals in Japan .............................................................................................. 59 1.6.2 Imports and Market Access Issues .............................................................................................. 59 1.6.3 Production of Ornamentals.......................................................................................................... 60 1.6.4 Exports of Ornamentals ............................................................................................................... 60 1.7 Emerging Export Nations .................................................................................................................... 60 1.7.1 Czech Republic............................................................................................................................ 60 1.7.2 Sri Lanka ..................................................................................................................................... 61 1.8 The Australian Market for ornamental fish ......................................................................................... 62 1.8.1 Demand for Ornamentals in Australia......................................................................................... 62 1.8.2 Imports and Market Access Issues .............................................................................................. 64 1.8.3 Production of Ornamentals.......................................................................................................... 71 1.8.4 Exports of Ornamentals ............................................................................................................... 78 1.9 Customer Survey Results..................................................................................................................... 82 1.9.1 Purchasing Criteria ...................................................................................................................... 82 1.9.2 Market Perception of Locally Produced Ornamental Fish .......................................................... 83 1.9.3 Impact of Changes to the Quarantine System .............................................................................. 84 1.9.4 Potential market opportunities for GIAG .................................................................................... 85 1.9.5 International customers................................................................................................................ 88 1.9.6 Other Findings from the Surveys................................................................................................. 89
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1.10 Worldwide Demand for Food Fish.................................................................................................. 90 1.10.1 World production - fisheries & aquaculture ............................................................................ 90 1.10.2 Outlook : Supply and Demand Trends .................................................................................... 91 1.11 The Australian Market for Food Fish .............................................................................................. 93 1.11.1 Demand for Food Fish in Australia ......................................................................................... 93 1.11.2 Production of Native Food Fish............................................................................................... 95 1.11.3 Demand for Native Food Fish in Australia.............................................................................. 96 1.11.4 Demand for Advanced Juveniles............................................................................................. 98 1.11.5 Market survey for advanced juveniles..................................................................................... 99 1.12 Summary of Market Profile Findings ............................................................................................ 103 1.12.1 Export Markets for Ornamentals ........................................................................................... 105 1.12.2 Australian Markets for Ornamentals ..................................................................................... 106 1.12.3 Australian Markets for Advanced Juveniles.......................................................................... 108

2.

APPENDIX 2 - PRODUCTION ASSESSMENT ................................................................................... 109

2.1 Industry Culture practices.................................................................................................................. 109 2.1.1 Carps and Barbs......................................................................................................................... 109 2.1.2 Native Species ........................................................................................................................... 110 2.1.3 Livebearers ................................................................................................................................ 110 2.1.4 Rainbows ................................................................................................................................... 111 2.1.5 Anabantids (bubble nest builders) ............................................................................................. 111 2.1.6 Cichlids...................................................................................................................................... 112 2.1.7 Tetras ......................................................................................................................................... 112 2.1.8 Catfish........................................................................................................................................ 112 2.1.9 Saratoga ..................................................................................................................................... 113 2.1.10 Advanced Juveniles for Food Fish Production...................................................................... 113 2.2 Production Issues............................................................................................................................... 116 2.2.1 Level of Skill ............................................................................................................................. 116 2.2.2 Labour Input .............................................................................................................................. 117 2.2.3 Capital Requirement .................................................................................................................. 117 2.2.4 Feed Requirements .................................................................................................................... 118 2.2.5 Crop Cycles ............................................................................................................................... 119 2.2.6 Breeding & Broodstock ............................................................................................................. 120 2.2.7 Environmental Limitations ........................................................................................................ 120 2.2.8 Transport and Distribution......................................................................................................... 121 2.2.9 Packaging .................................................................................................................................. 124 2.3 Ornamentals Producer Survey Results .............................................................................................. 128 2.3.1 General findings ........................................................................................................................ 128 2.3.2 Domestic production levels ....................................................................................................... 128 2.3.3 Market Niches............................................................................................................................ 129 2.3.4 Purchasing Criteria .................................................................................................................... 129 2.3.5 Loyalty of Australian customers................................................................................................ 131 2.3.6 Labelling as Australian Produced Fish ...................................................................................... 131 2.3.7 Producer problems..................................................................................................................... 131 2.3.8 Likely Impact of changes to the Quarantine System ................................................................. 132 2.4 Summary of Production Assessment Findings .................................................................................. 132 2.4.1 Culture practices........................................................................................................................ 132 2.4.2 Most appropriate species for GIAG........................................................................................... 133 2.4.3 Recommendations for GIAG..................................................................................................... 135
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3.

APPENDIX 3 - CUSTOMER SURVEY.................................................................................................. 136

4.

APPENDIX 4 – PRODUCER SURVEY................................................................................................ 139

5.

APPENDIX 5 - EXPORT OF LIVE AUSTRALIAN NATIVE FISH ........................................................ 142

6.

APPENDIX 6 - SCHEDULE 4 EXEMPTED SPECIES.......................................................................... 144

7. APPENDIX 7 - INTERNATIONAL AIR TRANSPORT ASSOCIATION (IATA) LIVE ANIMAL REGULATIONS (LAR) 1998......................................................................................................................... 149

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APPENDIX 1 - MARKET PROFILE
The scope of this study includes an assessment of both the demand and supply for ornamental fish in the domestic market and a number of key international markets, as well as the potential market for the production of advanced juvenile native species for on-growing by other farms. Preparation of this section has involved detailed investigation of the markets for ornamental fish worldwide through sources including industry contacts, texts, magazines, scientific papers and the Internet. In addition, the findings of a customer survey conducted as part of the study are also reported. This provides additional information about the Australian market that is most current, and importantly, imparted from the perspective of the customers who would be likely to source product from GIAG.

10.8

Worldwide demand for ornamental fish

The international market for ornamental fish is well established throughout the western world. Estimates indicate that there are more than 100 million hobbyists throughout the world (Winfree, 1989; Bassleer, 1994; Willis, 1995). These hobbyists purchased an estimated US$3.0 billion worth of ornamental fish and accessories in 1992 (Bassleer, 1994). A recent FAO report (FAO, 1999a) suggests that the international trade in ornamental fish has expanded at an average rate of 14% per annum since 1985. The major markets for ornamental fish are the industrialised western economies, which are characterised by high population densities and cool climates (Bassleer, 1994). Germany, Britain, France, the Netherlands, Japan, the USA and Australia are key international markets for ornamental fish (Fernando & Lim, 1989; Bassleer, 1994). The hobby of keeping ornamental fish enjoys a similar popularity throughout these markets, with studies suggesting that it is the second most popular hobby after photography in the USA (Winfree, 1989; Chapman et al., 1997). The market is supplied with a vast range of different species and varieties of fish, with in excess of 1,500 fish and invertebrates now commonly stocked in aquariums throughout the world (Willis, 1995; Chapman et al., 1997). However, more recent estimates indicate that over 3,000 species are currently available (PIJAC, 2000). The number of species has increased rapidly over the past 20 to 30 years and continues to increase due to improvements in breeding, transport and aquarium technology (Willis, 1995). The market for ornamental fish can be divided into the following four sectors: • • • • coldwater freshwater species; tropical freshwater species coldwater marine and brackish species; and tropical marine and brackish species.

The largest market is for the tropical freshwater species, accounting for between 85% (Ingram, 1987) and 90% (Bassleer, 1994) of the worldwide ornamental market. Statistics for actual fish numbers and species traded are difficult to find (Willis, 1995). Figures quoted are generally for value only. Andrews (1992) suggests that worldwide, retail sales for ornamental fish and associated accessories are worth more than US$7.2 billion per annum, and Bassleer (1994) quoted retail sales

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of ornamental fish to be worth US$3.0 billion per annum. Figure 5.1 shows that annual sales of ornamental fish at the wholesale level are estimated to be worth more than US$900 million (Bassleer, 1994).

Figure A1.1 International sales of ornamental fish

Several Asian countries (including Singapore, Hong Kong, Thailand, Malaysia and Sri Lanka) have significant export industries that supply pond-raised fish to the world market. Bassleer (1994) estimated that at least 50% of the world’s supplies originate from Asian countries, with Singapore and Hong Kong being the main centres in the world for production and transhipment of ornamental fish (Chapman et al., 1997). The importance of wild caught fish is decreasing due to improvements in breeding and production technology, with 80 per cent of species now being produced on farms (Winfree, 1989). The main suppliers of wild caught fish are now South American countries, which have to date failed to develop a significant aquaculture industry based on ornamental fish production (Chapman et al., 1997). A comparison of the relative value of ornamental fish compared to food fish is also an interesting point to note. Bassleer (1994) and Willis (1996) indicate that ornamental fish generally have a much higher value than food fish, as a result of the extra degree of quality control in production of ornamentals and the fact that they are sold live. These levels of quality control in the areas of nutrition, water quality management and disease control are needed when producing ornamental fish in order to ensure the product is healthy and aesthetically pleasing when sold (Willis, 1995). Examples of the relative values of food fish is approximately US$3.00 per kg compared with ornamental fish at approximately US$300 per kg (Bassleer, 1994). FAO (1999a) also states that the exports of ornamental fish from the Maldives in 1994 were worth US$496,000 per tonne. In fact, some highly prized fish such as Symphosodon discus can fetch in excess of $3,000 per kg (Willis, 1996). However, while the price for some species may be very high, demand is likely to be low. This is because the market for ornamental fish is price sensitive, with sales decreasing substantially with price increases (Willis, 1995). This sensitivity is reflected in the proportional sales of different species, where in Australia, approximately 20 species of ornamental fish account for 80 per cent of all fish sales (Humphrey, 1989). These species, often referred to as the 'bread and butter' species, include the easily farmed, inexpensive species such as livebearers (guppies, mollies, platys), gouramis, neon tetras, and others (Brown & Gratzek, 1982; Willis, 1995).

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10.9

The European Market for ornamental fish

The European Economic Community (EEC) consists of a number of European countries including: Belgium, Luxembourg, Denmark, Germany, Greece, Spain, France, Ireland, Italy, The Netherlands, Portugal and the United Kingdom. Since the collapse of communism in Eastern Europe, there are several eastern European countries trying to gain membership. The major EEC importers are Germany, United Kingdom, France, and the Netherlands (Davenport, 1996). The Netherlands and Germany are traditional centres for the ornamental fish trade in Europe, with several large importers and exporters who supply within the EEC (Bassleer, 1994; Davenport, 1996).
10.9.1 Demand for Ornamentals in the European Market

The keeping of ornamental fish as a hobby dates back to the early 1900s when very limited numbers of fish were maintained (Willis, 1995). The popularity began to expand in the 1930s, but it was not until low cost air freight after World War 2 allowed cheaper imports in, that the hobby became available to average consumers (AgEnt, 1993). The popularity is similar to that of other regions, with Davenport (1996) estimating 13% of British households maintain ornamental fish – the hobby enjoys similar popularity throughout Europe. Bassleer (1994) suggests that cold climate countries are characteristic of being participants in this largely indoor hobby, and as most European countries have a relatively cold climate, the hobby enjoys considerable popularity. Goldfish are the most popular species (Davenport, 1996), most likely due to the ease of maintaining them. Demand for ornamental fish in Europe is expected to increase due to the opening up of eastern Europe (Cheong, 1998).
10.9.2 Imports and Market Access Issues

The south-east Asian countries are the major suppliers of fish to Europe, with the largest single supplier being Singapore (Bassleer, 1994). The USA supplies wild caught fish which originate from South America and pond raised fish from Florida (Bassleer, 1994). Imports from Israel and Japan mainly comprise outdoor pond-fish such as goldfish and fancy coloured koi carps (Bassleer, 1994). The following table shows the value of imports from major suppliers for the EEC.
Table A1.2 EEC import value of freshwater and marine ornamental fish for 1992
Country of Origin Singapore Netherlands USA Israel Japan Czechoslovakia Indonesia Brazil Thailand Philippines Germany Colombia Sri Lanka Others Total imports
Source: Bassleer (1994)

Freshwater fish (US$ m) 35.00 5.80 5.35 5.30 4.80 4.70 1.80 2.85 2.20 0.75 2.00 1.70 0.40 10.025 ca 82.00

Marine Fish (US$ m) 1.80 1.65 1.10 0.0013 2.10 1.30 1.20 1.85 ca 11.00

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Davenport (1996) valued European imports at ECU 67.6 million in 1993, and suggested that imports increased in 1994 but he did not provide a value. The United Kingdom accounts for approximately 23% of all EEC imports, importing between 35 and 40 million fish annually (Davenport, 1996). Imports of ornamental fish from Czechoslovakia more than doubled during the period 1992 to 1994 due to improved quality and reduced freight costs (Bassleer, 1994; Davenport, 1996). Production is expected to continue to increase, with sales of ornamental fish to the EEC expected to significantly rise when Czechoslovakia becomes a member of the EEC in 2002/3 (OFI, 2000). Whilst there are variations in the requirements of importing countries, all countries are signatories to CITES and imports of different species must meet CITES requirements (OOFI, 2000). Some form of health certification is generally required prior to export in the form of a Veterinary Equivalence Certificate, with consignments of fish subject to veterinary inspection upon arrival in most European countries (OFI, 2000).
10.9.3 Production of Ornamentals

There is very little data available on the production of ornamental fish in the EEC. The majority of production is known to be based on cold-water species such as goldfish and Koi carp (Davenport, 1996). However, Germany is recognised throughout the world as a major producer and exporter of high quality tank raised cichlids and tetras (Willis, 1995). These fish are not suited to pond production. The Netherlands is a major centre for redistribution of ornamental fish, exporting approximately half of the ornamental fish it imports (Davenport, 1996).
10.9.4 Exports of Ornamentals

EEC exports are worth approximately US$20.1 million annually, with the majority of these exports sold between European countries (Davenport, 1996). Exports outside of Europe originate mainly from Germany, which supplies highly prized species of cichlids and tetras to world markets.

10.10 The United States Market for ornamental fish
10.10.1 Demand for Ornamentals in the US

The US market for ornamental fish is undoubtedly the single largest market in the world (Bassleer, 1994). This market is serviced by approximately 100 importers and 500 wholesalers (PIJAC, 2000). Consumers purchase around US$1 billion worth of fish at the retail level (Chapman et al., 1997) from between 9,000 and 12,000 retailers (PIJAC, 2000), and supply over 3,000 varieties of fish, invertebrates and plants. The keeping of ornamental fish in the USA is very popular. Chapman et al. (1997) reported that 10.6% of all US households kept fish, making it the second most popular hobby in the USA (PIJAC, 2000). Industry reports suggest that there are 1.2 aquariums per house on average for those households involved with the hobby, and that there is an estimated household population of at least 200 million ornamental fish (PIJAC, 2000). The numbers of aquariums and ornamental fish maintained in corporate, government and institutional buildings is not known. According to Chapman et al. (1997) demand is seasonal, with a rise in imports during March/April due to increased demand at this time. Imports also rise in early spring as a result of diminished local production due to low temperatures.

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Fish are derived from two sources: imports from international suppliers (mostly based in south-east Asia) and domestic producers located throughout the country. Domestic producers number at least 800 throughout the country, with over 300 breeders based in the state of Florida who supply 95% of fish sold in North America, worth $59.9 million in 1999 (PIJAC, 2000). The production of ornamental fish is one of the leading cash crops in the US aquaculture industry and is continuing to expand (Chapman et al., 1997).
10.10.2 Imports and Market Access Issues

In 1992, over 201 million ornamental fish were imported into the USA (Chapman et al., 1997), worth US$100 million (Bassleer, 1994). Imports were mainly sourced from south-east Asia, as shown in the following table.
Table A1.3 International suppliers of ornamental for the USA from 1989 to 1992
Country or Region of Origin South-east Asia South America Japan Africa Australia Central America Europe Other Total Imports % 74.5 14.0 3.7 2.1 2.1 2.7 0.5 0.4 100.0

Source: adapted from Chapman et al., 1997

Imported fish enter the USA primarily through the west coast (principally Los Angeles and San Francisco), as well as New York and Florida in the east. These major entry ports are considered to be the principal aggregation and distribution centres for ornamentals in the USA (Chapman et al., 1997). The major ports of entry for ornamental fish imports and their proportion by value in 1992 are provided in the following table.
Table A1.4 Principal ports of entry for ornamental fish in the USA
Port of Entry Los Angeles, California Miami, Florida New York, New York Tampa, Florida Honolulu, Hawaii San Francisco, California Chicago, Illinois Other Total % of total USA imports 58.9 12.7 19.9 1.4 0.7 2.7 2.4 1.3 100

Source : based on data from Chapman et al., 1997

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The primary types of fish imported into the USA have remained consistent over recent years, with guppies and neon tetras continuing to account for the majority of imports (Chapman et al., 1997). The following table shows the principal species imported and their average value for 1992.

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Table A1.5 Principal species and average value imported into the USA in 1992
Common name Guppy Neon tetra Platy Siamese Fighting Fish Goldfish Chinese algae-eater Molly Cardinal tetra Glassfish Tiger Barb Red Oscar Yucatan Molly Redtail Shark Coolie Loach Sucker Catfish Harlequin rasbora Angelfish White cloud Green Corydoras Leopard Corydoras Total % of total fish imported 25.8 11.3 5.4 2.7 2.4 2.4 2.0 1.5 1.5 1.3 1.2 1.1 1.0 1.0 0.9 0.9 0.8 0.5 0.2 0.1 64 Average price 0.14 0.14 0.16 0.32 1.06 .06 0.16 0.16 0.11 0.22 0.82 0.32 0.22 0.14 0.42 0.14 0.67 N/A N/A N/A N/A

Adapted from Chapman et al., 1997

At present the USA does not require health certification for live imports of ornamental fish (Max Caithness, AQIS, pers. comm., 2000). However, it is a requirement that imported fish do not breach CITES protocol (ie. are not listed as endangered). There may also be differences between USA states with respect to restrictions for different species of fish, as is the case in Australia (Max Caithness, AQIS, pers. comm., 2000).
10.10.3 Production of Ornamentals

Ornamental fish production is a major sector of the US aquaculture industry (Chapman et al., 1997). The industry is expanding with a 10% increase from 1992 to 1993, making ornamentals the fastest growing segment of the aquaculture industry. There are currently more than 800 commercial operators throughout the USA, with an additional unknown number of hobbyist and 'backyard' breeders (Winfree, 1989; Chapman et al., 1997). The commercial breeders are mainly located in Florida, but increasing numbers of fish are being produced in Hawaii (PIJAC, 2000). Florida farms cover an estimated 8,000 acres (3,240 ha), producing in excess of 300 species of fish (Winfree, 1989). These fish are distributed over North America via air transport with an estimated 15,000 to 20,000
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boxes of fish being shipped weekly from the State's airports (PIJAC, 2000). The value of production in Florida for 1999 was estimated at US$59.9 million (PIJAC, 2000), having risen from US$52.5 million in 1995 (Chapman et al., 1997).
10.10.4 Exports of Ornamentals

The USA is a significant exporter in the world market, with Cheong (1998) ranking the USA as the third largest exporter in the world in 1992 with 11% of world exports. The USA exports a large variety of freshwater and marine fish with freshwater species such as livebearers, gouramis, barbs, tetras, armoured catfish, and a variety of cichlids predominating exports (Chapman et al., 1997). The majority of these are produced in Florida. The USA also acts as a transhipping nation, aggregating wild-caught fish from South American countries, along with domestically produced fish for export to other countries (Chapman et al., 1997). There are no data to indicate the numbers of transhipped versus domestically produced fish exported. The major export destinations for the USA are detailed in the following table.
Table A1.6 Destination countries for exports of ornamental fish from the USA for 1994
Destination Country or Region Canada South-east Asia Europe Japan Central America South America Other Total Source: Chapman et al. (1997) Exports % 29.0 25.3 20.3 17.6 6.4 1.0 0.4 100.0

Chapman et al. (1997) also suggests that exports from the USA have been steadily increasing, with average increases of approximately 16% from 1989 to 1992. Exports totaled US$17.3 million in 1993 (Chapman et al., 1997).

10.11 The Singapore Market for ornamental fish
Singapore is recognised as the world’s centre for the production and distribution of ornamental fish (Fernando & Phang, 1994; Chapman et al., 1997). Fernando & Phang (1994) provide the following factors as the reasons for Singapore’s rise in prominence in the world trade of ornamental fish: • Singapore is strategically located for easy access to major markets; • A history of more than 50 years in selective breeding and commercial production of a large range of ornamentals; • Suitable climate for producing ornamental fish; • Government support for the industry; and • All Singapore farms are family businesses, therefore expertise and experience is handed down to succeeding generations.

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10.11.1

Demand for Ornamentals in Singapore

There is little data available on the local market for ornamental fish in Singapore, the majority of data being for production and export. The keeping of ornamental fish is a well established hobby in Singapore, with a high level of participation (Loo Jang Jing, Singapore DPI Ornamental Fish Section, pers. comm., 2000). However, due to the relatively small market domestic consumption is limited, with demand for ornamental fish in Singapore largely driven by demand for exports. A major trend in the hobby market in Singapore involves the breeding of species such as Discus, with the progeny often sold to commercial operations for grow-out and sale on the export market (Loo Jang Jing, Singapore DPI Ornamental Fish Section, pers. comm., 2000).
10.11.2 Imports and Market Access Issues

Singapore acts as a major centre for transhipping ornamental fish, with many of its imports originating from surrounding Asian countries. In fact, as well as being the largest exporter of ornamental fish, Singapore is also the seventh largest importer of ornamental fish (Cheong, 1998). In particular, Malaysia has been a major source of imports for distribution through the well-established Singapore exporters. However, Singapore importers source fish from countries throughout the Asian, Pacific and South American regions (Cheong, 1998). At present Singapore has few restrictions and requirements for importation of ornamental fish. To enable the importation of ornamental fish into Singapore, a licensed importer in Singapore must apply for an inward declaration permit by simply declaring the details of consignment. No certificates or health checks are required. All endangered species would need a CITES permit (Loo Jang Jing, Singapore DPI Ornamental Fish Section, pers. comm., 2000).
10.11.3 Production of Ornamentals

Some 300 varieties of over 50 species of ornamental fish are produced and exported in Singapore (Fernando & Phang, 1994). The major types of fish produced include the guppy, tetra, platy, gouramis, molly, goldfish, catfish, swordtail, barb, angelfish, rasbora, cichlid, danio, loach, fighting fish, shark, discus and carp (Cheong, 1998). Farming methods are generally based on low density, extensive culture methods. However, there is growing interest in more intensive methods of production (Fernando & Phang, 1994), with several farms now utilising recirculating system technology for the production of a range of species (Loo Jang Jing, Singapore DPI Ornamental Fish Section, pers. comm., 2000). The production of ornamental fish in Singapore has increased dramatically since the 1960s from a value of S$0.78 million to over S$72 million in 1992, most of which is exported (Fernando & Phang, 1994).
10.11.4 Exports of Ornamentals

Singapore is by far the dominant exporting country of the world. However, Singapore’s market share has been steadily eroding over the past 15 years due to the emergence of new exporting nations such as Sri Lanka, Indonesia and Czechoslovakia (Cheong, 1998). Singapore exports fish to approximately 100 countries worldwide (Fernando & Phang, 1994). The following table provides exports values from Singapore to the ten major destinations for 1994.

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Table A1.7 Value of exports from Singapore for ten major destinations for 1994
Country Japan USA United Kingdom Germany France Italy Spain The Netherlands Belgium Australia Other Total Value of Exports (SGP$) 13.58 13.2 10.75 7.92 6.79 5.28 4.72 3.58 1.89 1.13 11.48 S$80.32

Source : adapted from Cheong (1998)

The value of exports in 1994 of S$80.32 million was equivalent to US$50 million, with 93% of this being freshwater species of fish (Cheong, 1998). Singapore exports are steadily increasing with an average annual growth rate of 9% between 1985 and 1994 (Cheong, 1998). However, export growth has slowed since 1994 due to competitive pressures of new emerging export nations such as Sri Lanka, Indonesia, and Czech Republic (Loo Jang Jing, Singapore DPI Ornamental Fish Section, pers. comm., 2000). Singapore is a signed treaty member of CITES and exports all fish according to IATA standards (Fernando & Phang, 1994). In an effort to regain market share, Singapore has adopted an accreditation scheme for exporters – this monitors for fish quality, quality of packing water, disease history of fish, and management practices used by exporters (Cheong, 1998). This scheme is intended to attest to the quality and disease free nature of exported fish. Similar schemes have been suggested by producers in Australia as a way of increasing competitiveness against imports (Willis, 1995). Exports are somewhat seasonal in nature, with a decrease of approximately 10% of average monthly exports during the period May to August (Cheong, 1998). This is largely due to a decrease in demand in Northern Hemisphere countries during the summer holiday period (Cheong, 1998). This decrease is also partly attributed to a reduction in production due to a slight decrease in temperatures during the corresponding period. This may provide some opportunity for GIAG, however, as the international market demand is reduced during the corresponding period it may be difficult to gain market share.

10.12 The Hong Kong Market for ornamental fish
10.12.1 Demand for Ornamentals in Hong Kong

As for Singapore, there is little data available on the Hong Kong market for ornamental fish. Whilst the keeping of goldfish dates back hundreds of years due to the Chinese influence, there appears to be a relatively small demand for fish in the local market, with the majority of imports and locally produced fish being exported around the world.

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10.12.2

Imports and Market Access Issues

Hong Kong also acts a major centre for transhipping of fish, with many of its exports derived from imported fish (Bassleer, 1994). Ornamental fish are imported from countries throughout the region, including; Vietnam, Thailand and mainland China (Jetro, 1997). It is expected that the importation and redistribution of ornamental fish from China will continue to grow now that integration has occurred (Jetro, 1997). There are no data to quantify types of species and number imported into Hong Kong. Hong Kong does not have any health certification requirements or species restrictions (Max Caithness, AQIS, pers. comm., 2000), thereby making the Hong Kong market the easiest market to access outside of Australia.
10.12.3 Production of Ornamentals

Production of ornamental fish is based almost entirely on freshwater species, applying simple, low technology pond culture methods (Bassleer, 1994). It is known that production dates back to a similar time to that of Singapore, although goldfish have been farmed for hundreds of years due to the Chinese influence. An examination of the internet sites of major exporters suggests Hong Kong produces similar species to other Asian countries such as Singapore. No other information regarding the aquaculture of ornamental fish in Hong Kong could be obtained.
10.12.4 Exports of Ornamentals

Hong Kong is ranked as the second largest exporter of ornamental fish, second only to Singapore, accounting for 11% of the world’s exports in 1992 (Cheong, 1998). Exports from Hong Kong have steadily increased since 1983 (Cheong, 1998). Most exported fish are now sourced from mainland China, where a dramatic increase in production of ornamental fish has occurred (Jetro, 1997). Fish are also sourced from countries such as Vietnam and Thailand, and then redistributed. The majority of ornamental fish exported from Hong Kong are freshwater species, with marine fish accounting for less than 1% of exports (Jetro, 1997). As previously indicated, Hong Kong is regarded as one of the largest trading countries in the world, exporting a combination of cultured species and wild caught fish from surrounding countries, as well as Africa and South America (Bassleer, 1994).
Table A1.8 Value of exports from Hong Kong for major markets in 1992
Country Europe Japan USA Others Total
Source: extracted from Bassleer, 1994

Export Value (US$) 2.67 million 12.15 million 7.4 million Unknown 22.62 million

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10.13 The Japanese Market for ornamental fish
10.13.1 Demand for Ornamentals in Japan

The demand for ornamental fish has steadily increased in Japan for most of the 1990s (Jetro, 1999). The Japanese ornamental fish market (including accessories, fish, foods, etc.) is estimated to have a retail value worth in excess of 135 billion yen (almost A$2.0 billion) in 1995. In that year, sales of tropical aquarium fish accounted for about 24 billion yen (A$300 million) (Jetro, 1997). However, more recent figures indicate that retail sales of tropical ornamental fish had fallen to about 15 billion yen (A$200 million) (Jetro, 1999). Insufficient consumer support, by way of good advice on fish keeping, has been blamed for the dramatic decline in consumer interest in the hobby. Apparently, poor rates of survival of fish in home aquariums has become common (Jetro, 1999). Distribution systems in Japan are similar to those in other countries. Importer/wholesalers source fish from local breeders and through imports, distributing these fish to retailers who then supply to the consumer (Jetro, 1997).
10.13.2 Imports and Market Access Issues

Imports of ornamental fish into Japan increased at a dramatic rate in the early 1990’s at between 20 to 30% annually until 1995 (Jetro, 1999) Japan regularly imports from over 50 countries (Jetro, 1997), with Singapore and Hong Kong the major suppliers of ornamental fish for Japan, due to the aggregation and transhipping activities of several large wholesalers (Bassleer, 1994). The following table lists the value of imports for major supplier countries.
Table A1.9 Japanese import values for freshwater and marine ornamental fish for 1992
Origin Hong Kong Singapore USA Thailand Indonesia Germany Philippines Brazil Malaysia Netherlands Sri Lanka Others Total imports
Source: Bassleer, 1994

US$ million 12.15 10.90 8.30 5.40 4.85 4.75 3.85 3.70 2.35 2.25 0.48 ca 6.00 ca 65.00

The majority of imports arrive through Tokyo and Osaka, where the 16 largest importers are based. These importers supply fish to around 200 wholesalers, who in turn supply around 3,000 retailers nationwide (Jetro, 1997).

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Jetro (1997) details the following points with respect to the legal requirements of exporting to Japan: • Japan is a signatory to the CITES treaty and therefore shipments of fish must meet CITES requirements for threatened and endangered species. • At present there are no other requirements for exporting to Japan. • There are no specific labelling requirements. • Imported fish are subject to a 5% tariff and a further 5% consumption tax on top of the tariff.
10.13.3 Production of Ornamentals

There are no government statistics readily available on the production of ornamental fish in Japan. However, industry estimates suggest that around 5% of ornamental fish sold in Japan are produced locally (Jetro, 1999). Japan is well known for its production of high quality guppies. Domestic production largely comprises of species such as Koi carp (Cyprinus carpio), discus (Symphosodon sp.), neon tetra (Paracheirodon innesi), guppies (Poecilia reticulata), and angelfish (Pterophyllum sp.) whose colour and form appeal to Japanese consumers (Jetro, 1997). Domestic production is most likely to be limited due to unsuitable climate, and the high cost of land and labour (Jetro, 1997).
10.13.4 Exports of Ornamentals

There are no data to suggest that there are any significant exports from Japan.

10.14 Emerging Export Nations
Emerging exporters, such as Sri Lanka, Czech republic and Indonesia may pose a threat to the expansion of Australian exports of ornamental fish. Industry sources suggest that the Czech Republic, Indonesia and Sri Lanka currently supply fish to most of the major ornamental fish markets throughout the world.
10.14.1 Czech Republic

Bassleer (1994) reported that the Czech Republic primarily supplies fish to European markets, and due to its close proximity to Europe, is potentially a major player in this market. Exports increased by approximately 14% between 1995 and 1997 as shown in the following table.

Table A1.10 Values of exports to ‘Top Ten’ countries from the Czech Republic for 1995 and 1997
Destination Germany France Austria Italy Netherlands Belgium PSM Group Pty Ltd 1995 (US$) 4 mill 1.6 mill 392,000 297,000 412,000 326,000 1997 (US$) 4.6 mill 1.9 mill 470,000 429,000 364,000 359,000 23 May 2000

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Sweden 106,000 Great Britain Slovakia 116,000 Switzerland 140,000 Spain 220,000 Total 7,609,000 (adapted from Sojka, 1999)

201,000 189,000 185,000 166,000 8,863

Exports are expected to continue to rise, particularly with the advent of internet sales and integration with the EEC. Sojka (1999) indicates that sales to destinations such as USA, Japan, Denmark and Norway are also increasing and are expected to expand significantly over the coming years. Limited numbers of fish from the Czech Republic have also been imported into Australia (pers comm, Rick Datodi, Aquarium Industries, 2000). Production in the Czech Republic is essentially based a cottage industry, with little industrialised production occurring (pers comm, Rick Datodi, 2000). Some 500 species are produced, mainly in indoor tank systems. Live and frozen foods are frequently used (Sojka, 1999). Whilst production is undertaken by hobbyists on a part-time semi-commercial basis and by small family based business (Sojka, 1999, due to the large number of players involved, total production is quite significant (Sojka, 1999). However, unless industrialisation of production occurs (as it did in Singapore), it is unlikely that production will continue to increase at the rate it has done over the past ten years. Never-the-less, it is suggested that further increases in production could occur once the Republic becomes an EEC member. The relatively short transit times available to European markets (less than 24 hrs), which result in minimised freight costs and reduced transport stress could prove highly advantageous to Czech producers (Sojka, 1999). There are no data to quantify these potential increases.
10.14.2 Sri Lanka

Sri Lanka has traditionally been a major exporter of marine ornamentals which are harvested from its surrounding waters (Bassleer, 1994). Although the production of freshwater ornamental species dates back to the 1930’s, large scale production did not commence until the 1980’s (AgEnt, 1993). In 1990, there were an estimated 200 producers employing approximately 2,000 people, on small family based farms (AgEnt, 1993). Sri Lanka has a reputation as a supplier of low cost poor quality fish (AgEnt, 1993). However, it is likely to pose a threat due to its ability to mass produce low cost fish. Production in Sri Lanka is based on low technology, with semi intensive pond production techniques generally being used. Sri Lankan exports of freshwater ornamental fish in 1992 are shown in the following table.
Table A1.11 Value of exports of freshwater ornamental fish to major markets for 1992
Destination USA Europe Japan Total Value (US$) 1,200,000 400,000 480,000 2,080,000

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The Sri Lankan ornamental fish industry has been greatly assisted by USAID funded consultancy projects, which were aimed at expansion and improvement of production of ornamental fish in the early 1990’s. The report ‘An overview of the Ornamental Aquatics Sector in Sri Lanka’ can be viewed on the web at www.agro-lanka.org/docs/8_93.htm. Sri Lanka has gained market share through aggressive market penetration strategies. One such strategy has involved price-cutting. Reductions of up to 50% off accepted international prices for fish have been reported in an effort to expand sales and encourage new customers (AgEnt, 1993), with any subsequent losses being justified in order to gain market share. Sri Lankan producers are also aiming to develop a more coordinated industry-based marketing strategy, which includes ‘brand’ development (AagEnt,1993). Exports from Sri Lanka are expected to continue to expand over the next ten years. Data regarding the status of the Indonesian ornamental industry is scarce, however anecdotal evidence suggests that the industry is based on low technology pond production. Indonesia is also regarded as a source of cheap ornamental fish, which are often of poor quality (Rick Datodi, Aquarium Industries, pers. comm., 2000). Indonesian exports of ornamental fish are expected to continue to expand over the next ten years.

10.15 The Australian Market for ornamental fish
In Australia, the ornamental fish industry is well established, and estimated to be worth over Au$300 million annually. It is similar in popularity to that in other western countries (Willis, 1995). A study in 1992 suggested that at least 10% of Australian households kept ornamental fish, and that more than one million Australians could be classified as hobbyists (Mangosi, 1992).
10.15.1 Demand for Ornamentals in Australia

The demand for ornamental fish is serviced by a well-established network of commercial breeders, wholesalers and retailers located throughout Australia (Willis, 1995). It is estimated that more than 3,000 retail outlets exist throughout Australia (Humphrey, 1989), most being located in the eastern states. The majority of imported fish are purchased by importers located in Melbourne, which is recognised as the trading hub in Australia. The industry is supplied primarily by wholesalers, that have traditionally imported fish from south-east Asian farms and wild fisheries (O'Sullivan, 1991; Willis, 1995). More recently, however, domestic production has expanded and now accounts for around 50% of the total number of fish sold in Australia (PSM, 1999). Estimates of demand in Australia vary considerably between industry and government sources, ranging from between 12 and 18 million fish per annum (PSM, 1999), with the actual figure likely to be around 14 million (see Table A1.12).
Table A1.12 Estimated total number of ornamental fish supplied to the industry
Source Imports Domestic Producers Collectors/divers Totals
Source: PSM 1999

Marine Fish 80,000 0 100,000 132,600

Freshwater Fish 7,000,000 7,000,000 0 14,000,000

Total Fish 7,080,000 7,000,000 100,000 14,180,000

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Demand for ornamental fish experienced explosive growth during the 1970’s. However, in recent times it has become more stable (McKay & Wharton, 1992). Demand is expected to continue to grow as household disposable income increases (Treadwell et al., 1992; Willis, 1995). The Australian ornamental fish industry is oligopolistic in nature, being supplied by relatively few Australian farms and overseas exporters (Willis, 1995). Whilst the bulk of ornamental fish produced in Australia are sold by wholesalers, some producers utilise several market channels concurrently, selling direct to retailers and consumers (Willis, 1995; PSM, 1999). The relatively higher values of ornamental fish compared to food fish also reflect the composition of the market and the marketing channels utilised for ornamental fish. In general there is a fairly significant markup at each step of the chain, generally in the order of 100% (Willis, 1995). As the generalised marketing channel for ornamental fish shown in Figure 5.2 depicts, there are several steps within the chain. Therefore, prices of fish at the retail level may be several times higher than at the farm gate. This marketing schematic may be further extended through addition of country or city buyers (agents) who aggregate supplies of fish from farmers and collectors and then sell them to exporters (Fernando & Phang, 1994). Again, this will add to the end cost of fish. Bassleer (1994) states that wholesalers play a major role in the marketing chain as they operate as a link between supplies (from imports and domestic producers) to the retailer and consumers. Wholesalers serve as aggregators that are able to source and maintain relatively large numbers of a variety of fish available for retailers (Willis, 1995). Wholesalers generally have a large customer base and distribution network that enables them to efficiently dispense large volumes of fish. It is often difficult for producers to bypass wholesalers in the chain due to their greater product range and established, efficient distribution networks (Willis, 1995). Since the most effective sales channel for producers is normally via wholesalers, the majority of ornamental fish producers operate in the business or industry market. Business markets are usually characterised by derived demand; that is demand for an input not for its own sake, but in order to use it in the production of goods and services. This demand fluctuates widely and is generally regarded as elastic, with customers being well informed (Stanton et al., 1994; Hut & Speh, 1995). However, it appears that the ornamental fish market differs from this classic business market as there is little fluctuation in demand throughout the year (Willis, 1995), with minor seasonal fluctuations in demand due to seasonal variation in production from overseas and domestic producers (Chapman et al., 1997). Producers of ornamental fish must therefore gear production towards satisfying demand by producing fish all year round.

Figure A1.13 Generalised international marketing channels for ornamental fish (after Bassleer, 1994)

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10.15.2

Imports and Market Access Issues

10.15.2.1

Regulations

PSM (1999) reported that there were 21 registered importers, and between 15 and 25 wholesalers operating in Australia in 1998. At present, local importers operate under Schedule 6 of the Wildlife Protection (Regulation of Exports and Imports) Act 1982. Live fish may be imported from any country, with prior permission from the Australian Quarantine and Inspection Service (AQIS), provided that the exporter is approved and registered and the species is a permitted import (Schmidt & Love, 1985). The importer must have a quarantine premises that conforms to the specifications approved under the Act, and the fish must remain in quarantine for not less than 14 days (Schmidt & Love, 1985). However, at the time of printing (May 2000), new quarantine regulations were being introduced. The new AQIS regulations can be summarised as follows: • Permission to import must be obtained in writing, with documentation required for each consignment of imports. Import facilities must meet AQIS standards before permission for importing is granted. • Only fish listed on Schedule 6 of the Wildlife Protection Act can be imported. • Each consignment must have an exporter’s declaration, be deemed to be healthy and resident in the exporting country for at least 14 days prior to importation to Australia. • Certain species (ie. goldfish) require health certification against exotic diseases of concern to AQIS.

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• Only approved export premises may ship fish to Australia. Premises are approved on a six monthly basis by the Government veterinary department of the export country. • Compulsory quarantine periods of between 7 and 14 days are required, depending on species. • Any or all fish in quarantine may be tested, treated or destroyed at the direction of AQIS. Additional information and detail on the new AQIS regulations may be obtained from the AQIS website, http://www.aqis.gov.au.

10.15.2.2

Volumes and values

Imports have decreased substantially from their peak of 11.5 million fish in 1977/78 (Lee, 1991) to their current level of approximately 6.0 to 7.5 million fish annually. The number of imports of ornamental fish into Australia has steadily decreased from 1980/81 to present levels (see Figure 5.3). Willis (1995) attributes this gradual decline to: • the introduction of 14 day quarantine periods in 1984; • decline in the number of species that can be imported due to international shortages and CITESassociated regulations; • increases in domestic production of ornamental fish; and • changes in spending patterns of disposable income. Recent changes in consumer spending patterns resulting from increased use of new technologies (such as computer games and internet) in preference to ornamental fish, has been suggested by several authors as a factor in a slowing of growth in the trade over recent years. This change in spending habit has also been highlighted by O’Sullivan (1999) as a possible reason for the recent easing of export growth for countries such as Singapore. However, other factors such as emerging export nations, the Asian economic crisis, the imposition of consumption taxes in Japan (a major market for ornamental fish), and the slowing economic growth in many western countries, should also be recognised as contributing factors to decreased export growth. Changing consumer behaviour has also been suggested as a possible reason for the decline in industry activity in Australia during the 1990’s. Recent ABS import figures (Table A1.14) indicate that Australian imports are currently increasing. Leading industry figures also point to increased industry activity at the present time (Rick Datodi, Aquarium Industries, pers. comm., 2000). Therefore, although changing consumer spending habits must be regarded as a possible threat to the continued growth of the ornamental fish industry both in Australia and throughout the world, it is difficult to quantify their current and future impact at this time due to a lack of objective data. The Australian Bureau of Statistics (ABS) recently changed its reporting methods for the importation of ornamental fish. Consequently, ABS data now combines freshwater and marine ornamentals. However, as marine fish generally average only 2% of the total number of fish imported (PSM, 1999) it does not effect the data significantly.

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Table A1.14 The number & value of imports of freshwater ornamental fish into Australia since1980 /81.
Year 1980 - 81 1981 - 82 1982 - 83 1983 - 84 1984 - 85 1985 - 86 1986 - 87 1987 - 88 1988 - 89 1989 - 90 1990 - 91 1991 - 92 1992 - 93 1993 - 94 1994 - 95 1995 – 96 1996 – 97 A 1997 – 98 a 1998 – 99 a 1999 – 00 (YTD) a Number 9,718,313 9,387,139 8,908,682 9,644,828 8,735,395 8,146,265 7,418,774 6,833,473 6,361,651 7,552,148 7,622,481 7,597,000 7,268,842 7,753,000 6,978,000 6,309,000 6,002,430 6,593,433 7,482,947 4,968,025 FOB Value ($A) 1,426,000 1,596,000 1,777,000 1,929,000 1,988,000 2,100,033 2,066,576 1,840,430 1,689,831 2,107,000 2,294,000 2,385,000 2,438,000 2,720,000 2,152,000 2,119,000 2,207,588 1,973,199 2,107,421 1,547,648

Sources: Lee, 1991 and ABS Notes: a = ABS changed its reporting method to include both freshwater and marine imports together. YTD = information available for the year to date

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Figure A1.15 Number and Value of Australian Imports of Ornamental Fish 1980/81 to 1999/00

Willis (1995) and Lee (1991) suggest that the FOB values provided by ABS do not give a realistic value of imported fish. Costs such as freight, customs clearance fees, import tariffs, insurance and documentation costs, and the 21% wholesale tax, significantly increase the unit cost of fish imported into Australia. Furthermore, the requirement to maintain fish through a compulsory quarantine period adds significant costs to the import process. Lee (1991) indicates that these additional costs are considerable: • at least 100 per cent for freight, customs and documentation; • at least 12 per cent for labour costs during the compulsory quarantine period; and • at least 18 per cent for mortalities during the compulsory quarantine period. A realistic value for imported fish is, therefore, at least 130% greater than the quoted FOB figures. This real value of imported fish is often used by wholesalers to establish benchmark prices for domestic producers. Thus, if 130% was added to the reported value of imported fish, this would provide a more accurate indication of the potential market worth of Australian produced fish (Willis, 1995).

10.15.2.3

Destinations

The ports of entry for imported ornamental fish into Australia represent the major markets for these fish. Figures 5.4 and 5.5 indicate the relative number of imports into Australian states for 1996/97 and 1999/00. Both figures indicate a similar trend, with Victoria being by far the largest importer of fish, capturing over 53% of Australian imports. Melbourne is recognised as the major centre for importation and distribution of ornamental fish in Australia (Willis, 1995; and PSM, 1999).

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Figure A1.16 Imports of ornamental fish by state for 1996/97

Figure A1.17 Imports of ornamental fish by state for 1999 / Feb 2000

One point of note regarding state imports, is the increasing number of fish entering through Queensland. Queensland’s share of imports has increased from 18% in 1996/97 to 24% in 1999/00.

10.15.2.4

Country of Origin

Australian wholesalers currently import fish from a large number of countries. ABS data indicate that over the past three years 24 countries (see Table A1.18) supply Australian importers. The large number of exporting countries, compared with previous data is indicative of the fact that ABS data now combine freshwater and marine fish. The vast majority of imports from Pacific Island countries (such as Fiji,

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Micronesia, Christmas Island, Cocos Island, New Caledonia, Solomon Islands and Vanuatu) are of very small numbers of marine fish. PSM (1999) indicated that the majority of imports originated from Asian countries, with their study indicating that 96% of Australian imports originated from Asia. ABS data in Table A1.18 also indicate that over 96% of Australian imports originate from Asia. The largest importer continues to be Singapore (41.5%), followed by Hong Kong (16.7%), Malaysia (15.3%) and Indonesia (8.1%). Germany is also a significant source of fish, accounting for 2.4% of imports in 1999/00, increasing from 1.34 per cent of imports in 1992/93 (PSM, 1999). The species imported from Germany are generally high value species such as discus (Symphosodon discus) and other cichlid species that have been produced in Germany since World War II (Willis, 1995). The fact that Germany is able to export fish profitably to countries such as Australia indicates that the export of high valued fish is a viable concern for western countries.

Table A1.18 Imports from top ten countries of origin for 1997/98 to 1999/Feb00
1997 - 98 Country of Origin Quantity Christmas Island Germany Hong Kong Indonesia Malaysia Marshall Islands New Zealand Philippines Singapore Sri Lanka Thailand Others Total Source: ABS, 2000 10,510 202,268 1,650,126 505,446 1,200,090 16,383 10,610 26,317 2,392,590 287,024 275,792 16,277 6,593,433 Value ($'000) 2.38 163.77 294.09 234.21 314.72 3.58 1.11 39.79 670.54 68.60 117.70 63 1,973.20 Quantity 0 181,298 1,757,795 1,012,714 775,434 0 5,260 0 2,918,351 366,554 301,418 159,308 7,478,132 Value ($'000) 0 165.40 340.54 319.46 218.90 0 1.22 0 761.38 96.44 105.00 91 2,099.14 Quantity 0 121,540 827,813 401,997 759,512 15,796 507 5,392 2,062,239 275,959 228,134 269,136 4,968,025 Value ($'000) 0 115.93 189.31 178.08 243.17 3.20 1.14 16.33 541.10 75.47 84.48 99 1,547.65 1998 - 99 1999 - Feb 2000

No Government data are available regarding the importation of specific species or species groups (Willis, 1995). However, an industry survey undertaken by PSM (1999) identified the following breakdown of numbers of species groups.

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Table A1.19 Industry estimates of the % of major fish groups imported in 1998
Group Cichlids Livebearers Gouramis Tetras Barbs Catfish Goldfish Rainbows Natives - other Other or not specified Total % of total imports 9.6 15.9 6.4 18.7 10.6 8.1 22.4 0 0 8.3 100 # Imports 1998-99A 717,900 1,189,022 478,600 1,398,410 792,682 605,728 1,675,101 0 0 625,154 7,482,947

Adapted from PSM 1999. Notes. A - based on import total of 7,478,132 for 1998-99 and data presented by PSM (1999). These are calculated values only and may vary from actual values for these groups of fish.

The survey results from PSM (1999) indicated that Goldfish accounted for approximately 22% of total imports by numbers, with Tetras and livebearers also being major imported species groups.

10.15.2.5

Impact of rising costs in producer countries

A further issue regarding the value of imports is that of unit price. Calculations based on ABS FOB data indicate that the unit price of imported fish has increased from $0.15 per fish in 1980/81 to $0.31 per fish in 1999/00 (see Figure 5.6). These data confirm suggestions by Bassleer (1994) and Andrews (1992) that the price of ornamental fish on the export market is increasing due to rising production costs in producer countries.
Figure A1.20 The average unit price of imported ornamental fish 1980/81 to 1999 - Jan 2000

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10.15.2.6

Impact of the new tax system

The introduction of the new GST tax system is also likely to impact on the value of fish within the industry. At present imported fish are subject to a 21% wholesale tax, whereas domestically produced fish are free of tax. Upon introduction of the GST the wholesale tax on imported fish will be removed, with the effect of lowering the cost of imported fish by approximately 6% (Rick Datodi, Aquarium Industries, pers. comm., 2000). As the price for locally produced fish is based on the ‘fit for sale’ price of imported fish, this may lead to a similar rate of reduction in prices paid for locally produced fish. It has also been suggested by industry sources that the new tax system could force the closure of up to 30% of retailers (Derek Hall, PIJAC WA, pers. comm., 2000).
10.15.3 Production of Ornamentals

10.15.3.1

History

Opportunities for the production of ornamental fish to replace imports to Australia have been highlighted by several authors (O'Sullivan, 1991; Lee, 1991; Treadwell et al., 1992; Willis, 1995). Lee (1991) and Willis (1995) suggest these opportunities to be: • • • • Rising freight and other associated importation costs; Imposition of wholesale tax on imported fish; Increasing fears of disease importation; and International shortages of some species.

In the 1970’s, a small pioneering industry developed in response to these opportunities. However, it was not until the late 1980’s, that ornamental fish production became a significant sector in the Australian aquaculture industry (Treadwell et al., 1992; Willis, 1995).

10.15.3.2

Species

Since the early 1990s, the variety of species produced in Australia has increased from around 40 species (Willis, 1995) to over 100 species (various industry sources). Although a large range of species is now being produced, the majority of production involves the culture of just two species, namely koi carp and goldfish. Data from PSM (1999) indicate that up to 90% of Australian production involves these two species alone (see Figure 5.6). Various sources within the industry predict that both total production and the number of species under production will continue to increase.

Table A1.21 Ornamental fish species bred in Australia (adapted from Willis, 1995)
Common Name Angelfish Bristlenose catfish Corydoras catfish (4 species) Goldfish Koi carp Origin Exotic Exotic Exotic Exotic Exotic Scientific Name Pterophyllum scalare Ancistrus dolichopterus Corydoras spp. Carassius auratus Cyprinus carpio

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Guppies Platys Mollies Siamese fighting fish Swordtails Walking fish Paradise fish Danios (2 species) Gouramis (5 species) Saratoga (2 species) Rainbows (10 species) Tiger barbs Tetras (2 species) Source: Willis, 1995

Exotic Exotic Exotic Exotic Exotic Exotic Exotic Exotic Exotic Native Native & Exotic (PNG) Exotic Exotic

Poecilia reticulata Xiphophorus maculatus Poecilia latipinna Betta splendens Xiphophorus helleri Axolotl sp. Macropodus opercularis Brachydanio spp. Trichogaster spp., Colisa spp. Scleropages spp. Melanotaenia spp. Capoeta tetrazona Hyphessobrycon sp., Gymnocorymbus sp.

Advanced Native Juveniles for On-growing At present, there are virtually no sales of advanced juveniles made in WA, and only minor sales made in the eastern states of Australia. However, there are indications that a market is developing for advanced juveniles due to their cost savings to growers in terms of increased survival, shorter grow-out time and increased productivity. It is likely that sales in the short term will be limited until the benefits of these fish are realised by industry. Future sales are also likely to depend upon the dissemination of information of the benefits of advanced juveniles to producers.
Industry suggests that at present, the WA industry purchases approximately 500,000 fingerlings annually. Thus the potential market for advanced juvenile sales could equate to this figure, given wider industry recognition of the benefits associated with the stocking of advanced juveniles. However, in reality, sales of advanced juveniles are unlikely to reach this level in the short to medium term.

Table A1.22 Estimated size of potential markets for native species
Market Local Interstate Export Estimated number 500,000 0 0 Price $0.80 - $2.00 0 0 Potential market value $400,000 – $1 million $0.00 $0.00

Koi Carp At present Koi carp are not a permitted import and, therefore, there are no Koi carp imported into Australia. Domestic production has been estimated at approximately 3.26 million at present. O'Sullivan (1992) provides an average farm gate value for Koi at $1.00 each, which would give domestic production a value of
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$3.26 million. As local producers are large, well established operations, and markets are limited to New South Wales and Western Australia, there is likely to be little opportunity for new entrants to take market share from them. At present there are no data to suggest that any Koi carp are exported from Australia. As these fish are produced in very large numbers in the Asian region, it is unlikely that there will be any international demand for Australian produced goldfish in the foreseeable future.

Native Species for the Ornamental Market At present there are no importations of Australian native fish. Domestic production is limited for this group of fish, with some supplies originating from wild fisheries (Ric Fallu, NT Fisheries, pers. comm., 1999). Again, the number of natives produced in Australia is difficult to determine, with estimates of 10,000 fish, comprising up to 25 species produced annually. The following table lists a range of Australian species currently available on wholesalers' lists for sale in the ornamental fish industry. It should also be noted that several food fish species such as grunters, barramundi and perches are also sold in the ornamental fish trade, both for food and for ornamental purposes.

Table A1.23 Australian native species available for sale by wholesalers in Australia
Species Archer fish Australian Pencilfish – Craterocephalus stercumuscara Barramundi – Lates calcarifer Blue Eye – Pseudomugil spp Bream – Acanthopagrus berda Bully Mullet – Mugil cephalus Berneyi Catfish – Arius berneyi Catfish Black - Neosilurus ater Catfish Tandanus - Tandanus tandanus Catfish Yellow Eeltail - Neosilurus hyrtlii Crazy Fish - Butis butis Frog Fish - Halphryne spp Glassfish Sailfin - Ambassis agrammus Goby Bridled - Arenigobius bifrenatus Goby Desert - Chalamydogobius eremius Grunter Barcoo - Scortum barcoo Grunter Barred - Amniataba percoides Grunter Butler’s - Syncomistes butleri Grunter Coal - Hephaestus crbo Grunter Yellow Bar Tail - Amniataba caudavittatus Gudgeon Empire - Hypseleotris compressa Gudgeon Purple Spotted (NTH) Mogurnda mogurnda Mouth Almighty - Glossamia aprion Mudskipper (Brackish) - Periophthalmus kalolo Murray Cod - Macullochella peeli Perch Golden - Macquaria ambigua PSM Group Pty Ltd Source and Comments Wild caught Wild caught Hatchery Hatchery / wild caught Wild caught Wild caught Wild caught Wild caught Hatchery Hatchery / wild caught Wild caught Wild caught Wild caught Hatchery / wild caught Hatchery / wild caught Hatchery / wild caught Hatchery / wild caught Hatchery / wild caught Hatchery / wild caught Hatchery / wild caught Hatchery Hatchery Hatchery / wild caught Wild caught Hatchery Hatchery 23 May 2000

Gascoyne Ornamental Fish Industry – Consultants' Report

Perch Silver - Bidyanus bidyanus Pigmy Perch Western - Edelia vittata Saratoga Queensland - Scleropages leichardti Scat Red (Brackish) - Scatophagus argus Scat Silver (Brackish) - Selenotoca multifasciata Threadfin Rainbow (Males Only) - Iriatherina werneri

Hatchery Hatchery / wild caught Hatchery Wild caught Wild caught Hatchery

While there are no firm data to support it, the sale of Australian native fish appears to have some export potential. Several operators have exported a number of Australia native species with mixed success (Rick Datodi, Aquarium Industries, pers. comm., 1999). The mixed success has been due to an inability of Australian exporters to meet the demand for fish and a lack of experience/knowledge of live fish transportation techniques (Glenn Briggs, Aquarium Industries, pers. comm., 2000). We believe that there is some potential to develop markets for 'odd-ball' or new species. The problem would be getting enough fish to market size to make it worthwhile. With many species it is difficult to determine market potential, as they have not been exposed to the market. It is likely that species able to be held in a community tank (ie. placid nature) and having a reasonable aesthetic quality (ie. colour, body form, fins) will have some market appeal. Species that are aggressive and have little aesthetic appeal will have a limited market. There may be limited export market potential, although niche markets could be developed.
Table A1.24 Estimated sales potential of Gascoyne region native fish, based on data from Aquarium Industries Pty Ltd
Species Spangled perch Yellowtail Trumpeter Murchison River Hardy Head Golden Gudgeon Empire Gudgeon Number 60 per month 200 per month 150 per month 300 per month 300 per month Comments Bad temperament Bad temperament Poor colour Slightly aggressive Slightly aggressive

Goldfish The majority of goldfish imported into Australia are fancy varieties. It is estimated that imports of goldfish were approximately 899,000 in 1998-99. Due to the large number of varieties and different sizes sold within each variety it is impossible to arrive at average values per fish or a total value for this market segment. The following table provides estimated farm gate prices, based on current wholesale prices for a selection of fancy goldfish.
Table A1.25 Estimated farm gate values for a selection of fancy goldfish varieties
Variety 8 cm Bubble-eye 5cm Butterfly tail 8cm Butterfly tail 5cm Calico PSM Group Pty Ltd Estimated value $3.40 $1.08 $2.80 $0.60 23 May 2000

Gascoyne Ornamental Fish Industry – Consultants' Report

5cm Celestial 8cm Celestial 5cm Lionhead 14 cm Lionhead 5cm Oranda 16cm Oranda

$1.08 $2.45 $0.89 $8.40 $0.78 $10.76

It should be noted that many fancy varieties of fish, particularly sizes over 8cm will be more than one year of age. Typically larger sized fish may be kept and spawned for one or two seasons then sold when three or four years of age. The production of goldfish is well established in Australia, with at least 3.7 million common goldfish produced annually in Australia. However, at present there are no commercial supplies of fancy varieties of goldfish in Australia (Glenn Briggs, Aquarium Industries, pers. comm., 2000). At present there are no data to suggest that any goldfish are exported from Australia. As these fish are produced in very large numbers in the Asian region, it is unlikely that there will be any international demand for Australian produced goldfish in the foreseeable future. Asian countries such as Hong Kong and China are world renowned for their exports of high quality goldfish.

Livebearers Currently, the majority of livebearers sold in Australia are imported (approximately 1.189 million in 1998/99). There are no data to indicate the number of imports of the various types of livebearers.
The number of livebearers produced in Australia is estimated to be approximately 270,000 consisting of four different species. Industry sources indicate that production has recently decreased due to some operators ceasing operations or no longer producing livebearers. At present there are no data to suggest that any livebearers are exported from Australia. As these fish are produced in very large numbers in the Asian region, it is unlikely that there will be any opportunity for Australian produced livebearers in the foreseeable future.

Rainbows At present there are no importations of Australian native fish into Australia. Domestic production of rainbow fish is estimated to be approximately 70,000 fish per annum, comprising of 20 species. Farm gate values are between $0.75 for high volume species and up to $5.00 for large specimen males.
An operator based in Brisbane has been exporting rainbows with good success, and is apparently unable to meet demand (orders are in the order of 10 boxes per species, ie. Several hundred fish per species) (Rick Datodi, Aquarium Industries, pers. comm., 2000). Efforts to contact this operator have not been successful and the validity of this information cannot be verified. There is a potential problem with how well these fish will travel. Very little has been published on how to transport these fish, which are notorious for mortalities during transit.

Saratoga Juvenile saratoga are generally not overly aggressive and can be kept in a community tank, however, larger specimens can be aggressive and are not normally suited for community tanks.

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Due the mystic of these fish they are highly prized, particularly in Asian markets. At present sales of these fish are limited by production of suitably sized fish (Glenn Briggs, Aquarium Industries, pers. comm., 2000). Large-scale production of small juveniles (up to 100mm) would help to increase the market of these species. Average prices are also decreasing (Anon., 1999), and are likely to continue to fall if larger numbers are made available to the market. Typical prices are Scleropages leichardti $12.00 and S. jardini - $16.00 each. Sales of up to 200 fish per month for each species are possible with just one wholesaler - extrapolated this would indicate a national market size of approximately 8,000 per year. A reduction in price of 30% would likely double these sales (Glenn Briggs, Aquarium Industries, pers. comm., 2000). At present there are no importations of Saratoga or the Asian equivalent Arowana. Queensland production of Saratoga has been stable for several years with annual production of approximately 3,000 fish (Anon, 1999). Industry estimates put national production at up to 8,000 per year. One operator surveyed in PSM (1999) indicated that he exports Australian native fish and a proportion of these are Saratoga. However, there are no data to indicate how many are exported. Jetro (1997) indicates that Australian produced saratoga are popular in Japan, and that the market is under-supplied.

Gouramis The number of gouramis imported was approximately 478,000 in 1998/99. As the majority of Australian production is based on Trichogaster sp., imports would consist of Colisa sp. and Betta sp. (Glenn Briggs, Aquarium Industries, pers. comm., 2000).
The production has increased rapidly over the past three years due to an increase of the quarantine period to six weeks for gouramis (resulting from problems with a viral disease). Domestic production in 1994-95 was 87,000 (Willis, 1995), but has since expanded to an estimated 110,000 per annum. At least 12 species from the gouramis group are produced commercially, however, the Trichogaster spp. make up the majority of production. At present there are no data to suggest that any gouramis are exported from Australia. As gouramis are produced in very large numbers in the Asian region, it is unlikely that there will be any opportunity for Australian produced gouramis in the foreseeable future.

10.15.3.3

Producers’ profile

Willis (1995) conducted a survey of commercial producers and identified the following characteristics: • a variety of culture tanks are used, with combinations common; static culture systems were most common (62.5%), with recirculating systems also used (25%), and flow-through mainly used in pond culture (12.5%); • facilities were often housed in insulated buildings, with outdoor ponds and tanks used where climate allows; • operations varied in production from 2,700 to 3.3 million pa; and • 83% of farms surveyed indicated that they were expanding production capacity. The commercial production of ornamental fish is a relatively new industry to Australia, with commercial producers having an average of 4.9 years (s.d. 4.6 years) in the industry (PSM, 1999). Many operators entered the industry as hobbyists, with their breeding facilities expanding over several years into commercial operations (PSM, 1999).

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The greatest level of production of ornamental fish occurs in Victoria, where approximately four million fish are produced annually, with six culture permits currently issued. New South Wales has the second highest level of production with approximately 3.8 million fish being produced annually, and 17 culture permits currently issued. The other states and territories share the remaining balance of production.

10.15.3.4

Volumes and value

The production of ornamental fish has grown rapidly over the past ten years, with local production now accounting for approximately 50% of the Australian market (Rick Datodi, Aquarium Industries, pers. comm., 2000). Local production of ornamental fish is focused primarily on the production of exotic species to replace imports (Willis, 1995). Import data presented in earlier sections also support this growth in domestic production, with a notable decrease in imports during the corresponding period. There appears to be little seasonal fluctuation in ornamental fish sales in Australia, with demand fairly constant throughout the year (Humphrey, 1989; Willis, 1995). Retailers therefore, require regular shipments of fish on a weekly or fortnightly basis. In turn, wholesalers require regular shipments of fish to maintain their stocks of fish for retailers (Willis, 1995). This is an important issue for producers, who must ensure that the production and distribution of their fish provides for continuity of supply.

Table A1.26 Australian aquaculture production of freshwater ornamental fish
Year Native Species Number n/a 27,200 n/a n/a 24,400 85,400 103,200 Value n/a $130,700 n/a n/a $62,800 $132,500 $416,700 Exotic Species Number n/a 4,712,100 n/a n/a 4,295,900 3,869,400 4,872,900 Value n/a $2,295,200 n/a n/a $2,052,800 $2,177,300 $2,504,800 Totals Number n/a 4,739,300 n/a n/a 4,320,300 4,954,800 4,916,100 Value n/a $2,425,900 n/a n/a $2,115,600 $2,309,800 $2,921,500

1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 1996/97

Source : O’Sullivan (1998) n/a indicates data not available

Since the study by Willis (1995), local production of ornamental fish has continued to increase, as has the number of participants in the commercial breeding sector. Willis (1995) indicated that there were 34 licensed ornamental fish farms in Australia in 1994. Results of the PSM (1999) survey indicate that in excess of 100 licensed and/or commercial breeders of ornamental fish currently exist in Australia. Howe ver, it should be noted that not all licensed farms currently produce fish. A comparison of individual farm survey data between Willis (1995) and this study indicates that for five farms surveyed in both studies, production has increased by between 150% and 600% during the period between studies. Production of exotic tropical species and of Australian native species has dominated this growth. However, an industry survey (Willis, 1995) reported approximately twice the production of that determined by O’Sullivan (1998) (as shown in Table 5.19). Willis (1995) provides the following reasons for these discrepancies:
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• in some states ornamental fish producers are not licensed; • in some states production data are not collected, rather estimates from an industry representative are used; and • some producers understate their production. The data provided by Willis (1995) more closely match those provided by industry members (Greg Willis, Tasmanian Ornamental Fish Farm, pers. comm., 2000). The value of locally produced ornamental fish is considerably higher than for imported fish, even though the number of fish supplied is less (Lee, 1992; Willis, 1995). The average wholesale value of locally produced fish is about twice that for imported fish.
10.15.4 Exports of Ornamentals

The Australian Bureau of Statistics collects annual export data. Typically around 200,000 freshwater fish are exported each year (Table A1.27). However, the major increases in exports during 1992/93 and 1993/94 are considered to be due to the inclusion of native fish fingerlings (mostly silver perch, Bidyanus bidyanus) which were exported to China (through Hong Kong) and Taiwan for aquaculture purposes.

Table A1.27 Australian exports of freshwater ornamental fish
Year 1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98 Native Species 48,000 108,200 707,600 169,900 237,100 216,300 n/a n/a Exotic Species 3,800 5,700 272,400 1,247,200 3,400 7,400 n/a n/a Totals 51,800 113,900 979,900 1,417,100 240,600 223,700 369,900 95,270

Source: ABS (1999) n/a = data not available, as no longer separated by ABS

Survey data summarised in PSM (1999) indicated that only one of the producers surveyed in that study exported ornamental fish, exporting approximately 6,000 fish in 1998. Whilst this same producer was contacted as part of this study, no response was received. Discussions with another exporter, Mr Jared Patrick of Bay Tropical Fish Farm, indicated his willingness to assist GIAG with any export activities that may be undertaken. In addition to exports of cultured fish, exports of wild caught fish are known to occur. Unfortunately the data does not indicate the source of these fish. As previously indicated recent ABS data for ornamental fish exports appear to include the export of high value live fish for human consumption. This would explain the large increases in value in recent years, particularly in 1996/97 when large quantities were exported to Hong Kong.

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Table A1.28 Value of Australian exports of freshwater ornamental fish
Year 1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98 Native Species $600,000 $700,000 $1,200,000 $1,300,000 $1,300,000 $2,600,000 n/a n/a Exotic Species $50,000 $70,000 $100,000 $300,000 $50,000 $80,000 n/a n/a Totals $650,000 $770,000 $1,300,000 $1,600,000 $1,350,000 $2,680,000 $5,278,000 $1,329,500

Source: ABS (1999) n/a = data not available

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Table A1.29 indicates the number and value of exports to the ten major countries of destination for Australia for the past three years.
Table A1.29 Number and value of ornamental fish produced in Australia from 1989-90 to 1994-95
1989 - 90 Species Angelfish Anabantids Catfish Cichlids Goldfish Gouramis Koi Carp Livebearers Tetras Other Aust. Native Total Number Value ('000) ($'000) 37 32 nda 10 30 2,525 nda 1,010 258 nda 32 17 3919 nda 6 30 1021 nda 1,010a 72 nda 23 43 2237 1990-91 Number ('000) 90 10 30 32 2,719 10 2,012 110 nda 13.4 15.9 5032.3 Value ($'000) 85 6 18 31.4 1,072 6 2,012a 35 nda 11.1 62.8 3333.3 1991-92 Number ('000) 97 27 86 32.8 2,919 27 2,023 110 20 17.4 19.5 5351.7 Value ($'000) 95 13 34 28.7 1,141 13 2,023a 35 5.4 14.4 92.2 3481.7 1992-93 Number ('000) 102.5 71 102 36.8 3,268 51 2024 100 48 11 22.2 5785.5 Value ($'000) 98.3 39 40.3 27.1 1265 25 2024a 27 12.9 8 105 3671.8 1993-94 Number ('000) 102.5 100.5 159 69 3603.9 55.5 3060 105.5 58 62 25.2 7345.6 Value ($'000) 98.5 65.3 65.8 82 1306.9 27.3 3060a 29.9 15.3 54.5 116.2 4921.7 1994-95 Number ('000) 104 110.5 146 79 3703.9 87 3,260 140.5 69 65 31 7795.9 Value ($'000) 92.5 74.3 61.8 82 1391.9 56 3260a 43.3 21.3 57 128.6 5,268.70

Source : Willis, 1995 nda = no details available a = based on average farm gate value for Koi of $1 per unit after O'Sullivan (1992)

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Table A1.30 Australian exports of ornamental fish for 1997-98 to 1999 – Jan 2000
1997 – 98 Country of Destination China Germany Guam Hong Kong Japan Netherlands Singapore Taiwan United Kingdom USA Other Total
Source: ABS, 2000

1998 - 99 Num 4,944 4,581 19,480 11,939 11,248 6,335 3,325 2,715 6,639 23,199 5,365 99,770 Value ($'000) 14 34.429 102.46 131.346 335.697 38.854 33.404 36.454 78.298 433.376 29.358 1,267.676

1999 - Jan 00 Num Value ($'000) 15.311 0 329.443 242.254 18.884 2.7 39.358 49.346 309.359 34.549 1,041.204

Num 144 3,776 0 11,428 16,744 2,870 7,106 2,005 3,060 26,829 5,466 79,428

Value ($'000) 31.633 31.559 0 142.722 362.004 15.686 58.734 24.132 41.618 373.727 247.679 1,329.494

810 0 4,702 7,248 399 175 2,283 5,525 16,945 5,327 43,414

Table A1.31 provides data for the past three years exports for Australian states. These data indicate that Queensland is the major source of exports in Australia.

Table A3.31 Exports by state for 1997/98 to 1999-Jan2000
State 1997 - 98 Num Value ('000) 5,023 64.257 60,007 954.098 n/a n/a 3466 153.662 n/a n/a 10,761 155.815 1998 - 99 Num Value ('000) 5,709 39.99 90,825 965.039 75 47.498 1,697 107.427 n/a n/a 1,828 107.722 1999 - 2000 Jan Num Value ('000) 1,280 10.955 38,994 879.583 n/a n/a 189 38.15 1,790 10.42 1,371 189

NSW QLD SA VIC NT WA

Source: ABS, 2000 n/a = not available

The export of Australian native fauna and flora comes under the jurisdiction of Environment Australia (EA) [contact on 02 6274 1900 or http://www.ea.gov.au]. An export permit must be obtained before any native species can be exported. This permit is issued in accordance with the 1982 Act Wildlife Protection (Regulation of Exports and Imports) (see Appendix C for information on export of live Australian Native Fish), and fulfils Australia’s obligations under the Convention on International Trade in Endangered Species of Wild Fauna and Flora, referred to as CITES. However, there are several native Australian species that
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are exempted from these requirements, with the majority of these being commercial food-fish species. These species are listed in Schedule 4 of the Act. Once granted, the EA export permit must be presented to Australian Customs as permission to export. There are currently no export permits required from EA for the export of non-native species of fish. Further requirements may be necessary in the form of health certification, depending upon the destination country. Health certification is generally organised through state Primary Industries and Fisheries Departments, and may take the form of ongoing ‘disease free certification’ or one off healthy checks of fish prior to export. Therefore, depending on which overseas market is being accessed, no permit, one permit or two permits may be required (Max Caithness, AQIS, pers. comm., 2000).

10.16 Customer Survey Results
The survey conducted as part of this study aimed to enhance the information obtained through the normal channels as reported above by acquiring current information from the potential customers of GIAG. A total of 25 potential customers were surveyed and nine responses were received. While the number of respondents may seem low, they represent the major wholesalers (by volume and value) in Australia, which collectively supply more than 60% of the national wholesale market.
10.16.1 Purchasing Criteria

In any purchasing decision, there are a range of factors to be considered. These factors vary depending on the size of the purchase, whether the relationship will be ongoing, whether reciprocal arrangements apply etc. (Stanton et al., 1994; Hutt & Speh, 1995). Initial discussions with industry members suggested that whilst quality and price are the major purchasing criteria used by customers of ornamental fish, other criteria such as volume of fish, range of species or varieties of fish and consistency of supply were also considered during the purchase decision. The following table provides the rankings given to each purchase criteria. The highest ranking is shown as 1 and the lowest ranking shown as 5. The number of respondents selecting each ranking is shown in the table.
Table A1.32 Relative importance of purchasing criteria for potential customers
Criteria Quality of fish Price of fish Consistency of supply Range of species or varieties Numbers or volume of fish 1 5 0 0 0 0 2 0 4 1 1 0 Ranking 3 0 1 3 2 0

4 0 1 2 3 0

5 0 0 0 0 6

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Based on the outcomes of the survey, the order of importance of selection criteria are: 1. 2. 3. 4. 5. Quality of fish; Price of fish; Consistency of supply; Range of varieties of fish; and Numbers or volume of fish.

The respondents noted an additional criterion as being important to the purchase decision, namely the need for good communication between suppliers and customers. As live ornamental fish are highly perishable, sound communication between all parties in the delivery chain is vital to ensure the maintenance of product quality (Stanton et al., 1994; Willis, 1995). Communications regarding special transport requirements, water quality requirements of fish, and disease treatment history are usually important to the customer. Rowland and Cox (1999) also note the importance of good communication between producers and customers and suggest that the following points should be agreed to by both parties prior to ordering: • • • • • Volume of supplies; Quality of product and measures (ie. size, colours, fin shape, etc.); Prices; When and where fish delivery will occur; Terms of payment.

Communication should also include feedback regarding quality of product and service provided by the producer (Stanton et al., 1994). Hutt and Speh (1995) indicate that personal selling plays a major role in industry markets and that good communication helps to establish and perpetuate successful marketing channels. The issue of disease control in fish was also mentioned as an important purchase criterion. Fish in poor health or affected by disease are often of poor quality and exhibit low survival rates. This issue is of major concern to the industry (Shariff & Subasinghe, 1992; PSM, 1999). The feedback from the survey supports this. Two wholesalers indicated that Australian produced fish may be of good quality but can be delivered with low-level opportunistic parasite infections that cause subsequent mortalities. All losses incurred by customers impact on their profitability. High losses may substantially erode profit margins and result in wholesalers choosing not to purchase fish from certain suppliers (Shariff & Subasinghe, 1992; Willis, 1995). This would suggest that all new entrants must be aware of disease control methods and ensure their capacity to supply ‘clean fish’. The use of a formal quality assurance or disease free certification system is likely to be beneficial.
10.16.2 Market Perception of Locally Produced Ornamental Fish

The survey revealed that all respondents purchase fish from Australian producers. This confirms earlier work by Willis (1995), which suggested that the majority of wholesalers purchase fish from local producers. The survey also indicated that half of the respondents had recently changed suppliers to increase the variety of fish that they could in turn supply to the market. The volume of fish purchased from local producers varied considerably from 5 to 50% of turnover, with the four largest wholesalers purchasing approximately 50% of their turnover from local producers. It is unclear as to why smaller wholesalers purchase relatively less fish than large wholesalers, although it may be due to a requirement to purchase minimum orders from overseas suppliers to achieve reasonable economies of scale.
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The benefits or reasons for buying Australian produced fish revealed by customers include: • • • • Quality and range is improving for local fish; No quarantine requirements for local fish which frees up space in quarantine facilities; Some locally produced fish can not be imported, therefore local supplies are the only source; and Less transport stress leading to better quality and survival of locally produced fish.

A comparison of purchase criteria between Australian and imported fish is given in the following table.

Table A1.33 Comparison of purchase criteria between Australian produced and Imported Fish
Criteria Price Quality Consistency of supply Customer service Variety of fish Better 0 45 0 22 0 % of respondents Worse 56 22 33 11 100

Same 44 33 67 67 0

10.16.3

Impact of Changes to the Quarantine System

The survey also attempted to clarify the likely impact of the upcoming changes to AQIS importation regulations for ornamental fish. Unfortunately, the results provided were fairly ambiguous and gave no clear indication of what may happen. The majority of respondents indicate that the AQIS changes will have no impact on local producers of ornamental fish (see Table A1.34).
Table A1.34 Likely impact of changes to the Australian quarantine system
Criteria No impact or change for industry Increase the demand for local fish Increase the price for local fish Yes 33 33 45 Response No 67 67 55

Other likely results of changes to the AQIS regulations may include a reduction in price of imported fish and an enhanced capacity for importers to turnover fish more quickly through quarantine facilities. Both of these changes are likely to impact on the demand for locally produced fish. As previously indicated, the price local producers generally receive for their fish is based on the ‘true value’ of imported fish, when the additional costs of freight, quarantine etc. are included. Therefore, a reduction in costs associated with quarantining fish is likely to impact on prices for locally produced fish. Much of the recent increase in local production has been driven by the strengthening demand for locally grown fish, since importers have been limited by the size of their facilities and quarantine regulations (Greg Willis, Tasmanian Ornamental Fish Farm, pers. comm., 2000). The construction of additional quarantine
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facilities has been cost prohibitive or impractical for many importers, who have met increased demand for fish through locally produced fish (Rick Datodi, Aquarium Industries, pers. comm., 1999). Therefore, if importers are able to turnover fish through their quarantine facilities more quickly, more fish will be able to be imported over a given period of time. It would appear that this is likely to reduce the demand for locally produced fish. As a consequence of these opposing presumptions, it is difficult to determine exactly what the impact of new quarantine regulations will have on the industry at this time.
10.16.4 Potential market opportunities for GIAG

The following market opportunities have been identified by PSM Group through surveys of potential buyers in Australia. This information is based on unfulfilled demand identified by potential customers for various species. Consequently, it should be noted that these figures represent potential sales only, based on respondent’s estimates at the time of the survey (April 2000). Changes in pricing structures due to the forthcoming changes in AQIS regulations and the new tax system may affect the price and volumes quoted for these fish. The demand may also be affected by changes in production by current or future producers both in Australia and overseas.

10.16.4.1

Aquarium Industries Pty Ltd (Melbourne)

Aquarium Industries is the largest importer and wholesaler of ornamental fish in Australia, representing between 25 and 30% of the Australian wholesale market (Willis, 1995). They are largely regarded throughout the industry as the industry leaders in the supply and distribution of ornamental fish. The following table identifies market opportunities for supplying Aquarium Industries on a monthly basis.
Table A1.35 Potential demand by Aquarium Industries
Species Volume (no. per month) 60 200 150 300 300 3,500 500 500 500 500 4,000 4,000 4,000 4,000 22,570 Unit Price Value ($ per month)

Spangled perch Yellowtail Trumpeter Murchison River Hardy Head Golden Gudgeon Empire Gudgeon Mollies Assorted colours Mollies Colour varieties Mollies Sailfin (male 6cm) Mollies Lyretail Mollies Balloon Platys Swordtails Male Guppies Female Guppies Total
Source: Aquarium Industries

$1.00 $60 Depends on size and colouration Depends on size and colouration $0.80 $240 $0.80 $240 $0.40 $1,400 $0.40 $200 $1.00 $500 $0.50 $250 $0.50 $250 $0.35 $1,400 $0.40 $1,600 $0.50 $2,000 $0.28 $1,120 $9,260+

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10.16.4.2

Seaview Aquariums (Perth)

Seaview Aquariums is a retailer in Perth that imports some of its fish directly from overseas suppliers. They also act as a wholesaler and supply small amounts of fish to other retailers. Table A1.36 provides a summary of market opportunities for supplying Seaview Aquariums on a monthly basis.

Table A1.36 Potential demand for Seaview Aquariums
Species Frontosa (African cichlid) Livebearers Electric Yellows (African cichlid) Common goldfish Total
Source: Seaview Aquariums

Volume (no. per month) 20 3,000 100 860 980

Unit Price $10.00 to $15.00 $0.40 to $0.60 $3.00 to $4.00 $1.00

Value ($ per month) $200 to $300 $1,200 to $1,800 $300 to $400 $860 $2,560+

While the precise mix of species required is uncertain, it is likely that the fish imported would include species such as livebearers, cichlids, barbs and gouramis. These sales would be likely to be worth several thousand dollars per month.

10.16.4.3

Veba’s Aquarium Supplies (Perth)

Veba’s Aquarium Supplies is a small to medium wholesaler who also sells direct to consumers. The company is based in Perth and services retailers in Perth and surrounding districts. Table A1.37 provides a summary of market opportunities for supplying Veba’s Aquarium Supplies on a monthly basis.

Table A1.37 Potential demand for Veba’s Aquarium Supplies
Species Angelfish African cichlids Livebearers White clouds Total Volume (no. per month) 450 40 – 100 per species 1,000 150 1,600 Unit Price $0.80 $2.00 to $200.00 $0.35 to $0.60 $1.50 Value ($ per month) $360 $200 $350 to $600 $225 $1,135+

Source: Veba’s Aquarium Supplies

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10.16.4.4

Freeman Aquarium Supplies (Perth)

Freeman Aquarium Supplies is another Perth based importer of ornamental fish. Again they operate as both a wholesaler, supplying retailers in Perth and surrounding districts, and as a retailer selling direct to consumers. Table A1.38 provides a summary of market opportunities for supplying Freeman Aquarium Supplies on a monthly basis.

Table A1.38 Potential demand for Freeman Aquarium Supplies
Species Male Guppies Mollies Platies Swordtails Common goldfish Total Volume (no. per month) 1,300 450 900 450 2,200+ 5,300+ Unit Price $0.50 $0.60 $0.30 $0.45 $0.40 Value ($ per month) $650 $270 $270 $202 $880+ $2,272+

Source: Freeman Aquarium Supplies

10.16.4.5

Perth Aquarium & Display (Perth)

This respondent did not provide any details of quantities or values of fish that they may be interested in purchasing. They did however, indicate that they could purchase in the order of 3,250 to 4,500 fish of four species groups per month, representing their current level of sales. The prices they would pay for these fish would be equivalent to post quarantine costs for the same fish. Based on these responses, the following table has been developed to reflect possible sales of livebearers to Perth Aquarium & Display on a monthly basis.

Table A1.39 Potential demand for Perth Aquarium & Display
Species Male Guppies Mollies Platies Swordtails Total Volume (no. per month) 3,250 – 4,500 3,250 – 4,500 3,250 – 4,500 3,250 – 4,500 13,000+ Price ($0.00) $0.50 $0.60 $0.30 $0.45 Value ($) $1,625+ $1,950+ $975+ $1,462+ $6,012+

Source: Perth Aquarium & Display

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10.16.4.6

Other respondents

The remaining two respondents (Aquatic Solutions, Sydney and Petras Enterprises, Sydney), did not indicate any quantity or value for potential purchases. However, it would be reasonable to expect that these wholesalers would be interested in purchasing fish from GIAG, as they did express their willingness to purchase Australian produced fish. Both operators are medium sized wholesalers supplying ornamental fish nationally. It is likely that the magnitude of potential sales to these respondents would be higher than for the smaller Perth operators.

10.16.4.7

Conclusions

There are four major wholesalers operating in WA, each also operating as retailers. Estimates for the size of the WA market are in the order of 12 to 15,000 fish per week. However, the majority of fish sold in WA originate from wholesalers in the eastern states. Local wholesalers have a poor reputation, for the quality of their fish and do suffer high losses on occasions. This is largely attributed to poor management of fish and the sale of stressed fish. This may result in an opportunity to sell high quality fish direct to retailers in the WA market. When the potential purchases of the respondents is combined, the demand for ornamentals (across all species) is likely to be at least $21,000 per month ($250,000 per annum). However, it should be noted that these figures exclude potential sales to other wholesalers and retailers that did not respond to the survey.
10.16.5 International customers

A total of 19 international traders of ornamental fish from Europe, the USA and Asia were surveyed to determine potential export markets. The survey enquired as to whether they would purchase Australian native fish, the types of species and the volumes they would be interested in. They were also asked specifically about the market potential for the species identified initially for GIAG. Only four international dealers in ornamental fish responded to the survey. The respondents indicated that: • they were not in a position to purchase fish from Australia at present (1 respondent); • they already had a supplier in Australia (1 respondent); and • they only deal in marine fish and would be very interested in such species (2 respondents). The poor response may in part confirm earlier suggestions of the lack of exposure of Australian producers of ornamental fish in the international market. Australia is a very minor exporter (exporting 360,000 fish annually) and is therefore not widely considered as a player in the international market (Loo Jang Jing, Singapore DPI, pers. comm., 2000). However, discussions with exporters within Australia do suggest that there is a market for native fish and possibly some of the more expensive varieties of exotic species of ornamentals (Jared Patrick, PIJAC, pers. comm., 2000). One of the main concerns of overseas dealers with respect to Australian exports is that of price. In general, Australian produced fish are more expensive than similar fish produced overseas and market demand for Australian stock suffers accordingly (Jared Patrick, PIJAC, pers. comm., 2000). Additionally, Australian suppliers generally lack the capacity to consistently supply the volumes required to fill overseas orders (Rick Datodi, Aquarium Industries, pers. comm., 2000).

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Mr Jared Patrick (PIJAC, pers. comm., 2000) has expressed interest in assisting GIAG in the export of ornamental fish if it is economically viable to do so.
10.16.6 Other Findings from the Surveys

Other findings from the surveys can be summarised in point form: • Ornamental fish generally have a much higher value than food fish (due to the extra degree of quality control in production of ornamentals and the fact that they are sold live); • Typical prices for food fish are around US$3.00 per kg compared to ornamental fish at around US$300 per kg; • Ornamental fish farms are generally smaller units and are typically family based businesses (particularly in Asian countries) – larger corporate based farms are rare; • Distribution chains are long (typically five steps, ie. farmer, exporter, wholesaler, retailer, consumer); • This chain may be further extended through addition of country or city buyers (agents) who aggregate supplies of fish from farmers and collectors and then sell them to exporters; • Distribution is vitally important in terms of transit times which need to be minimised to ensure fish are alive and healthy on arrival; • Ornamentals can not be warehoused (unlike frozen and or canned fish goods), therefore production must be set to meet demand; • Many breeders operate on the ‘fringe’, producing variable numbers of fish – it is possible that many of these operators will be forced out of business with the introduction of the new tax system; • Market data are extremely time sensitive, with demand and supply constantly changing – fringe operators are constantly entering and leaving the industry, resulting in frequent fluctuations in the demand for different species.

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10.17 Worldwide Demand for Food Fish
10.17.1 World production - fisheries & aquaculture

The FAO publishes yearly statistics for world seafood (fisheries and aquaculture) production. According to their preliminary figures provided in the 1998 edition of the State of World Fisheries and Aquaculture (FAO 1999c), world fisheries and aquaculture industries produced 122 million tonnes in 1997, a new record (Table A1.40). The value of this production was determined to be in excess of US$52.5 billion.

Table A1.40 World Fisheries & Aquaculture production & utilisation
Production (million tonnes) Inland Aquaculture Capture Total Marine Aquaculture Capture Total Total Aquaculture Total Capture Total Utilisation (million tonnes) Human consumption Reduction
Source: FAO 1999c 1 Preliminary estimate

1990 8.17 6.59 14.76 4.96 79.29 84.25 13.13 85.88 99.01 70.82 28.19

1992 9.39 6.25 15.64 6.13 79.95 86.08 15.52 86.21 101.73 72.43 29.29

1994 12.11 6.91 19.02 8.67 85.77 94.44 20.77 92.68 113.46 79.99 33.47

1995 13.86 7.38 21.24 10.42 85.62 96.04 24.28 93.00 117.28 86.49 30.78

1996 15.61 7.55 23.16 10.78 87.07 97.85 26.38 94.63 121.01 90.62 30.39

1997 1 17.13 7.70 24.83 11.14 86.03 97.17 28.27 93.73 122.00 92.50 29.50

Over the past few years, there has been an increase in the percentage of production used for human consumption, rising to 92.5 million tonnes in 1997. FAO (1999c) reported that supplies for human consumption increased considerably, rising from 14.3 kg per capita (live weight equivalent) in 1994 to 15.7 in 1996. However, this increase was almost entirely due to increased production reported from mainland China. Excluding mainland China, FAO states that at 13.3 kg, the average food fish supply for the world in 1996 remained close to the level recorded during the first half of the 1990s but was lower than that of the 1980s. Catches destined for the production of fishmeal and fish oil (ie. reduction) contracted somewhat. According to FAO (1999b) which provided production data from 1988 to 1997, the contribution from aquaculture continued its upward trend with a total harvest (including aquatic plants) of almost 36 million tonnes (Mt), worth almost US$50.4 billion (B). Fish, crustaceans and molluscs contributed over 28.8Mt of the aquaculture harvest. A breakdown of the major species is provided in Table A1.41.

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Table A1.41 World aquaculture production and value 1997
Group Carps & other cyprinids Tilapias & other cichlids Salmonids Misc fish Penaeid prawns Misc crustaceans Oysters Mussels Scallops Clams cockles Misc molluscs Misc AQ vert’s / invert’s Brown seaweeds Red seaweeds Misc aquatic plants Total
Source: FAO, 1999b

Tonnes million 13.3 0.9 1.2 3.3 0.9 0.4 3.1 1.2 1.3 1.9 1.1 <0.1 5.0 1.8 05 ~36.0

US$ billion 14.3 1.3 4.2 8.8 6.1 1.8 3.3 0.5 1.8 2.5 0.6 <0.3 3.1 1.5 0.3 ~50.4

Again, the majority of the production originated from Asia, which accounted for almost 90% of the volume and 82% of the value. Europe contributed 5% and 9% respectively, whilst the figures for North America were 2% and 3%. Excluding figures for aquatic plant production, the most productive country was Mainland China (19.3Mt worth US$20.5 billion). Other countries with production values exceeding US$1 billion included: • • • • • • • India (1.7Mt and US$2.0 billion), Japan (0.8Mt and US$3.5 billion), Indonesia (0.7Mt and US$2.2 billion), Thailand (0.6Mt and US$1.9 billion), Bangladesh (0.5Mt and US$1.4 billion), Vietnam (0.5Mt and US$1.1 billion) and Norway (0.4Mt and US$1.0 billion).

Other major producing countries included USA, Republic of Korea, Philippines, France, Taiwan and Chile.
10.17.2 Outlook : Supply and Demand Trends

At the 1995 Kyoto (Japan) Conference on the Sustainable Contribution of Fisheries to Food Security, a review was presented by FAO which gave a conservative estimated demand for food fish in the year 2010 (at 1990 constant market prices) in the range of 110 to 120 Mt (live weight). This represents a significant increase over the figures of 76 to 80 Mt in 1994/95.

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The FAO also predicted that demand for fish for reduction would remain stable at between 30 and 33 Mt over the next few years. Thus, the projected demand for fish (including crustaceans, molluscs, etc.) for all uses would be in the order of 140 to 150 Mt for 2010. However, FAO (1999c) provided some interesting predictions for the short-term including: • the slowdown in growth of fish supplies that started in 1997/98 is likely to continue for a few years (mostly due to stable or decreased landings and slower growth of aquaculture); • negative impact was expected to decrease production in at least 1998/99 and this was expected to take some time to recover; and • drops in demand, particularly in Japan and other Asian economies, was expected to stagnation in the international trade in high-value aquaculture production. In addition, FAO (1999c) predictions for the medium-term included: • real prices for fish, crustaceans and molluscs are predicted to stabilise over the next 15 years; • competing livestock products, particularly poultry and pork, are becoming significantly cheaper causing a shift away from seafood; and • a slow down in population growth, particularly for Asia. Thus, based on a scenario of modest reductions in the per capita demand in Europe (down by 6 per cent compared with 1995), North America (- 4%) and Asia (- 8%) and incorporating the effect of a smaller population, the demand for food fish in 2010 may be 105 to 110 million tonnes (live weight equivalent). The FAO suggested that it was probable that aquaculture production will have reached between 35 million and 40 million tonnes of finfish, crustaceans and molluscs by the year 2010 (an increase of over 6 million to 11 million tonnes on the figures for 1997). They also suggested that the capture fisheries could show a modest increase to between 95 million and 100 million in the same period (an increase of over 1 million to 5 million tonnes on the figures for 1997). Of this, some 30 million tonnes could be used for the production of fishmeal and fish oil. In conclusion, they suggested that whilst the short-term prospects were for a slowing of demand, the medium-term prospects were better. However, the demand-induced upward pressure on prices will be weak. On a more positive note, even without the stimulus of higher real prices, aquaculture production is likely to increase even further. Before closing on this discussion, it should be recognised that Australia currently produces just over 0.2 million tonnes a year, this is less than 0.002% of world aquaculture and fisheries production. The actual figure for food finfish production is even LOWER than that.

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10.18 The Australian Market for Food Fish
10.18.1 Demand for Food Fish in Australia

Before discussing the demand for food fish, an assessment of the production, exports and imports needs to be undertaken. As for the previous section, the discussion concentrates on the total market (ie. finfish, crustaceans and molluscs), although some specifics on finfish are provided where appropriate.

10.18.1.1

Production

ABARE (2000) contains the 1999 edition of the annual Australian Fisheries Statistics which reviews production from 1996/97 until 1998/99. This shows strong increases in both the value and tonnage production for both the aquaculture and capture fisheries sectors. The share of the gross value attributable to aquaculture rose to around 30%, with increases across a number of species, including tuna, salmon and prawns.
Table A1.42 Production & value of Australian fisheries (capture & aquaculture) 1996/97 to 1998/99
Type Production (‘000 tonnes) Capture Aquaculture Total Value ($million) Capture Aquaculture Total
Source : ABARE, 2000

1996/97 288.5 27.1 315.6 1,359.5 433.8 1,776.2

1997/98 298.1 28.3 326.4 1,402.6 504.3 1,879.0

1998/99 305.9 32.1 338.0 1,485.3 602.1 2,038.5

These data contain both edible (eg. abalone, rock lobster, shark, etc.) and non-edible (eg. pearls, skins, fish meals, ornamental fish, etc.) products. However, hatchery production is NOT included. In 1998/99, almost half of total production was from finfish (ie. 143,196 tonnes) at a value of almost $650 million. The main species group is tuna ($223 million and 17,255 tonnes). Native food finfish contributed a minute part of this production.

10.18.1.2

Exports

ABARE (2000) reported that gross value and tonnage of exports (from capture and aquaculture sources) increased during the period 1996/97 until 1998/99 (Table A1.43). Again, these data contain both edible and non-edible products, but NOT hatchery production. The main countries of destination have been Japan, China, Chines Taipei, Hong Kong and the United States, which together accounted for 90% of Australian exports in 1998/99. This dominance has remained fairly constant over the past five years, although the relative importance of individual countries has changed.

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Table A1.43 Tonnages and value of Australian exports from 1996/97 until 1998/99
Type Tonnages (‘000 tonnes) Edible Non-edible Total Value ($million) Edible Non-edible Total
Source : ABARE, 2000 n/a = not available

1996/97 55.6 n/a > 55.6 1085.5 219.3 1304.9

1997/98 57.4 n/a > 57.4 1181.4 308.1 1489.4

1998/99 61.6 n/a > 61.6 1223.8 287.6 1511.4

ABARE (2000) reported that the Asian economic downturn did not adversely affect the majority of Australian fisheries exports during 1998/99. The volume of most seafood exports increased, although export unit values declined for a number of products. This resulted in a fall in the value of sales for all of the major commodities except tuna, finfish and rock lobster. In 1997/98, the major component of the exports was for tuna (8,529 tonnes for $120 million), although salmon contributed over 1,000 tonnes worth $11.3 million). Native food finfish contributed a minute part of these exports.

10.18.1.3

Imports

According to ABARE (2000), imports supply around 60 per cent of all seafood consumed in Australia. They suggested that originally, imported seafood products met the demand from segments of the Australian market that the domestic production could not supply because of resource constraints. However, recent imports have been increasingly competitive in other market segments.
Table A1.44 Tonnages and value of Australian imports from 1996/97 until 1998/99
Type Tonnages (‘000 tonnes) Edible Non-edible Total Value ($million) Edible Non-edible Total
Source : ABARE, 2000

1996/97 121.4 >69 >190 601.6 100.3 701.9

1997/98 124.0 >69 >193 688.8 130.8 819.6

1998/99 132.4 >87 >219 743.2 135.2 878.4

There was a 7% increase in the value of these imports in 1998/99, with some $441 million of edible fish products ((7,600 tonnes), $303 million of edible crustaceans and molluscs (34,800 tonnes) and $135 million of non-edible fisheries products.
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ABARE (2000) said that over the past decade the total volume of seafood imports has risen 40% to over 132,000 tonnes in 1998/99. Over that time there has been no significant change in the composition of imports by product type. The major sources were Thailand (32% of total import value) and New Zealand (19%). In 1998/99 imports of edible finfish products was over 97,500 tonnes, worth some $440 million, major species included salon, tuna and hake. Native food finfish did not contribute to any part of these imports.
10.18.2 Production of Native Food Fish

A number of native fish are being commercially cultured in Australia. For the purposes of this report, barramundi (Lates calcarifer) is NOT considered a native fish. Note also that several other species are under experimental culture.
Table A1.45 Species of native Australian finfish under culture & production data estimates for 1997/98
Scientific name Macquaria ambiqua Bidyanus bidyanus Macquaria novemaculeata Maccullochella peeli peeli Macculochella ikei Tandanus tandanus Macquaria australasica Macquaria macquariensis Macculochella peeli mariensis Oxyeleotris lineolatus Hatchery production (‘000s) 1,174.8 678.9 396.5 301.8 40.0 18.1 Yes Yes Yes Yes Food production (tonnes) 87.1 165.3 Yes 1.5 0 Yes 0 0 0 0

Common name golden perch silver perch Australian bass Murray cod eastern cod eel-tailed catfish Macquarie perch trout cod Mary River cod sleepy cod

Source : O'Sullivan and Roberts,1999

The following is extracted from O'Sullivan and Roberts (1999) which overviewed the status of production for the 1997/98 financial year: Over 165 tonnes of market sized (300 to 500 grams) silver perch were produced whilst golden perch production exceeded 87 tonnes. In addition, a small amount of Murray cod was produced. Market prices fell for silver and golden perch but were the highest for live fish ($15/kg) while gilled-gutted fish averaged $8 to 12/kg depending on which state it was sold in. The prices for Murray cod were in excess of $20/kg, however, only a small amount (1.4 tonnes) was sold. The combined value of food fish production and fingerling sales (see below) was approximately $3.9 million, an increase of over $1.4 million over the total for the previous year. The Feb/March 1999 issue of AAM reported that NSW Silver perch production had tripled and that this trend was expected to continue. Farmers of silver perch were still suffering problems with off flavour, leading to calls for the need to establish strict quality control and a more professional approach to marketing. The live fish trade continued to achieve the best prices. Variety seemed to be the key to success; some farms were incorporating growout of silver perch, golden perch, trout, and yabbies with tourism.
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The June/July 1998 issue of AAM reported that the NSW Silver Perch Growers Association had moved to unify the farms to create a much more stable market place for growers. It was agreed that there was a need for industry to become united across Australia concentrating on providing quality product and initiating strategies for long-term marketing. Prospects Once again the drought caused problems in some areas, although the greatest problem was product quality; off flavours and poor handling practices resulted in low market acceptance of silver perch. However, there were some improvements in husbandry and handling resulting in increased demand and market value. With more effort going into growing Murray cod in tanks, it is expected that production and value will lift considerably. The ‘take home message’ of that article was that production of native food fish is rapidly increasing, particularly in the eastern states. In Western Australia, total 1997/98 production was around three tonnes, although a substantially higher biomass of fish is thought to have been produced. Since then, a major expansion in the number and size of ponds and dams stocked is believed to have occurred.
10.18.3 Demand for Native Food Fish in Australia

To date, native food fish producers have been moderately successful at producing quality fish at target production levels. However, the results of their marketing efforts have been far less impressive. Several of the larger growers (and a couple of grower networks) have incurred difficulties in selling product, due to the need to develop a new markets for the product. Whilst these species are well known as recreational fish (ie. they are caught for own-home use), native food fish are only relatively new to the restaurant and catering markets. The difficulties faced in developing these markets are demonstrated in extracts from O’Sullivan (2000) which reported on the discussions from two workshops held in Victoria and South Australia in early 2000 on Murray cod aquaculture: Market development was flagged as one of the main problems facing Murray cod growers. Promoters of some culture systems had been using market prices of around $30/kg as an indication of the profitability of growing Murray cod in tanks. Delegates were told that whilst the fish had good market appeal, both locally and for export, maintaining a high (>$10/kg) farm gate price would be difficult. “The Murray cod has a number of great product attributes,” said Anthony Forster (Fisheries Victoria). “These include a striking external appearance, a flesh that suits Asian tastes (steamed or larger banquet-sized fish), low to medium fat levels, high omega 3 fatty acid levels and a high protein rating. In addition, there were exciting market images, such as the mythology of its association with indigenous people, the fact that is Australia’s largest freshwater fish, and reports (from Asia) of potential aphrodisiac effects due to its slimy coating! This was resulting in increasing interest from Asia and comparisons with the premium mandarin fish.” Brendan Larkin (MAFRI Extension Officer) said that an examination of Sydney (main) and Melbourne fish markets for wild caught Murray cod, showed dramatic changes in supply and prices associated with supply (closed seasons). The range was from around $4/kg up to $30/kg with an average of $19 for small quantities (ie. in the range of 100 to 500kg/day). “At present around 25 farms
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in three states have production, although only seven farms were selling table fish,” he said. “Aquaculture product in small amounts showed higher prices, presumably due to improved quality.” A local market assessment undertaken by Victorian Fisheries found good feedback for its firm white flesh and the fact that bones were not a problem, with limited overseas feedback also being positive. However, with increased domestic production (four states), it was predicted that there would be a downward price trend without appropriate promotion. Kate Stoney (Regional Marketing Officer, Agribusiness Initiative for DNRE) said that market taste test evaluations had been undertaken in Singapore, Taiwan, Japan and Hong Kong through Austrade, together with regular market visits. “This work included an investigation of a cross section of the supply chain from wholesalers right through to the chefs. Meals were prepared in both Chinese and Western Styles and presented in restaurants to provide appropriate settings. The test panel suggested that the firm flesh was good to work with, and well suited to Chinese and western cuisine. They also indicated that Murray cod would generally be best served whole. However, there were differences in the prospects for the four countries." The broad feedback from these trials had important messages for all Australian seafood producers: • Whilst the taste was considered very good and unique, price was a very important factor, ‘new’ (unrecognised ) species normally attract very low species. • Australia is seen as a favourable source of healthy, safe and high quality products. • Competition is very strong from local species and imports (both farmed and wild caught) Discussions with Austrade officials also suggested that to encourage export sales, the industry would need to undertake substantial market development. This point was emphasised when Anthony Forster discussed the development of the barramundi culture market over the past decade. He said that since 1990/91 there has been a four-fold increase in production (to almost 700 tonne p.a.), with a small consequential fall in wholesale price from $12/kg down to $10/kg. Even though there had been an existing market (for wild caught fish), maintenance of a premium market price was only achieved through the development of a major marketing plan including a lot of promotional material. Kate Stoney recommended that an attractive market name be selected, for example “river cod” and rather than calling the product “farmed”, it could be simply called “fresh”. The fact that it was produced in clean natural environment in Australia was another selling point overseas. The development of select menus and recipes should be undertaken as well as product brochures designed for importers/buyers. “Industry will need to provide a lot of samples for further promotion and the suppliers must visit the market to see what is happening. Ongoing market research would be required to test the marketing strategy and all suppliers would need to develop consistent quality and quantity to meet the needs of the export market. Peter Hansford (Manager, Trade Development and Regional Marketing) said that copying the success of others was no guarantee of success for a new industry. He also pointed to the high startup costs that the industry would need to incur. “Considerable start up capital is required for R&D, the establishment of QA (quality assurance) processes and market development activities, which is generally beyond capacity of any one producer to bear.”

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The ‘take home’ message of that article was: • market development must be undertaken to ensure that supply does not continue to overtake demand; • to maintain premium prices, quality and consistency of supply are critical; and • export markets will be difficult to access.
10.18.4 Demand for Advanced Juveniles

Parts of the following are extracted from O'Sullivan and Roberts (1999): In 1997/98 fingerlings of several species of native freshwater fish were produced by Government and private hatcheries. The major market for the hatchery-reared native fish fry was for stocking private farm dams or for release into public waterways to improve recreational fisheries. Approximately 2.6 million fingerlings were produced for sale to angling clubs for stocking popular fishing areas or for private farm dams. This represents a slight decrease over the figures for the previous year. Increasing numbers of golden perch and Murray cod were produced as more hatcheries were established. Prices decreased, varying from $1.20 to $0.33 each depending on species, sizes (lengths), volumes purchased, and the State in which the fish were sold. However, these data do NOT represent the major market for fingerlings that are being sold to commercial farmers. The size of this market can be determined by examining the food fish production, which was in excess of 250 tonnes in 1997/98. Assuming an average size of 400g (live weight, range from 300g up to 500g), we can estimate that over 625,000 fish were harvested. If the reports of average mortality rates of 25% from fingerling to market are accepted (although it is likely that this is much higher on new farms with inexperienced operators) then the estimated fingerling market was close to one million individuals in 1997/98. Given major increases in the numbers of farms being established and a significant increase in the number established operators, it is likely that the actual annual market exceeds five million currently, with approximately one million fingerlings stocked in NSW alone (Bruce Malcolm, Uruah Fisheries, pers. comm., 2000). The most common species utilised are Murray cod, silver perch, golden perch and Australian bass, with interest increasing in several Queensland species such as Barcoo Grunter (Lindsay Hopper, Aquasonic, pers. comm., 2000). The typical size of fingerlings at sale is around 1 to 3 g at approximately eight to twelve weeks of age. At present, the majority of farms are in the southern (temperate) parts of Australia (ie. NSW, Victoria, SA and southern WA). The temperatures experienced in these areas, which are in the range of 10°C in winter up to a maximum of 22°C in summer, are such that growout periods of 14 to 18 months are required for the fish to reach their market size of around 500 to 600g. This problem is exacerbated since fingerlings are usually only available after mid summer, when the average water temperatures begin to fall. This means that the fish typically require two summers for growout. As a consequence, a market exists for advanced fingerlings; that is, fish that have been over-wintered in warmer conditions and are over 100g in weight. If fish of this size are available in the spring, then growout to market size can normally be achieved before the winter mont hs. (Of course there will always be a proportion of slower growing fish that could not be harvested until the end of the year).

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The market requirements for advanced juvenile fish are: • • • • graded with a maximum 15% size variation; health certified (i.e “free of specific diseases”); weaned onto the particular food (pellets) used by the buyer; acclimatised to the particular growing conditions of the buyer (eg. water temperature, salinity and pH).

It is unlikely that advanced juveniles produced in WA could be transported at a cost that would allow them to be competitive in the eastern states. As a consequence, it is probable that the market for these animals would be within the state.
10.18.5 Market survey for advanced juveniles

To further assess the potential markets for advanced juveniles in WA, market intelligence regarding advanced juveniles was obtained through surveys of potential purchasers. Potential purchasers of advanced fingerlings were identified as the 46 licence holders in WA, as of 8 May 2000 (see Contacts list). However, it was found that many of these licence holders were not producing fish at the time of this study. Discussions with industry and WA Fisheries identified several key players in the industry who were contacted, as well as several smaller operators and two interstate suppliers of fingerlings. Due to time differences and the operating practices of growers there was some difficulty in contacting growers. Therefore, a combination of phone interviews, contact by fax and email were used. Messages were also left where possible. The following table lists the contacts made with growers during this study.
Table A1.46 Contacts made for advanced juvenile study
Contact method Phone interviews Fax or email Left messages or could not be contacted Total Number contacted 5 7 13 25 Number of replies 5 3 0 8

10.18.5.1

Number of farms

There are two levels of licenses available for the culture of silver perch in WA. Domestic license holders may keep fish in farm dams or tanks for non-commercial purposes (stocking purposes). There are between 180 and 200 domestic license holders in WA at present (Dan Machin, Fisheries WA, pers. comm., 2000). Since fish kept by these license holders are primarily for stocking purposes, it is unlikely that there is any potential to supply advanced fingerlings to this sector. The second sector is that of commercial licence holders or growers. Data from WA fisheries as of 8 May 2000 suggests there are 46 commercial licence holders for silver perch. However, the number of growers operating commercially or semi-commercially is difficult to ascertain. Dan Machin of Fisheries WA (pers. comm., 2000) suggests there may be less than nine key players in the WA industry at present, with industry members suggest there may be up to 20 commercial operators (Nathan Ellard, silver perch hatchery and
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grower, pers. comm., 2000). Several industry members also commented on the trend of marron farmers moving to production of silver perch. While there are no data to confirm this, suggestions from industry indicate this trend is due to: • • • • easier management and production of silver perch than marron; lower production costs for silver perch; better market prices; and stronger market demand.

There are no data to indicate the area of water under culture at present. However, discussions with industry suggest that this is increasing. Industry members surveyed indicated that they were intending to expand 1999/2000 production levels by between 20% and 300%. It should also be noted that many growers are new to the industry and are relatively inexperienced (Paul Harrison, silver perch hatchery and grower, pers. comm., 2000). Management and production techniques are therefore likely to be suspect for many operations, often leading to poor survival and growth rates (Nathan Ellard, silver perch hatchery and grower, pers. comm., 2000). Processes that simplify the management of farms and increase survival and growth rates of fish are therefore likely to have a significant impact on the profitability of many of these operations. The supply of advanced fingerlings is one method that is likely to provide beneficial results.

10.18.5.2

Target species

As previously mentioned, there are several species of Australian natives used for food fish production. At present, silver perch are the only interstate native freshwater species being cultured in WA. Whilst there is interest in other interstate native species such as Murray cod and golden perch, there are issues associated with translocation of species to be overcome before licenses would be made available for their import. To enable these and other species to be produced, translocation issues will need to be resolved. Such issues are likely to include limitations to areas that they can be cultured and specific farm infrastructure to prevent release of these fish into the wild (Dan Machin, Fisheries WA, pers. comm., 2000).

10.18.5.3

Food Fish Production

Production of silver perch is limited in WA at present, with official estimates of production for 1999 at approximately 1 tonne (Dan Machin, Fisheries WA, pers. comm., 2000). Industry estimates based on discussions by growers at WA Silver Perch Growers Association indicate that production is much higher, with estimates of up to 6 tonnes produced annually (Nathan Ellard, silver perch hatchery and grower, pers. comm., 2000). One grower reported a current level of production of 2.2 tonnes (Rod Bamess, President WA Silver Perch Growers Association, pers. comm., 2000) for his operation.

10.18.5.4

Fingerlings supply

There are several hatcheries producing fingerlings in WA, with at least three hatcheries supplying fingerlings to commercial growers and domestic stockers (Nathan Ellard, silver perch hatchery and grower, pers. comm., 2000). Discussions with two of the three commercial hatcheries suggest there was at least 400,000 fingerlings produced in WA last year. However, one operator indicated that their production would be increasing by at least another 250,000 fingerlings next season (Nathan Ellard, silver perch hatchery and grower, pers. comm., 2000)). Industry sources indicate that demand for stock could increase to one million fingerlings in the next two years (Paul Harrison, silver perch hatchery and grower, pers. comm., 2000). The current shortfall in seed stock supplies is sourced from the eastern states (Nathan Ellard, silver perch
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hatchery and grower, pers. comm., 2000). Fingerlings supplied from eastern states are shipped via airfreight to Perth airport, where they are picked up by purchasers (Bruce Malcolm, Uarah Fisheries, pers. comm., 2000). Based on discussions with eastern suppliers, there are approximately 200 to 250,000 fingerlings supplied to WA (Bruce Malcolm, Uarah Fisheries, pers. comm., 2000). Fingerlings supplied to WA farmers are generally airfreighted to Perth airport for collection by farmers. The price of fingerlings varies slightly between producers and for the size of fish. Prices range from 25 to 28 cents for ‘bulk order’ 25 mm fish (5,000 to 50,000) landed Perth. Most interstate suppliers provide discounts for larger orders (Bruce Malcolm, Uarah Fisheries, pers. comm., 2000). Prices of locally produced fingerlings are 35 cents for 25 mm fingerlings for orders of 1,000 to 20,000 fingerlings (Paul Harrison and Nathan Ellard, silver perch hatchery and growers, pers. comm's, 2000). For orders of 20,000 or more fingerlings prices drop to 32 cents per fingerling. Larger fingerlings are available latter in the season, with prices rising to 80 cents for a 50 mm fingerlings up to 90 - $1.20 for 50g fingerlings (Nathan Ellard, silver perch hatchery and grower, pers. comm., 2000). Fingerlings are generally available throughout the summer and autumn months (January to April), with small numbers available from October to December (Paul Harrison and Nathan Ellard, silver perch hatchery and growers, pers. comm's, 2000). However, hatchery operators are endeavouring to produce fish ‘out of season’ and hope to lengthen the fingerling season.

10.18.5.5

Advanced Fingerling requirements

The use of advanced fingerlings for stocking is being discussed by several growers at present in WA, with several hatcheries gearing to supply (Nathan Ellard, silver perch hatchery and grower, pers. comm., 2000). However, while the concept is sound and accepted by some producers as a way of increasing farm productivity and profits, there is a fair degree of resistance to the concept. Similarly in eastern Australia, some farmers do not see the benefit to stocking advanced juveniles primarily due to their reticence to accept the relatively high price of advanced fingerlings (Bruce Malcolm, Uarah Fisheries, pers. comm., 2000). As previously indicated, many growers are relatively new to the industry and operate on a part-time basis or on low budgets. These growers are likely to have limited funds for purchase of fingerlings and generally opt for purchasing as many fingerlings as possible, rather than purchasing larger, more expensive advanced fingerlings (Nathan Ellard, silver perch hatchery and grower, pers. comm., 2000). A common theme expressed by several growers surveyed was ‘what are the actual benefits of advanced juveniles and how much time and money will the use of advanced juveniles save me?’ (W. Brown, silver perch grower, pers. comm., 2000). It is likely that the answers to these and other questions will be critical to the potential sale of advanced juveniles. Therefore, producers of such stock will need to develop an understanding of the benefits. This may require that experimental trials are undertaken to develop ‘hard data’. Information sheets including these ‘hard data’ and ‘cost benefit analysis’ may be vital to selling the concept. Such work could be done in conjunction with Fisheries WA or other impartial scientific institutions to ensure the validity and veracity of the findings.

10.18.5.6

Numbers

Several of the growers surveyed indicated that they would not purchase advanced fingerlings at this time, mainly due to the higher cost. Of the growers who indicated they would be interested in trying them, the numbers indicated were small, ranging from 5,000 to 20,000 per farm initially. In the absence of supporting data, initial sales numbers would be expected to be small while farmers undertook their own trials to
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determine their benefits. Future sales would then be largely dependant of growers acceptance of the concept. The expected higher survival of advanced juveniles over fingerlings may also result in a reduction in numbers of fish that growers need to stock to produce a given level of production (Nathan Ellard, silver perch hatchery and grower, pers. comm., 2000). Sales of advanced juveniles would be expected to replace some proportion of current and future fingerling sales in WA. As growers currently purchase an estimated 250,000 fingerlings per year (based on 50% of 500,000), sales of advanced juveniles could exceed 250,000 per year at current growout production levels. However, it is unlikely that full substitution will ever be achieved due to grower’s reluctance to pay the higher prices. Sales in the order of 25,000 to 50,000 could be achieved for “experimental stocking” purposes in the first year, possibly rising up to 30 or 40% of total stock requirement in later years if these experiments proved successful.

10.18.5.7

Size and Price

The preferred size of advanced fingerlings indicated by those surveyed was 50g and 100g, subject to price. Industry sources suggest a range of prices for a 50g advanced fingerlings; ranging from $1.00 each (Paul Harrison, silver perch hatchery and grower, pers. comm., 2000), $1.20 each (Rod Bamess, President WA Silver Perch Growers Association, pers. comm., 2000), and $2 each (Nathan Ellard, silver perch hatchery and grower, pers. comm., 2000). No prices were given for 100g advanced juveniles, although one farmer indicated that the current market price per kg could be used. As this is a relatively new approach to stocking, there are no standard prices set at present. Prices are likely to be largely governed by the availability of advanced juveniles and the cost benefit to growers.

10.18.5.8

Species

Due to translocation issues already discussed, silver perch are the only species available to growers in WA at present. Most growers surveyed indicated that until translocation issues are addressed it is not worth considering other species. However, interest was expressed in Murray cod (W. Brown, silver perch grower, pers. comm., 2000).

10.18.5.9

Time or Date of Delivery

Most growers indicated that the seasonal nature of the supply of fingerlings often hinders the management of their farms and can play a role in continuity of production throughout the year. Growers would like to see increased availability early in the growing season to maximise the growout size during the season. Several growers suggested that early October would be the optimal time for stocking. Clearly, this timing corresponds with the onset of spring when water temperature start to increase, thereby providing growers with the opportunity to maximise growth during the growing season. By growers seeking the opportunity to stock fish as early in the season as possible, strengthens the case for use of over-wintered juveniles.

10.18.5.10 Transportation requirements
The basic principals of transportation of native fingerlings are similar to those for ornamental fish species, generally involving the use of plastic bags filled with water and oxygen and fitted into cardboard or polystyrene boxes. However, native fingerlings are somewhat more forgiving in respect of their higher tolerance of temperature variations and are therefore more commonly transported by road over relatively short distances (ie. for up to 12 hours) (Bruce Malcolm, Uarah Fisheries, pers. comm., 2000). A combination of road and airfreight transport is also used successfully by many hatcheries. Fingerlings packed correctly and handled properly can be expected to survive for up to three days in transit (Bruce
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Malcolm, Uarah Fisheries, pers. comm., 2000). Malcolm would be:

A typical transportation regime described by Bruce

1. Starving fish for at least 24 hours prior to transport; 2. Prophylactic treatment of fish for parasites; 3. Packing of 100 to 150g fingerlings at 25 to 35 mm, in approximately 12 litres of water and 24 litres of oxygen; and 4. Shipping via road or airfreight for 24 hours. Transportation of large numbers of fish is often performed in fish transport trucks. However, this method may not be cost effective over long distances (ie. from NSW to WA) (Bruce Malcolm, Uarah Fisheries, pers. comm., 2000).

10.18.5.11 General findings
As a result of discussions with hatchery operators and growers, the following points can be made about the WA native fish industry: • the industry is static or slowly expanding, however, hatcheries report a significant increase of interest in commercial production of silver perch; • the industry is probably at least five years behind the eastern states in terms of experience and expertise; • market access and continuity of supply is a problem for many growers, hatcheries or larger growers may need to act as a central depot or cooperative for marketing and distribution of end product; • production is limited by a lack of production capacity, due to poor cash flows and lack of capital investment; • there is a degree of resistance towards the use of advanced fingerlings (largely due to their cost), and it appears the majority of survey respondents were unaware of or would not accept the advantages of advanced fingerlings; and • many growers are part-time or semi-commercial operators that are relatively new to the industry, and as a consequence, management practices are often poor.

10.19 Summary of Market Profile Findings
The discussion presented so far in this section provides detailed information regarding the domestic and international markets for ornamental fish and the domestic market for advanced juveniles for native food fish production. This information is summarised in Table A1.47 which demonstrates that from an market viewpoint, the most appropriate candidate species groups for the INITIAL PRODUCTION STAGES for GIAG are likely to be: • fancy goldfish; • livebearers; and • Saratoga. Overviews are also presented on each of the three markets available to the GIAG members, ie. local, interstate or export.
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Table A1.47 Summary of Market Assessment
Species Grouping Value Local Market Share Interstate Export Local Opportunity Interstate Export Local Market potential Interstate Export Ranking

Cichlids Catfish Common goldfish Fancy goldfish Koi carp Gouramis Livebearers Tetras Barbs Walking fish Rainbows Saratoga Other natives Native (advanced) juveniles

2,3,4 2,3 1 2,3,4 2 2 1,2 1,2 2 2,3 2 4 2,3 2

1 1 2 1 1 1 2 2 2 0 1 0 0 *

1 1 2 1 1 1 2 2 2 0 1 0 0 *

1 1 2 1 1 1 2 2 2 0 0 0 0 *

1 1 0 2 1 1 2 1 1 0 1 2 1 1

1 0 0 2 1 1 2 1 1 0 1 2 1 0

0 0 0 0 0 0 0 0 0 0 1 2 1 0

1 0 1 1 0 1 3 0 0 0 1 1 0 ?

0 0 0 3 0 0 3 0 0 0 1 1 0 0

0 0 0 0 0 0 0 0 0 0 0 1 1 0

C C B A C B A C C C B A C B

LEGEND Farm Gate Value: 1 = up to $0.40 each 3 = $2.00 to $10.00 each 0 = nil or close to nil 2 = More than 20% of market 0 = Diminishing L = Local Market 0 = Limited no. only 2 = 1,000 to 4,000/month A = high market potential 2 = $0.40 to $2.00 each 4 = more than $10.00 each 1 = less than 5% of market * separate market 1 = Static I = Interstate Market 1 = less than 1,000/month 3 = more than 4,000/month B = medium market potential C = low market 2 = Expanding E = Export Market

Market Share:

Market Opportunity: Market Type: Potential sales (no. fish):

Ranking potential:

Assessment assumes that ease of market access (quarantine, transport costs, transportability) declines from local to interstate to export.

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10.19.1

Export Markets for Ornamentals

10.19.1.1

Overview

The international market for ornamental fish is well established throughout the western world with more than 100 million hobbyists and an international trade expanding at an average rate of 14% per annum. The major markets for ornamental fish are the industrialised western economies, which are characterised by high population densities and cool climates, including Germany, Britain, France, the Netherlands, Japan and the USA as well as Australia. The market is supplied with a vast range of different species and varieties of fish, with in excess of 3,000 fish and invertebrates currently available. Tropical freshwater species account for over 85% of the worldwide ornamental market. Statistics for actual fish numbers and species traded are difficult to find and figures quoted are generally for value only. Estimates of retail sales of ornamental fish suggest values around US$3.0 billion per annum, the wholesale value is probably more than US$900 million. The importance of wild caught fish is decreasing due to improvements in breeding and production technology, with 80 per cent of species now being produced on farms. The main suppliers of wild caught fish are now South American countries. At least 50% of the world’s supplies originate from Asian countries, with Singapore and Hong Kong being the main centres in the world for production and transshipment of ornamental fish, although Thailand, Malaysia and Sri Lanka are increasing sales.

10.19.1.2

Opportunities for GIAG members

Table A1.48 provides a snapshot of the current market position and opportunities for GIAG product.

Table A1.48 Current market position and opportunities
Country Europe Status of demand Increasing Domestic Production coldwater species coldwater & pond species coldwater & warm-water species freshwater pond species small Imports Major Source Singapore & SE Asia SE Asia 75% Asia, Pacific & South America Asia Singapore & Hong Kong Special permit Opportunities requirements for GIAG Limited due to distance CITES, some health certification CITES Largest market but also 3rd largest exporter, limited due to distance CITES World’s centre for production and distribution, good opportunity Major centre for transhipping, possibly best opportunity CITES, tariffs & Limited due to competitors' taxes proximity none

Unites States Singapore

Increasing Increasing

Hong Kong Japan

Small Declining

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Of the five potential markets, it would seem that the Asian ones offer the best opportunities due to relative ease and cost of transport compared to Europe or west coast of the USA. As Hong Kong does not have any health certification requirements and do not have any species restrictions, it is the easiest market to access outside of Australia. From Table A1.48 the species with the best export potential was Saratoga followed by other (non-rainbow) natives.
10.19.2 Australian Markets for Ornamentals

10.19.2.1

Overview

In Australia, the ornamental fish industry is well established and is estimated to be worth over Au$300 million annually. The demand for ornamental fish is around 14 million fish per annum, and is expected to continue to grow in line with increasing household disposable income. A well-established network of commercial breeders, wholesalers and retailers services the market. The industry is supplied primarily by wholesalers that have traditionally imported fish from south-east Asian farms and wild fisheries. The majority of imported fish are purchased by importers located in Melbourne, which is recognised as the trading hub for Australia. More recently, however, domestic production has expanded and now accounts for around 50% of the total number of fish sold in Australia. Wholesalers play a pivotal role in the marketing chain as they operate as the primary link between suppliers (from imports and domestic producers), the retailers and consumers. In general there are several steps within the chain and there is a fairly significant mark-up (in the order of 100%) at each step of the chain. Therefore, prices for fish sold at the retail level are several times higher than prices at the farm gate. It has been suggested that the new tax system could force the closure of up to 30% of retailers. However, if this is the case, it is expected that the overall standard of operators that remain in business will be improved. About 95% (by volume) of all Australian imports originate from Asia. It is interesting to note that Germany is able to export fish to countries such as Australia profitably; indicating that export of high valued fish can be viable for western countries. Surveys suggest that Goldfish and Koi Carp account for approximately 22% of total imports to Australia by volume, with Tetras and livebearers also being major imported species groups. Industry observers suggest that average prices for ornamental fish in the world market are increasing, due to rising production costs in producer countries. It is also suggested that realistic values for imported fish are at least 130% higher than the FOB prices shown in Government statistics, and this ‘fit for sale’ value of imported fish is often used by wholesalers to set prices for domestic producers. By applying this margin, the average (farm gate) price for ornamentals is around $0.75 per fish. From May 2000, new quarantine regulations will be introduced. These regulations are likely to reduce quarantine periods for some species, which in turn, may result in lower prices for imported fish. Furthermore, introduction of the new GST tax system is also likely to lower the cost of imported fish by approximately 6%. These impacts may lead to a similar falls in prices paid for locally produced fish. Local production of ornamental fish is focused primarily on the production of exotic species to replace imports. Over 100 species being produced around Australia, although the majority of production (up to 90%) involves the culture of just two species; koi carp and goldfish. Various sources within the industry predict that both total production and the number of species under production will continue to increase.
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Currently, it is not possible to determine exactly what the impact new quarantine regulations will have on the industry. Previous surveys have suggested that commercial producers can be characterised as follows: • most are located in Victoria or NSW (these producers accounting for over 80% of total production); • a variety of culture tanks/systems are used, with combinations static culture systems (62.5%), recirculating systems (25%) and flow-through systems being used (12.5%); • the systems are often housed in insulated buildings, with outdoor ponds and tanks being used where climate allows; • operations vary in production from 2,700 to 3.3 million fish per annum; • the majority of operators have less than five years experience; and • over 80% of farms surveyed indicated that they were expanding production capacity. However, industry sources suggest that the impending changes to the AQIS regulations for importation of ornamental fish, and the uncertainty in the economy due to changes to the tax system may limit further expansion in domestic production over the next year or so. The average wholesale value of locally produced fish is about twice that for imported fish, although the number of fish supplied is less. Typically, around 200,000 freshwater fish are exported each year. The export of Australian native fauna and flora falls under the jurisdiction of Environment Australia (EA) and an export permit must be obtained before any native species can be exported. There are currently no export permits required from EA for the export of non-native species of fish. Further requirements may be needed in the form of health certification. These requirements primarily depend on the destination country and vary between countries.

10.19.2.2

Specific market opportunities

Potential clients in Melbourne (including Australia’s largest wholesaler) and Perth were asked to provide estimates of demand for specific species which the GIAG may to produce. Important purchasing criteria for these potential clients were determined to be: • • • • • • Quality of fish (including disease control); Price of fish; Consistency of supply; Range of varieties of fish; Numbers or volume of fish; and Follow-up and communication.

Additional requirements for sales were identified to include: • Efficient distribution in terms of transit times which need to be minimised to ensure fish are alive and healthy on arrival; • Production being set to meet demand; and • Demonstrating the capacity to produce consistent quantities of fish and supplying these fish regularly.

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From previous data in can be concluded that those species that can be produced locally and which command the highest demand in interstate and local (WA) markets include: • fancy goldfish; • livebearers; and • Saratoga.
10.19.3 Australian Markets for Advanced Juveniles

10.19.3.1

Overview

The demand for and production of native food fish in Australia is growing quickly, although total production is currently less than 500 tonnes pa. Farm gate prices of up to $15 to $20/kg have been reported for small quantities of live fish). It is likely that for most species, farm gate prices will stabilise at around $7 to $8/kg once production reaches significant levels (eg. over 200 tonnes per year per species). Market development has been identified as a priority for the industry to ensure that supply does not continue to overtake demand. It has also been suggested that quality and consistency of supply are critical to maintaining premium prices, and that export markets will be very difficult to access. Most farms are located in the temperate regions of Australia, with an increasing number of indoor intensive systems being established. Stock normally require two growing seasons to reach market size (300 to 500 grams) from hatchery-reared fingerlings (0.5 to 1g). The stocking of advanced or over-wintered juveniles (>50g) in the early spring can enable the production of market size fish in one growing season (10 to 14 months). Given recent increases in the numbers of farms being established and expansion of established operations, it is likely that the actual annual fry market exceeds five million per annum, with Murray cod, silver perch, golden perch and Australian bass being the most common species.

10.19.3.2

Specific Opportunities for GIAG members

The requirements of the advanced juvenile market would be that the fish are: • • • • graded with a maximum 15% size variation; health certified (ie. “free of specific diseases”); accustomed to the particular food (pellets) used by the buyer; acclimatised to the particular growing conditions of the buyer (eg. water temperature, salinity and pH).

It is unlikely that advanced juveniles produced in WA will be able to be transported at a cost that would allow them to be competitive in the eastern states, so the market for these animals would be limited to the southern parts of the state.

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11. APPENDIX 2 - PRODUCTION ASSESSMENT
The aquaculture of ornamental fish dates back centuries to ancient China when goldfish were first bred and kept in captivity (Penzes & Tolg, 1986). Whilst production methods for ornamental fish vary considerably between species and countries or regions, production systems can be broadly classified as either intensive indoor tank systems or extensive outdoor pond or tank systems (Brown & Gratzek, 1982; Fernando & Phang, 1994; Willis, 1995). This section describes common industry production practices for the major species groups. It also considers the key production issues for the culture of ornamentals, with specific reference to the major species groups.

11.1

Industry Culture practices

In Asia, the production of ornamental fish is generally undertaken extensively, using static outdoor pond or tank systems with little or no water exchange (Fernando & Phang, 1994). However, there is an emerging trend towards the intensification of production and the use of recirculation systems (using both ponds and large outdoor tanks) (Loo Jang Jing, Singapore DPI Ornamental Fish Section, pers. comm., 2000). In extensive systems, water quality is typically maintained either through small water exchanges or aeration. Filtration is seldom used in these pond systems. Ponds or tanks are fertilised with a mixture of organic (eg. manure) and inorganic (eg. superphosphate) fertilisers to encourage zooplankton growth. Supplementary feeding is also undertaken (Fernando & Phang, 1994). These types of production systems are extensive in nature, characterised by low stocking densities and low levels of management input. They have the advantage of being simple and cheap to operate, and requiring low levels of capital investment (Brown & Gratzek, 1982). However, they provide little opportunity to control the culture environment and often result in production of poor quality fish (Willis, 1995). Similar culture methods are used in Florida, USA, where a large industry supplying the USA and Europe has developed (Winfree, 1989). More intensive production systems (characterised by the use of smaller culture units, greater reliance on artificial feeds, higher stocking densities, greater environmental control and higher capital cost) are utilised in cooler climates such as Europe, the United Kingdom and northern USA (Brown & Gratzek, 1982; Kaiser et al., 1997). These systems are generally housed in insulated buildings that are heated to 28 to 30oC to obtain consistent water temperatures of around 27oC (Willis, 1995). Glass aquariums are sometimes used to provide good visibility of fish, particularly for keeping and spawning broodstock. However, these culture units are more expensive to purchase and maintain compared to larger plastic/fibreglass tank systems (Willis, 1995). Light is normally provided by fluorescent tubes with photoperiod of 14 hr light:10 hr dark maintained (Brown & Gratzek, 1982). The following sections provide more detailed information on the breeding and production of the range of Candidate Species Groups identified earlier, as well as other major species groups. However, it must be noted that this information should only be used as a general guide as differences between the performance of individual species exist within these groups. This is particularly so in the case of production schedules (ie. production cycle times).
11.1.1 Carps and Barbs

This group includes species such as Koi carp, goldfish, Danios and Barbs, with approximately 35 species in the group (McInerny & Gerrard, 1989). They are regarded generally as voracious egg eaters, so eggs need to
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be separated from parents as soon as possible after spawning. Some form of substrate is normally provided for the eggs to fall into to protect them from being eaten (Brown & Gratzek, 1982). Species from the Danio group are spawned in colonies of 20 to 40 fish (2 males:1 female) in 200 L tanks (McInerny & Gerrard, 1989). The parents are removed once eggs are noticed in the tank, with the eggs hatching within 24 hours of release. Fry begin feeding on rotifers and Artemia within a further 24 hours. The fry are then ready to be stocked directly into fertilised ponds (Brown & Gratzek, 1982). Barbs and carps should be handled similarly to tetras, with sexes kept separate for conditioning, and fry maintained indoors for at least two weeks before stocking into ponds or tanks (McInerny & Gerrard, 1989). Most species reach market size by four months at a size of 4 cm. While the majority of species within this group are relatively easy to produce, species such as sharks and knife fish may require the use of induced spawning techniques (Brown & Gratzek, 1982).
11.1.2 Native Species

Australia has many species of freshwater, brackish and marine fish and invertebrates that have good potential as aquarium fish (Leggett & Merrick, 1987). Due to the large range of potential culture species it is impossible to provide a general description as to culture practices. Indeed, many species are still only produced in small numbers by hobbyists and have yet to establish themselves in the wider ornamental fish industry. Therefore, commercial production methods for many species are still to be determined. The main group of Australian native fish cultured as ornamentals is the rainbow fish. Rainbow fish are suited to either pond or tank culture. Many other species from families such as gudgeons, catfish and perch can be spawned and grown in either tanks or ponds (Leggett & Merrick, 1987). However, many species require the use of hormone induced spawning techniques, adding somewhat to complexities in their production (Glenn Briggs, Aquarium Industries P/L, pers. comm., 2000).
11.1.3 Livebearers

Livebearers produce fully formed fry rather than eggs and are classed as viviparous reproductive type (McInerny & Gerrard, 1989). In general, livebearers are capable of producing fry every 28 to 35 days (depending on species) at a temperature of approximately 25oC. The number of fry produced per batch varies from ten for small guppies up to 300 for larger swordtails. Most livebearers have a useful reproductive life of 12 months, after which time fecundity is reduced. Cannibalism of fry by siblings and parents is normal, therefore, floating plants or some form of shelter must be provided for fry. Harvesting of fry must be undertaken daily. Livebearers reach market size (approx. 4cm for guppies and platys and 5cm for mollies & swordtails) within four to five months. Sexual maturity can be reached within eight weeks of age and can cause growth depression. To avoid line breeding, sexes should be segregated by this age (McInerny & Gerrard, 1989). Livebearers may be fed powdered dry feeds from first feed, although the provision of some form of live feed for the first two weeks can increase growth rates of fry. Broodstock do not require any special requirements for conditioning, although again, the provision of live feed may increase the fecundity and health of fry (Willis, 1995). Production is generally undertaken in ponds up to 1.5m deep. Typical production pond sizes in Florida are 6m x 24m, while in Asia they are 5m x 10m (Brown & Gratzek, 1982). Ponds are fertilised with inorganic and organic fertilisers to generate an algae bloom prior to stocking with six to eight month old broodstock.
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The stocking density of broodstock varies with species. According to Brown & Gratzek (1982), on average stocking rates of 300 guppies per 5m x 10m pond, 400 platys per pond, 200 swordtails per pond are used. They also state that supplementary feeding with pelleted feeds or wet mash consisting of cooked animal meal and cereals is provided five to six times per week in the late afternoon. Selective harvesting of the ponds is commenced after five months using a variety of methods that include the use of seine netting, fish traps or the draining of ponds. Ponds are normally drained, dried-out and restocked every one to two years to ensure high productivity and to minimise the likelihood of inbreeding (Brown & Gratzek, 1982). Tank culture of livebearers is also undertaken, with broodstock being kept in large tanks at a ratio of two females per male (normally 100 fish stocked into 200L tank). Harvested fry are transferred daily to nursery tanks, where they are kept at a density of up to 20 fry per litre (Kaiser et al., 1997; Olivier, 1997). The density is reduced during growout to around three fish per litre at market size. Considerable research into the development of more intensive culture methods (Kaiser et al., 1997) is being undertaken. Supplementary feeding with pelleted feeds is considered necessary throughout the production cycle. Fish are generally harvested for sale within 16 to 20 weeks (Willis, 1996).
11.1.4 Rainbows

This group originate mainly from Australia and New Guinea, and most are fairly new to the industry. Several new species were discovered as recently as ten years ago (Allen, 1995). Rainbow fish are best spawned as colonies (1 male: 1 female) of 10 to 15 fish in a 150 L tank. In general, they are not demanding of water quality, although they do prefer water with high pH and hardness (Allen, 1995). Spawning mops are suspended in the water column, that the parents spawn their eggs onto and are removed periodically (one to three days depending on species) into a separate tank in which the eggs are hatched (Willis, 1999). The eggs hatch after 7 to 12 days and fry commence feeding on infusoria and rotifers (Allen, 1995). [Infusoria
refers to a range of protozoans which are used as a food source for small fry, such as paramecium and rofiters that can be grown in an infusion of leaves, hay or other plant material.] Culture success is variable; with some species

better suited to being stocked into a fertilised pond or stocked in tanks and fed on infusoria and artemia (Greg Willis, Tasmanian Ornamental Fish Farm, pers. comm., 2000). Weaning onto artificial feeds generally commences within two to three weeks of first feed (Willis, 1999). Rainbow fish normally reach market size within five months at a size of 5 to 6 cm (Allen, 1995).
11.1.5 Anabantids (bubble nest builders)

Species within this group breed similarly, with the males constructing and maintaining a nest of air bubbles in which eggs & larvae are incubated (differences are mainly in the size of bubble nests and the degree of parental care by males). This group is best spawned in tanks rather than ponds and fish should be bred as pairs. The number of eggs per spawn varies between species, ranging from 100 eggs for small species (eg. dwarf gouramis) up to 30,000 eggs for large species (eg. kissing gouramis). Breeding tank size varies, with 10 L tanks being suitable for smaller species and 500 L tanks for larger species (McInerny & Gerrard, 1989). A suitably conditioned male will begin to build the bubble nest soon after being introduced to the breeding tank at 27 to 30oC, with spawning generally occurring in the evening. The female should be removed from the tank immediately after spawning. Eggs normally hatch within 24 to 48 hours (depending on the species) at 27oC (Cole et al., 1998). Fry become free-swimming within 48 hours, after which time the male is also removed from the tank. The fry are fed on live feed such as infusoria, paramecium and microalgae for first feed, with artemia introduced after two to three days (McInerny & Gerrard, 1989). Weaning onto pelleted food occurs after two to three weeks, at which stage they can be stocked into fertilised ponds or grow-out tanks (up to 200 pairs may be
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spawned at a time to provide enough fry to stock a pond or tank). Stocking densities of two fish per litre can be achieved at market size (Cole et al., 1998).
11.1.6 Cichlids

Cichlids are a very important group of ornamentals and also contain important food fish species such as Tilapia (Willis, 1995). The cichlid family includes about 500 species. About 70% of these are suitable for use as ornamentals. This group is generally difficult to breed and requires specific water conditions in relation to pH, water hardness and mineral content (Brown & Gratzek, 1982; Willis, 1995). Reproductive strategies vary considerably from substrate spawners to mouthbrooders, with all species displaying high levels of parental care of eggs and fry (Hopper, 1996). They are therefore not suitable for pond breeding (Fernando & Phang, 1994). Cichlids also have considerable size differences bet ween species, from four to five cm up to more than 60 cm, and accordingly, produce a range of egg numbers from 100 up to several thousand for large species. Most species breed as pairs and often mate for life. Tanks with a thick layer of sand and gravel are normally used, with pieces of slate (or similar) and some sort of cave or cover provided (McInerny & Gerrard, 1989). Once the pair has spawned, they generally care for the eggs and fry. However, they are known to eat eggs, so higher productivity can be achieved by removing the eggs for artificial rearing. Eggs generally hatch after two to three days at 27oC, with the fry free-swimming seven days after swim-up. Most species produce fry that are relatively large and are capable of feeding on artemia at first feed. They are generally weaned onto dry foods within three weeks of swim-up (Willis, 1995). After weaning, fish are stocked into fertilised ponds or tanks and reach market size within three to five months, depending on species.
11.1.7 Tetras

Tetras are generally considered easy to breed, however, water chemistry plays a major role in fertility and hatch rate of eggs (McInerny & Gerrard, 1989). In particular, tetras prefer soft, acid water for spawning and growth (Cole & Haring, 1999). Sexes should be conditioned for spawning separately, and spawned as pairs. Parents should be removed soon after spawning which usually occurs within 24 hours of mating (McInerny & Gerrard, 1989). The eggs hatch between one to several days after spawning depending on species and fry are generally free swimming after a further 24 to 48 hours. As these species are generally small, rarely exceeding 5cm at maturity, fry are small and need to be fed on infusoria, paramecium, rotifers and microalgae, with artemia after three to four days and weaning onto dry food after two to three weeks (Cole & Haring, 1999). Fry must be fully weaned before being stocked into ponds or grow-out tanks (ie. three to four weeks old). Fish generally reach market size after three to four months at three to four cm in length.
11.1.8 Catfish

There are over 150 species of catfish, with the most popular from the genus Corydoras (McInerny & Gerrard, 1989). Spawning of catfish is generally difficult, with many species rarely breeding in captivity. It is important that sexes be held and conditioned separately until spawning. Environmental conditions such as water quality and photoperiod are important cues for spawning. Catfish are generally considered unsuitable for pond breeding and are bred in tanks (Brown & Gratzek, 1982). Induced spawning techniques are also sometimes used, particularly for larger species.
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Corydoras are spawned in pairs or groups (2 males: 1 female) in tanks with cool fresh water. A drop of 2 to 5oC or low-pressure fronts can often stimulate spawning (Greg Willis, Tasmanian Ornamental Fish Farm, pers. comm., 2000). Parents do not eat eggs and young and can be safely left with them (McInerny & Gerrard, 1989). Most catfish are generally benthic scavengers and should be provided with a diet high in organic matter. Catfish are generally stocked at low density with other species in ponds or tanks (ie. polyculture) (Willis, 1995). Under polyculture conditions, it is important to keep fish of similar size to prevent aggressive interaction between species.
11.1.9 Saratoga

Whilst there is limited demand for Saratoga in the local and intestate markets in Australia, a sizeable export market exists (Glenn Briggs, Aquarium Industries, pers. comm., 2000). These species are similar to Arowana (Asian legends suggest dragons turned into Arowana and are therefore thought to have mystic powers, bring good luck, etc.). They are very difficult to breed, although following years of experience, local producers have begun to achieve reasonable success. Saratoga are mouthbrooders and will incubate up to 50 eggs and fry per spawning inside the buccal cavity for several weeks before the fry are released (Leggett & Merrick, 1987). These fish are generally cultured in large earthen ponds, with half to one acre ponds favoured by the larger breeders. Up to 20 sexually mature fish (five years of age or more) are maintained in the ponds and will spawn during spring and summer (Leggett & Merrick, 1987). Juveniles can be harvested from the pond, however, better results in terms of survival are attained by removing fry prior to their release (Glenn Briggs, Aquarium Industries, pers. comm., 2000). Growth is rapid with a length of 100mm reached in approximately three months. Whist there has been an increasing availability of males with eggs in recent times to counter this problem, the practice of collecting brood stock with eggs from the wild is not considered favourably by environmental groups. Industry sources suggest that it is likely that restrictions will be placed on breeders of Saratoga to eliminate the risk of stock depletion due to brood stock collection from the wild.
11.1.10 Advanced Juveniles for Food Fish Production

11.1.10.1

Comparison of methods for ornamental and food fish

While most of the procedures and practices used in production of ornamental fish are the same as those used in food fish production there are many differences as well (Willis, 1995). The most fundamental difference between ornamental and food fish is the purpose of the end product. Food fish production is aimed at producing a fish for eating, generally as a fresh or frozen product, whereas ornamental fish are produced for their ornamental or aesthetic value and are sold live (Willis, 1995). As a consequence, production techniques for ornamental fish are aimed at producing fish that have no body or fin deformities, no mechanical damage to the skin and scales, good colour, excellent health and survivability, and conform to industry quality standards (Brown & Gratzek, 1982; Willis, 1995). In general, a higher level of control is needed with the ornamental fish to ensure the product reaches consumers in a healthy and aesthetically pleasing state when sold. Willis (1996) raises the follow points as the main differences between ornamental and food fish production:

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Management & Culture techniques
• production figures and calculations for ornamentals are normally in terms of numbers of fish rather than weight of fish and length of fish is generally used to size ornamentals instead of weight; • feeding practices differ with generally a greater reliance on live foods and wet mash diets for ornamentals (powdered milk and egg products are also used for larval rearing); • FCRs are less important and feeding is generally done by hand with fish fed ad libitum; • there is very little use of mechanised harvesting, handling or grading – nearly all handing of ornamental fish is carried out by hand due to potential damage to scales, skin or fins; • production of ornamentals is generally undertaken in fertilised ponds (less than 50 m2) in environments with are suited to the species – larger ponds are sometimes used whereby they are divided into smaller culture units such as net pens or cages; • low stocking densities are used (generally less than 1 to 2 fish per litre for 2 gram fish - food fish may run as high as 30 g/l), • ornamentals typically have short production cycles with most ornamentals reaching a marketable size at less than six months of age (most food fish species are at least two years old at market size) • polyculture (where production of more than one species of fish occurs in a culture unit) is often practiced – ornamental fish farms may produce several species of fish whereas food fish farms generally produce only one species; and • most ornamental farms are closed cycle farms and handle all life stages of fish – food fish production is often segmented into life stages (ie. hatchery, nursery, grow-out).

Breeding & broodstock
• as ornamental fish are relatively smaller than food fish, ornamentals produce relatively fewer eggs (100s rather than 1,000s) and therefore large numbers of broodstock are needed; • ornamentals generally have less complicated reproduction cycles than larger food fish, with temperature and fish condition being the main cue for spawning; • most ornamentals are partial spawners (ovaries contain eggs at various stages of development) and can spawn several times over a season – therefore, if broodstock are well conditioned and maintained in suitable temperatures spawning can occur several times a year; • selective breeding is common for ornamentals which has given rise to a wide variety of domesticated strains of many species (many would no longer survive in their native habitat); • genetic traits that are selected for in ornamentals include colour, fin and body shape, scale patterns, growth rates and disease resistance – food fish production is more concerned with traits such as flesh quality, yield growth rates and disease resistance.

11.1.10.2

Specific methods for native food fish

Several decades of research has meant that reasonable data is available on the reproductive biology of a number of native fish - most of the well established breeding methods were developed to produce fry for stocking into impoundments and other waterways for recreational fishing and conservation purposes. The process is relatively similar for the main species, with natural and induced spawning routinely taking place in a number of private and government hatcheries around Australia. However, each species has its own characteristics and problems. As an example, the following description is for Murray cod (pers. comm. Brett Ingram, MAFRI, Snobs Creek, 2000):
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Natural spawning
• Places little stress on fish, although very high viability in egg production. • Hold broodfish in earthen ponds, 0.1 - 0.4 ha, 1 - 2m deep, static with inlets and overflow, also bottom drain. Stock with young fish (males 4 yr, females larger), so put in up to 14 fish. Feed yabbies, goldfish, small trout, ox liver to keep up health. • Introduce a spawning barrel for each pair which have fly wire inserts. Spawn early November to January, both temperature (>20oC) and light thought to be main spawning inducers, but can spawn in range 16 - 25oC. Maybe spawning is related to a quick increase in temperature. Spawning can occur over several days, up to 10,000 eggs. First fly mesh is cleaned by the male, then female will spawn and male will tend the eggs - aerate with fins, pick up some dead or diseased ones. • Diver check spawning boxes daily. When eggs present pull out box, strip off fly mesh and cut into squares, transport in polystyrene box and transfer to hatchery, put in glass aquaria use volume change to estimate numbers. Then put in tanks to hatch the eggs. May add some prophylactic treatments. Use degasser for water before transfer into header tank, constant flow into tanks (22oC) with continual change over, treat every few days for fungi. • Hatch over 7-8 days. Aerate to keep up O2. 100% formalin added each day. Loose eggs hatched in standard EWOS egg troughs.

Induced spawning
• For induced spawning use seine net, broodstock can switch off egg development if not handled well. Check tags and select fish, best to use smaller fish 15-18 kg, easy to handle.. • Use a cannulation tube (glass pipette) in oviduct (3cm along) suck up eggs, check status. If good, so can inject with hormone (HCG) underneath pelvic fin or muscle in back (1,000-2,000µ/kg), usually one injection is sufficient. Sometimes reinject if no ovulation (after 21 oC) within 50 hours. Several other types of LHRa’s, eg. Ovaprim. • When eggs ready, express milt into a syringe, strip out eggs, into conical beaker, add milt, and fertiliser solution (salt and urea to activate sperm). Eggs become sticky. Eggs in the water harden to become opaque. 60% viability with 24 hours of fertilisation.

Juvenile production
• Usually takes 5-8 days for hatch. Fairly big larvae (8 -9 mm long) with big yolk sac which lasts for 7-10 days. Larvae will clump together, when yolk sac finished, clumps will disperse. Fed up to 8 times a day with Artemia. • Larvae are transferred into plankton ponds or other tanks. • Fry ponds are shallow (0.7m) to encourage blooms and have concrete raceway in sump to collect fry. Rotary hoe floor, some plankton exists in soil, mountain stream for source water. Need alkalinity above 20 ppm, lime at 2,000 kg/ha and other fertilisers, lucerne bails, etc. Fill pond with water and 7-14 days later stock when high content of cladocerans (especially Moina) are at around 500 individuals/L. Stock 25 fish per m2. Monitor water quality, nutrient and plankton levels, add water or flush, put in more fertiliser or lime. Check health of fish and growth rates, also feeding behaviour.

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• After 5 - 6 weeks they will reach 30 - 40 mm long, plankton blooms changing in density and species. Auto timers used for aeration, especially during early morning. High pH (>9), ammonia and temperature will cause problems and decrease survival. • Fry can now be harvested, transferred to clean water for purging for a couple of days. They are then packed for transport in 10 - 20L of clean water in strong plastic bags which are then filled with oxygen before being sealed and packed in cardboard boxes. Fish packed in this way can be transported for up to 48hrs with few loses as long as the water temperatures are kept cool (below 15°C). Bulk quantities can be transported in fish transport tanks which are supplied with aeration or oxygenation during the journey. Fisheries Victoria, NSW Fisheries and Queensland Department of Primary Industries have released a range of publications on the breeding of native food fish. Most of these are available from Ozefish Books (08 8200-2490). However, it is thought that the GIAG members would NOT become involved in hatchery production due to the costs of establishment as well as the levels of skills required. Rather, fingerlings (0.5 to 1.0g) could be purchased in bulk and on-grown to 20 to 50g+ (termed advanced juveniles) in tanks or earthen ponds. A range of commercial diets is available, each with recommendations on feeding rates (usually related to a percentage of the average body weight of the fish).

11.2

Production Issues

While it takes little skill to breed a few fish in a home aquarium, commercial production of ornamental takes considerable skill and a great deal of time and effort. Poor attention to detail can lead to production of poor quality fish that are unsaleable. Commercial production of ornamental fish takes as much scientific endeavour as any other aquaculture enterprise and definitely will not work as a ‘set and forget’ farm. Likewise the on-growing of the native food fish fry requires some effort or else large scale mortalities or slow growing fish will limit sales. Unless, specifically mentioned, the following discussion on ornamental production issues would be similar for production of native food fish advanced juveniles.
11.2.1 Level of Skill

There are varying levels of skill required for production of different ornamental species, including broodstock management, spawning, larval rearing, water quality management, culling and grading fish, disease management, and grow-out management (Willis, 1999). The following table has been prepared based on Aquanic (2000) and the consultants' experience in the industry.
Table A2.1 Culture skill level rating for species groups of ornamental fish
Species Barbs Catfish Cichlids Fancy goldfish Common goldfish Bubble nest breeders Koi carp Livebearers Tetras Rainbows PSM Group Pty Ltd Difficulty rating Easy to moderate Moderate to hard Moderate to hard Moderate Easy Moderate Easy Easy – but production of genetically pure strains is difficult. Moderate Easy to moderate 23 May 2000 Page: 116

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Other Natives Native food juveniles

fish

advanced

Easy to hard Easy for the on-growing of hatchery-reared stock

11.2.2 Labour Input

Throughout the world, the majority of production occurs in ponds, at relatively low culture intensity. The main labour functions are feeding fish, and harvesting, sorting and grading of fish. As there is generally very little use of mechanised harvesting, handling or grading with ornamental fish, These activities account for much of the labour requirements of a ornamental fish farm. Other labour functions include packaging of fish for shipment, water quality management and health monitoring of fish. Since the production of ornamentals is likely to be a secondary enterprise for members of GIAG, the amount of time involved in the production of fish must be considered. As the level of skill required to produce fish varies, so does the labour input. In general terms, labour input is higher for species that are grown in tanks and indoor facilities.

Table A2.2 Labour requirements for species groups
Species Barbs Catfish Cichlids Fancy goldfish Common goldfish Bubble nest breeders Koi carp Livebearers Tetras Rainbows Other Natives Native food juveniles Labour requirements Moderate Moderate - high due to spawning requirements High due to spawning requirements Moderate – due to high degree of sorting and culling needed Low Moderate due to spawning requirements Low Low – moderate due to sorting and grading necessary to supply pure strains of fish High – low fecundity therefore much time needed for spawning large numbers Low for pond production, Moderate for tank production Low – high Low for pond production, Moderate for tank production

fish

advanced

11.2.3 Capital Requirement

Capital costs vary with the type of equipment/systems employed in the production of fish. Some species require superior water quality conditions to others, and consequently, more expensive filtration equipment is required. The type of culture tanks or ponds required may also vary. Some species may only be produced indoors, whilst others are suitable for outdoor production. The following table indicates the commonly used culture systems for the various species groups.
Table A2.3 Commonly used production systems for species groups
Species Commonly used culture systems

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Barbs Catfish Cichlids Fancy goldfish Common goldfish Bubble nest breeders Koi carp Livebearers Tetras Rainbows Other Natives Native food fish advanced juveniles

Indoor tanks, ponds for growout Indoor tanks, ponds for growout Indoor tanks and recirculating systems Outdoor tanks and small ponds Ponds or outdoor tanks Indoor tanks, ponds for growout Ponds or outdoor tanks Recirculating systems, outdoor tanks and ponds Indoor tanks, ponds for growout Indoor tanks or ponds Indoor tanks or ponds Ponds or outdoor tanks

11.2.4 Feed Requirements

Feeding practices for ornamental fish generally involve the use of live foods and wet mash diets, while powdered milk and egg products are also used for larval rearing. Food Conversion Ratios (FCRs) are of low importance and feeding is generally done by hand with fish being fed ad libitum. While most species of ornamental fish will readily accept artificial feeds at market size, the feeding requirements for earlier life stages, particularly larvae and fry may vary considerably. This variation is, to a large degree, dependant on their size during the early life stages. Smaller species are generally more difficult to feed, with some of the smallest species requiring several types of live feed during their growth cycle. This requirement adds considerably to the skill requirement, labour input, and the cost of production. The hatchery-reared fry are already weaned onto pellet diets, for which there is a range of different brands and sizes that could be used for the native food fish. Also, if pond production is used, some natural feeds may be present in the water.
Table A2.4 Feeding regimes for species groups
Species Barbs First Feed requirements Some require infursoria, Artemia, similar sized live foods, weaning 2nd – 3rd week Artemia, similar sized live foods, weaning 2nd – 3rd week Artemia, similar sized live foods, weaning 2nd – 3rd week Artemia, similar sized live foods, weaning 2nd – 3rd week Artemia, similar sized live foods, weaning 2nd – 3rd week Infursoria and similar sized feeds, Artemia from 2nd week, weaning 3rd – 4th week Artemia, similar sized live foods, weaning 2nd – 3rd week Artemia or artificial feed Artificial suitable Yes diets Feed Contents Protein: 32% minimum Fat: NDA Protein: 32 – 35% Fat: NDA Protein: 40 – 50% Fat: 8 – 10% Protein: 30 – 38% Fat: low Protein: 30 – 38% Fat: low Protein: 40% Fat: < 10% Protein: 31 – 38% Fat: 3 – 8% Protein: 40 – 45% Fat: 8% Page: 118

Catfish Cichlids Fancy goldfish Common goldfish Bubble nest breeders

Yes Yes Yes Yes Yes

Koi carp Livebearers

Yes Yes

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Tetras

Rainbows

Other Natives

Native food fish advanced juveniles

Infursoria and similar sized feeds, Artemia from 2nd week, weaning 3rd-4th week Infursoria and similar sized feeds, Artemia from 2nd week, weaning 3rd-4th week Some require infursoria, Artemia, similar sized live foods, weaning 2nd – 3rd wk Already weaned in hatchery

Yes

Protein: 40% Fat: NDA Protein: Moderate Fat: Low for most Protein: NDA Fat: NDA Protein: 30-40% Fat: Low

Yes

Yes – species

Several brands

11.2.5 Crop Cycles

Most ornamental farms are closed-cycle farms and deal with all life stages of fish, there is little segmentation of production (ie. hatchery, nursery and grow-out), unlike food fish production (Willis, 1995). Polyculture is often practiced in ornamental fish farms (Fernando & Phang, 1994; Willis, 1995), whereby they produce several species of fish, adding to the complexity of management of the farm. Ornamental fish generally have short production cycles (Brown & Gratzek, 1982; Bassleer, 1994; Willis, 1995). Most ornamentals are of a marketable size at four to six months of age, with some at a marketable size within 12 weeks (Kaiser et al., 1997). Species with a short crop cycle may provide advantages to the producer when compared to those with long crop cycles, such as improved cash-flow, enhanced return on capital investment, greater capacity to regularly supply the market etc. (Bassleer, 1994). The native food fish fry are usually available late summer and would be grown over the winter months for sale in early spring. The culture period could be as short as 6 months, or as long as 9 months depending on water temperatures, initial stock size and customer requirements. The following table provides estimates of the time required to produce various market sized ornamental fish and food fish juveniles. These times are provided as a guide only and will vary in accordance with the temperatures, feeding regime, management and culture systems used.
Table A2.5 Estimated time to produce market sized fish
Species Barbs Catfish Cichlids Fancy goldfish Common goldfish Bubble nest breeders Koi carp Livebearers Tetras Rainbows Other Natives Native food fish advanced juveniles Estimated time to produce market sized fish 14 – 16 weeks 16 – 20 weeks 16 – 20 weeks Up to 2 years 14 – 16 weeks 12 – 16 weeks 14 – 16 weeks 14 – 20 weeks 12 - 20 weeks 18 – 20 weeks varies ‘over winter’, 6 - 9 months

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11.2.6 Breeding & Broodstock

As ornamental fish are generally much smaller than food fish, ornamentals produce relatively fewer eggs (100’s rather than 1,000’s) and therefore large numbers of broodstock are needed (Willis, 1995). However, they typically have less complicated reproduction cycles than larger food fish, with temperature and fish condition being the main cue for spawning (Willis, 1995). Most ornamental species are partial spawners (ovaries contain eggs at various stages of development) and can spawn several times over a season. Thus if broodstock are well conditioned and maintained in suitable temperatures, spawning can occur several times a year (Willis, 1995). Some ornamental species have specific environmental requirements in respect of water chemistry and spawning cues (moon phases, photoperiod, atmospheric pressure drops etc.) (Hopper, 1996). Selective breeding is usually performed on ornamentals which has given rise to a wide variety of domesticated strains of many species of fish (many would no longer survive in their native habitat). Genetic traits that are selected for include colour, fin and body shape, scale patterns, growth rates and disease resistance (Willis, 1995). Any commercial ornamental fish producer must be aware of and actively practice selective breeding to maintain and improve genetic strains of fish. Production of new or improved strains of fish can result in higher prices (Willis, 1995). The following table provides some information on reproductive traits of the species groups being assessed. As the native food fish are being purchased as fry, there is no need for broodstock and a breeding program.

Table A2.6 Reproductive traits of ornamental fish groups
Species Barbs Catfish Cichlids Fancy goldfish Common goldfish Bubble nest breeders Fecundity 50 –3,000 200 – 500 100 – 2,000 Several thousand Several thousand 80 – 500 Spawning frequency 6-8 weeks 1 – 2 months 1 – 4 weeks 1 – 2 months 1 – 2 months 4 – 6 weeks Comments Hormone inducement for some larger species Many species not bred in captivity Parents incubate and protect eggs and fry Selection of broodstock important – Males build bubble nests – equilibrium between air and water temperatures important for larval survival Spring spawner Viviparous Correct water quality important Colonies can be used for continual production of eggs Induced spawning generally used not applicable

Koi carp Livebearers Tetras Rainbows Other Natives Native food fish advanced juveniles

60,000 eggs per lb 10 – 200 100 – 200 20 – 50 Varies not applicable

1 – 2 months 28 – 35 days 6-8 weeks 5 – 20 days Varies not applicable

11.2.7 Environmental Limitations

Production of ornamentals is typically undertaken in fertilised ponds (generally less than 50m2), with larger ponds sometimes being used (Fernando & Phang, 1994). In areas of unsuitable climate, glass aquaria or
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recirculating systems must be used to maintain appropriate environmental conditions artificially (Willis, 1995). Maintenance of environmental requirements through artificial means, adds to the complexity and cost of production for these species. The culture tanks and ponds that are used for native food fish are similar to those used for the ornamental fish. The environmental requirements for breeding have been largely outlined in the preceding section. In general, the provision of suitable spawning environments is more difficult to achieve than requirements for the growth of fish. The following table broadly defines two of the major environmental requirements for the species groups.
Table A2.7 Environmental requirements for species groups
Species Barbs Catfish Cichlids Fancy goldfish Common goldfish Bubble nest breeders Koi carp Livebearers Tetras Rainbows Other Natives Native food fish advanced juveniles Water Hardness Soft - mod Soft – mod Soft Mod Mod Soft – mod Mod Mod – hard Soft Mod- hard Mod – hard Mod –hard Temperature range for growth 24 – 30 24 – 28 24 – 30 19 – 25 19 – 25 24 – 30 13 – 27 24 – 30 25 – 29 24 – 30 15 – 30 6 – 30

Failure to provide an environment that is suitable for any given species of fish will impact on the performance of the species in terms of growth, survival and disease resistance. Therefore, steps must be taken to ensure that the environmental requirements for species are met wherever possible. Of particular relevance to GIAG is the issue of water chemistry. Preliminary analysis of water shows high mineral and salt content. These waters are likely to be unsuitable for many ornamental species, most notably, those adapted to an environment with few minerals (ie. soft and possibly moderate water hardness). Steps to reduce the mineral and salt content of the water may be necessary for those species that require low mineral content waters. Pilot scale production systems may also be useful in screening the performance of candidate species. It should also be noted that selective breeding could be used to adapt a species to different environmental conditions. However, while this adaptation is possible, it can take many generations to achieve. Decreased performance may still be evident in adapted populations.
11.2.8 Transport and Distribution

Practices used in the transportation of live ornamental and native food fish are well established, with hundreds of millions of fish being shipped annually around the world. Mortality rates as low as 4 to 6% during transit are generally achieved when fish are prepared and packaged correctly (Fernando & Phang, 1994). The basic principles for transport of live fish, as stated by Forteath (1993) and Thorne & Hickton (1999) are summarised as follows:
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• fish must be healthy and free of disease-causing organisms prior to transport; • fish should be starved (purged) prior to transport to prevent excrement from contaminating the water; • aeration and/or oxygenation of transport water should be undertaken to ensure adequate dissolved oxygen levels; • temperature control measures must be implemented to maintain relatively constant temperatures; • the build-up of mucous and metabolic excretory products must be minimised; • fish must be protected from mechanical damage; and • prophylactic treatment for diseases is usually a necessity.

11.2.8.1 Preparation for Transport
Prior to transporting fish from the farm, they should be harvested from growing tanks and held in separate tanks from fish that will remain on the farm. Ideally, a separate area of the facility should be dedicated to the holding and preparation of fish from transport. Holding tanks can be used to hold fish while they are prepared for transport thereby allowing them to settle down prior to transport and recover from the stress of harvesting and grading. Holding tanks should be constructed in a way that allows observation of fish (without causing stressing to them). Regular monitoring of fish should be undertaken and any fish that appears diseased or in a weakened condition should be removed immediately. Sampling some fish and checking for parasites may also be useful. Any treatments deemed necessary can then be applied to ensure the removal of parasites prior to transport. This is vital since under the stress of transport, the fish immune system is compromised thereby making them more susceptible to infection. The crowded conditions of transport also provide ideal conditions for spread of infections. This is particularly a problem when transporting fish at higher temperatures, which allow the rapid increase of parasite infections.

11.2.8.2 Temperature Regulation and Chemical Additives
A major problem associated with the transportation of fish is the relatively high weight of water to fish ratios that are required and the relative cost of freight. On average, shipments contain less than 5% fish by weight (OFI, 2000) and freight accounts for up to 30% of total variable costs (Kaiser & Vine, 1998). Consequently, a great deal of research and effort has been directed at ways to reduce this cost burden. Teo et al. (1989) state that the removal of toxic metabolic by products such as ammonia and carbon dioxide, suppression of bacterial blooms and provision of adequate oxygen as the limiting factors in transport. It has been found that these problems can be addressed, and packing densities subsequently increased through: • the use of anaesthetics or lowered temperatures to reduce metabolic rates; • provision of ammonia absorbent material to maintain low levels of ammonia; and • the use of pH buffers to convert carbon dioxide to bicarbonates. When shipping fish it is important to carefully consider temperature control. While polystyrene boxes provide good insulation, when stock is in transit for long periods and exposed to extreme temperatures problems are likely to occur (Willis, 1996). If shipping warm-water fish to cool areas/countries, several small bags filled with hot (<70ºC) water and covered with paper may be included in the boxes. If shipping cool-water fish to warm areas/countries, several small bags filled with ice and covered with paper may be placed compactly in the boxes (Thorne & Hickton, 1999).
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Sometimes polyvinylpyrrolidine (PVP) or proprietary polymers are added to reduce scale and skin damage during transport. PVP compounds are also found naturally in aloe vera, which is the basis for several commercial preparations. The polymers temporarily bond to lesions thereby preventing disease. The use of this preparation is common practice in the transportation of aquarium species, although it is not generally used with native species due to the high cost. Many operators also have “secret formulas" of various salts that are added to the transport water. In general, the addition of salts assist fish in maintaining their osmotic balance and may aid in preventing infection from injuries incurred during transit.

11.2.8.3 Transport Costs to Selected Markets
Two transport options from the Gascoyne have been identified for local markets in Perth and surrounding areas. Road/rail could be used with estimated transit times of 10 to 12 hours to Perth. While rail and road transport would be cheaper than airfreight (only being available south of Geraldton), potential exposure to uncontrolled conditions (ie. temperature extremes, rough handling) is likely to lead to quality problems. Several producers have used these methods and found them to be unsuitable (Bruce Sambell, Aquarium Farms of Australia, pers. comm., 2000). The preferred freight option would be via airfreight from Carnarvon airport. SkyWest/Ansett will to ship fish to Perth at a rate of $2.00 per kg plus a $10 surcharge per shipment. This rate is for perishable goods for the ‘next available flight’. An account would need to be established before shipping of fish could commence, and consignments of fish are best booked several days in advance. Flights are available daily with a fight time of approximately 2.5 hours. The only viable transport option for accessing the interstate market is via airfreight from Carnarvon airport. Costs and transit times for accessing eastern states of Australia are provided in Table A2.8. A $10.00 surcharge also applies to each shipment.

Table A2.8 Freight costs and flight details for interstate markets
Destination Adelaide Melbourne Sydney Brisbane Price per kg $3.50 $4.00 $4.00 $4.50 Direct Flight Yes Yes Yes Via Sydney or direct Estimated Transit time 8 hrs or overnight 10 hrs 11.5 hrs Overnight or 10 hrs

Similarly, the most suitable option for accessing export markets is via airfreight. International markets can be accessed through Perth, which has a large number of regular overseas flights. Discussions with Danzas/AEI Australia Pty Ltd indicate that Singapore Airlines are a suitable carrier due to flight availability and service capability. Singapore Airlines is also a major carrier of ornamental fish throughout the world (OFI, 2000). All fish must be packed to withstand a transit time of at least 48 hrs; a standard IATA requirement. The following table details prices for accessing international markets, from Carnarvon.

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Table A2.9 Prices for accessing international markets
Destination Europe Hong Kong Los Angeles Singapore Tokyo Price per kg $6.50 $4.00 $6.50 $3.50 $5.50

In addition to the above freight charges, a surcharge of $70 per shipment is applicable, this covers customs entry, airline handling, documentation and agency fees.
11.2.9 Packaging

Fish may be transported live using four basic methods (Thorne & Hickton, 1999); • • • • damp or moist but not immersed in water; fish transport trucks; live fish transporters; and in sealed plastic bags.

The main transportation method used in the ornamental fish trade involves the use of sealed plastic bags (Fernando & Phang, 1994). The plastic bag is filled with fresh water at the correct temperature and water quality to between 20 to 50% of bag volume. The fish are then placed in the bag and the air inside the bag is expelled and replaced with oxygen. The bag is then sealed by twisting the top of the bag and folded over, with rubber bands or metal clips used to fasten the top of the bag (Fernando & Phang, 1994; Greg Willis, Tasmanian Ornamental Fish Farm, pers. comm., 2000) (see Figure 4.X). Depending on bag and box sizes, between 1 and 14 bags are generally packed inside a polystyrene or cardboard box for transportation (Fernando & Phang, 1994). However, if fish are packed individually, up to 500 bags may be packed in the one box (Patrick, 1999).

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Figure A2.10 Diagram of ornamental fish packaging

Packing densities depend largely on the type of species and the size of fish (Fernando & Phang, 1994; Patrick, 1999). Time in transit is an important consideration for packing density. This is calculated from the time when the fish are packed at the farm to when the fish arrive and are unpacked at the destination (Brown & Gratzek, 1982). Packing density also depends on the vitality and health of fish, with poor quality or unhealthy fish tending to travel with greater risk of mortality compared to robust healthy fish (Greg Willis, Tasmanian Ornamental Fish Farm, pers. comm., 2000). Again, the production of good quality fish is paramount to the success of any operation. The following table provides recommendations for packing densities (using standard transit times) when accessing local markets and extended transit for accessing international markets. While these recommendations are based on current industry practice and reviewed literature, producers may need to modify these densities based on their own experience. Densities of up to 20% more than quoted can be achieved with experience and care. The use of temperature manipulation, anaesthetics, and other chemical additives as previously described can also be used to increase packing densities.

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Table 2.11 Recommended packing densities for ornamental fish for a standard poly box
Species Swordtails Species Length (inches) 1.0 1.5 2.0 2.5 3.0 1.5 2.0 2.5 0.5 1.0 1.25 1.5 0.5 1.0 1.25 1.5 1.0 1.25 1.5 2.0 2.5 3.0 4.0 5.0 6.0 2.5 Standard Pack 400 300 250 200 100 300 200 150 400 300 275 250 400 300 275 250 1500 400 200 150 100 75 50 12 10 100 Extended Pack 300 250 200 150 75 225 150 100 300 225 200 175 300 225 200 175 1000 300 150 100 75 50 35 20 15 75

Mollies Medium Large Platies

Regular

Variatus

Guppies (Feeder) (Fancy) General Guidelines

Native food fish advanced juveniles *

* Little information is available on transporting this size of fish – some experimentation will be needed to develop optimal packing practices

The transportation of fish on Australian domestic flights requires compliance with the standards associated with acceptable type and total weight of the expanded polystyrene (EPS) box, types of plastic bags and method of tying. The air transport of ornamental fish is governed worldwide by the International Air Transport Association (IATA). A summary of the regulations for transport of live ornamental fish is provided in the Appendix. Estimated packaging costs are provided in Table A2.12.

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Table A2.12 Estimated cost of packaging for ornamental fish transport
Item Plastic bag (60 cm by 30 cm) Box liner (865 x 460 mm by 100 micron) Polystyrene box Incidentals (rubber bands, packing tape, oxygen) Total Cost $18.00 per 100 A $39.00 per 100 $2.75 B $0.50 per box C Number per box 6 1 1 as required Total $1.08 $0.39 $2.75 $0.50 $4.72

Notes: A – based on quote from Aquasonic, Sydney (does not include freight charges) B - based on quote from RMAX Western Australia. Prices are ex factory, with 22% wholesale tax applicable C -based on Willis, (1999) - does not include cost of corporate labelling/logos.

The weight of boxes will vary depending on the type of box, the fish being transported, and the amount of water the fish are packed in (Willis, 1999). However, discussions with industry members indicate that boxes weigh between 12 and 13kg, with an average of 12.5kg. Based on the prices for packaging provided above and transport costs from the preceding section, the following estimates for the cost of transporting a box of fish to various markets is provided.
Table A2.13 Summary of cost of packaging and freight for interstate and international markets
Destination Perth Adelaide Melbourne Sydney Brisbane Singapore Hong Kong Tokyo Los Angeles Europe
A B

Packaging cost $4.72 $4.72 $4.72 $4.72 $4.72 $4.72 $4.72 $4.72 $4.72 $4.72

Transport cost A $24.00 $42.00 $48.00 $48.00 $54.00 $42.00 $48.00 $66.00 $78.00 $78.00

Total per box B $28.72 $46.72 $52.72 $52.72 $58.72 $46.72 $52.72 $70.72 $82.72 $82.72

Based on an average of 12kg per box Does not include the surcharge fee applicable to each consignment

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11.3

Ornamentals Producer Survey Results

The producer survey conducted as part of this study aimed to enhance the information currently available through normal channels. Furthermore, the survey attempted to obtain the views of producers of ornamental fish in Australia and their perception of the market. A total of 57 commercial breeders were surveyed and seven responses were received. It is thought that the poor result was most likely due to other producers considering the GIAG as potential competition.
11.3.1 General findings

The general findings from the survey included: • Reducing prices to establish market share can be effective, however, once prices are reduced it is difficult to raise them. • Ornamental fish farms generally incorporate smaller farm units than food fish farms, and they are typically family based businesses with larger corporate farms being rare. • Freight is a major cost component for both producers and wholesalers, with this cost often being a determining factor in the economics of a farm. • The industry is fractured, generally characterised by a lack of cooperation between producers. • An industry association could be beneficial in providing cohesion and undertaking cost effective promotion on behalf of the industry. • There is considerable resistance to entry in the marketplace. • Unlicensed production by backyard operators or hobbyists is of major concern to producers. Commercial operators are required to meet specific government licensing criteria which is costly. Backyard operators or hobbyists are generally not obligated to pay fees or comply with regulations and can therefore cut corners and costs. • Changes to AQIS regulations and the imposition of the GST make the current business climate uncertain. Profitability may be decreased due to these changes. • It may be prudent for new entrants to avoid competing with experienced producers. This could be achieved by producing different species or finding new markets, the later being more difficult. • The use of disease-free accreditation and other forms of quality assurance may provide useful points of differentiation.
11.3.2 Domestic production levels

The majority of producers surveyed (86% of respondents) indicated that Australian production of ornamental fish is likely to continue to expand. This supported the findings of Willis (1995). Likewise, 86% of respondents indicated that they were intending to expand their own production capacity to meet demand for locally produced fish. The intended increase varied from 10% to 1,000%, with an average of 301%. This could explain the reluctance of many producers to provide market information. The majority of producers surveyed were unable to provide details on the number of ornamental fish produced in Australia. Current domestic production levels were therefore based on analysis of previous surveys (Willis, 1995; PSM, 1999) and further discussions with key industry players. The following table presents these production estimates.

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Table A2.14 Industry estimates of the numbers and species of ornamental fish currently produced in Australia
Species Grouping Cichlids Catfish Common goldfish Fancy goldfish Koi carp Gouramis Livebearers Tetras Barbs Rainbows Saratoga Other natives Total Estimated Production (‘000) 183 146 3,703 Neg 3,260 110 270 480 360 70 6 10 8,598 Estimated Number of species 90% of production would be 4 sp. 20 1 1 1 12 4 30 15 20 2 25 164

This production is somewhat higher than that quoted in PSM (1999) and in official production statistics.
11.3.3 Market Niches

All respondents to the producer survey indicated that there are market niches that have not yet been exploited in Australia. Such opportunities were indicated to include the production of livebearers and rarer types of native fish. No other data on potential markets for these species were provided.
11.3.4 Purchasing Criteria

The results of the producer survey with respect to purchase criteria are similar to that of the customer survey, with quality, price and consistency of supply having the same rankings in both surveys. This confirms that these aspects of service are fundamental to successful entry into the industry. It was also suggested that price and quality may be interchangeable criteria for some customers, whereby lower quality fish would be purchased at reduced prices (Greg Willis, Tasmanian Ornamental Fish Farm, pers. comm., 2000). The following table lists the rankings provided by producers against purchase criteria, with the highest ranking being 1 and the lowest ranking being 5.

Table A2.15 Producer rankings for purchase criteria
Criteria Quality of fish Price of fish Consistency of supply Range of species or varieties Numbers or volume of fish 1 5 1 0 0 1 2 1 6 0 0 0 Ranking 3 0 0 6 0 1

4 1 0 1 1 4

5 0 0 0 6 1

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Thus the survey indicates that producers consider the most impo rtant criteria for their customers in order of importance to be those shown in Table 6.15. Other than price, these criteria can be summarised as being issues relating to quality control. Industry sources suggest that if there is consistency in fish quality, customers are generally happy to pay a reasonable price. The criteria ranked 6, 7 and 8 suggest that the health of the fish in terms of disease and stress levels play an important role in the purchasing process. Thus, producers must ensure that fish are disease free, through the use of prophylactic treatments prior to transport, and that all reasonable steps are taken to ensure stress levels are minimised during transport. Shariff and Subasinghe (1992) note that stress during transit may account for a large proportion of mortalities that occur during and just after transport.
Table A2.16 Consumer purchasing decision model in ranking of importance to customers
Ranking 1 2 3 4 5 6 7 8 9 Criterion Quality of fish Price of fish Consistency of supply by producers Numbers or volumes of fish supplied Variety or number of different types of fish that can be supplied Condition of fish on arrival at the customers Disease status of fish Whether fish are true to type (what the customer wants) Consistent size (grading) of fish

The issue of fish being 'true to type' is also an important issue. Different species and different varieties of species are often grown together (Brown & Gratzek, 1982; Willis, 1995). During harvesting and grading, fish of different species or varieties may remain mixed due to poor techniques and quality control. As a consequence, batches of fish may be sold that are not 'true to type'. It is important that new entrants implement quality control measures to ensure that their fish are correctly sorted prior to shipment and are 'true to type'. Criterion 9 relates to consistency in the size of fish. Fish are normally sold at a given length (eg. 3.5 cm for male guppies). However, size may vary from just under 3.5 cm up to 4 cm (Glenn Briggs, Aquarium Industries, pers. comm., 2000). It is difficult to produce fish of exactly the same length (Willis, 1995), but good fish husbandry and regular grading can minimise size variation within a batches of fish. Ideally, this variation should be as small as possible, with 0.5 cm being an accepted maximum variation (Greg Willis, Tasmanian Ornamental Fish Farm, pers. comm., 2000). Fish that do not lie within the tolerance for the specified length should not be shipped. Other criteria indicated as important include the condition of fish on arrival at the customers, the disease status of fish and whether fish are true to type (are they what the customers wants). These points indicate that the health of the fish in terms of disease and stress levels play an important role in purchase criteria. Thus, particular importance must be paid to ensuring fish are disease free through prophylactic treatments
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prior to transport, and that all steps are taken to ensure stress levels are minimised during transport. Shariff and Subasinghe (1992) note that stress during transit may account for a large proportion of mortalities that occur during and just after transport.
11.3.5 Loyalty of Australian customers

The loyalty of Australian customers (wholesalers and retailers) appears somewhat limited from the producers perspective, with 67% of respondents indicating that their customers are generally not loyal. While some producers maintain strong alliances with wholesalers, in general wholesalers tend to shop around to find the best deal (in terms of quality and price). An oversupply in the market can quickly lead to a necessity for producers to reduce their prices and for some customers to change suppliers (Greg Willis, Tasmanian Ornamental Fish Farm, pers. comm., 2000). Several producers also indicated that larger wholesalers tended to show more loyalty to producers, with smaller wholesalers being more concerned about purchasing at the lowest price than showing loyalty to producers.
11.3.6 Labelling as Australian Produced Fish

The potential benefits to labelling or differentiation of locally produced fish as being ‘Australian Made’ has been raised previously (Lee, 1992; Willis, 1995). In this survey, 57% of respondents indicated that the labelling of local produced fish as such, assists sales. It was noted that while labelling may differentiate locally produced fish and promote their sales, it is very difficult to ensure this continues along the distribution chain. Producer sales of ornamental fish are generated by a ‘derived demand’ provided by wholesalers and retailers (Willis, 1995). Therefore, if retailers do not promote Australian produced fish over imported fish, demand for locally produced fish will not be affected. The practicality of maintaining labelling integrity through the chain is also a point of concern. Some members of the distribution chain choose not to provide adequate labelling or to substitute imported fish under the local label (Willis, 1995). These issues would need to be addressed before labelling could be used effectively as a marketing tool. One of the compelling reasons for industry members to form an association would be to promote Australian produced fish over imports.
11.3.7 Producer problems

While the importance of particular problems facing individual farms varies, the problems identified by producers seem to have a similar level of importance to the industry as a whole. The issue of changes to AQIS regulations and the effects that it may have on demand and prices for local producers appears to be one of the bigger issues at present. The following table provides a ranking of problems facing Australian producers, with the highest ranking being 1 and the lowest ranking being 5.
Table A2.17 Producer rankings for problems facing the industry
Problem Competition from imports Changes to AQIS regulations Low Prices of fish Disease Lack of government support Ranking 1 2 0 1 1 4 2 1 2 0 1 1

3 5 0 2 1 0

4 0 2 1 3 0

5 1 0 1 1 4

No additional problems were indicated by producers, however, Willis (1995) also reported the following problems identified in his study:
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• • • •

lack of expertise and expertise within the industry; difficulty in attaining finance for new and existing enterprises; lack of industry standards, benchmarks and co-operation within the industry; lack of government assistance or acknowledgment of ornamental aquaculture as a legitimate industry; and • legislative inconsistencies between states in regard to licensing requirements, noxious species and farming practices.
11.3.8 Likely Impact of changes to the Quarantine System

Producers appear to have a more negative view of the impact of AQIS changes on the industry when compared to their customers. Of the respondents, only 14% indicated that the changes to AQIS import regulations will have little or no impact on the Australian industry. In regard to the impact on demand for locally produced fish, 28% indicated that there will be an increase in the demand for locally produced fish, while 57% indicated there would not be an increase in demand. No respondents indicated that they considered that the price of local fish would increase, with 86% indicating that they believed there would be no increase in the price of locally produced fish. Table A2.18 incorporates the responses to the questions regarding the impact of AQIS changes to the industry.

Table A2.18 Likely impact of changes to the Australian Quarantine System
Criterion No impact or change for industry Increase the demand for local fish Increase the price for local fish Yes 14 28 0 Response (%) No 0 57 86 No response (%) 86 15 14

Other likely impacts were noted as an increase in the level of disease importation risks and an increase in black market for some species.

11.4

Summary of Production Assessment Findings

11.4.1 Culture practices

In this section, industry culture practices are reviewed for each of the ornamental fish groups as well as native food fish advanced juveniles. The fundamental difference between ornamental and food fish is reported to be the purpose of the end product. Food fish production is aimed at producing a fish for eating, generally as a live, fresh or frozen product, whereas ornamental fish are produced for their ornamental or aesthetic value and are always sold live. As a consequence, production techniques for ornamental fish are aimed at producing fish that have no body or fin deformities, no mechanical damage to the skin and scales, good colour, excellent health and survivability, and conform to industry quality standards. In general, a higher level of control is required for ornamental fish to ensure that the product reaches consumers in a healthy and aesthetically pleasing state.

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11.4.2 Most appropriate species for GIAG

Considerable skill, time and effort is required for commercial production of ornamental or food fish production, otherwise large scale mortalities or slow growing fish will limit sales. The opportunities for GIAG members are discussed under a number of production issues: • • • • • • • • • Level of Skill Labour Input Capital Requirement Feed Requirements Crop Cycles Breeding & Broodstock Environmental Limitations Transport and Distribution Packaging

An analysis of these production issues for GIAG is provided in Table A2.19. The assessment indicates that the most appropriate species groups (ie. received an “A” ranking) include: • • • • • common goldfish koi carp live bearers barbs native food fish advanced juveniles

Five other groups recorded a moderate ranking (“B”) whilst another four groups received the lowest ranking (“C”). In examining these rankings, several issues should be considered: • aquaculture is likely to be a secondary enterprise for members of GIAG, limiting time and capital resources, so the easy to culture and inexpensive to produce species are the most appropriate; • artificial or pelleted diets are much easier and cheaper to provide than live feeds; • deleting the requirement for broodstock and a breeding program, as with the native food fish, further reduces capital and operating costs; • selective breeding can take several generations, so the initial purchase of high quality broodstock is critical for successful production; • if outdoor culture in ponds or tanks is to be undertaken, some expense will be required to shade or protect the fish from unsuitable climatic conditions (such as harsh sun, wind blown dust and debris, torrential rain); and • it is critical that packing and transport methods are of ‘best practice’ standard otherwise significant losses of fish will occur – the further the distance to be travelled, the greater the likelihood that problems will occur.

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Table A2.19 Summary of Production Assessment
Species Grouping Level of Skill 1,2 1,2 3 2,3 3 2 3 2 2,3 1 2,3 1 1,2 3 Labour Relative Input Capital Req. 1 1 1,2 1,2 3 3 2 2,3 3 2,3 2 1,2 2,3 3 1,2 1 2 1,2 3 3 2,3 2,3 2 2,3 1,2,3 2,3 2 3 Feed Req. 2 2 2 2 2 1 3 1 2 3 1 2 1,2 3 Crop Cycle 1 1 2 1 2 2 1,2 2,3 2 1 1 2 1,2 1* Envir. Limitation 1 1 2 2 2 2 2 1 2 2 2 2 2 2 Breeding Packaging Ranking

Cichlids Catfish Common goldfish Fancy goldfish Koi carp Gouramis Livebearers Tetras Barbs Walking fish Rainbows Saratoga Other natives Native advanced juveniles
LEGEND

1,2 1,2 3 3 3 1 3 1,2 2 2 3 1 1,2 N/A

2 2,3 3 1,2 2 2,3 3 3 3 2 1,2 1 1,2 3

C C A B A B A C A B B B C A

Level of skill (husbandry required): Labour input: Relative Capital Req: Feed Req (expense / skill):

1 = High 1 = High 1 = High 1 = Difficult live feed

2 = Medium 2 = Medium 2 = Medium 2 = Simple live feed 3 = Artificial feed 2 = 14 – 16 weeks 3 = 12 – 14 weeks 2 = easy 2 = moderate 2 = moderate 3 = high densities B = medium prod'n potential C = low prod'n potential

3 = Low 3 = Low 3 = Low

Throughput (crop rotation):

1 = 16 + weeks

Environmental limitations: Breeding: Packaging densities #

1 = difficult 1 = difficult 1 = low densities

3 = easy

Ranking

A = high prod'n potential

* In the case of Native Food Fish, market demand is assumed to be for over-winter stock, thereby limiting number of crops per year Assessment assumes availability of brood stock
#

it is assumed that packing densities will vary with distance to markets

N/A: As it is assumed GIAG will purchase fingerlings from hatcheries, breeding requirements are not applicable

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11.4.3 Recommendations for GIAG

It is obvious that the industry is growing (in terms of both supply and demand), and established producers are expanding significantly. The influence of the new quarantine regulations is yet to be determined, however, it is likely that imports will continue to be a major source of supply to the industry. The effects of the GST and associated taxation reform are unknown, however, it is likely to eliminate unlicensed (‘hobby’) sellers which could in turn, increase demand for product sourced from licensed farmers. Also it is possible that some small pet shops will be forced to close. Some of the recommendations for GIAG members obtained from the survey include: • set a market price that allows profitability; • look for ways to reduce freight costs; • resistance towards new entrants in the marketplace could be overcome by disease free accreditation, and other forms of quality assurance to provide points of differentiation; • try not to compete against current producers, ie. produce fish not being grown in Australia; • target market niches such as livebearers and rarer types of native fish; • concentrate on quality, price and consistency of supply, also ensure that the fish are correctly sorted prior to shipment and are 'true to type’ and size; • establish relationships with larger wholesalers who tend to show more loyalty to producers; and • label or differentiate locally-produced fish as being ‘Australian made’ can assist with marketing.

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12. APPENDIX 3 - CUSTOMER SURVEY
SURVEY OF BUYERS OF ORNAMENTAL SPECIES
The following survey is being conducted by PSM Group to investigate key aspects of the marketing of ornamental fish in Australia. In return for completing this survey form, all of the collated data for both producers and buyers of ornamental fish in Australia will be provided to you. It is expected that this will provide you with information that is generally unavailable to the industry at this time. Please note that all of the data gathered on specific buyers will remain confidential. Only data that have been aggregated will be released. We expect that completion of this survey will take approximately 5 to 10 minutes to complete.

Company: Address:

………………………………………………………………….. ………………………………………………………………….. …………………………………………………………………..

Phone: Fax: Email Contact:

………………………………………………………………….. ………………………………………………………………….. ………………………………………………………………….. …………………………………………………………………..

1. In what order of importance do you rank the following criteria when purchasing ornamental fish? (Rank from 1 to 5; most important to least important) …… Price …… Quality of fish …… Numbers of fish …… Consistency of supply …… Range of fish or varieties of fish 2. Are there any other criteria that you think are important? ………………………………………………………………………………………………………………….. ………………………………………………………………………………………………………………….. …………………………………………………………………………………………………………………..

3. Do you currently purchase ornamental fish from local producers? 4. If yes, please state why.

Yes No

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5. Have you changed suppliers of ornamental fish recently? 6. If yes, please state why.

Yes No

………………………………………………………………………………………………………………….. …………………………………………………………………………………………………………………..

7. What percentage of the fish do you source from local producers?

……%

8. What market opportunities do you see for a new producer entering the market place? Please indicate the species, approximate volume of fish you might buy and at what price.

Species

Volume (fish/wk)

Price/fish

9.

In general terms, how do Australian produced fish compare with imported fish on the following criteria? (Please tick the appropriate box.)

Criteria Price Quality Consistency of supply Customer service Varieties

Better

Worse

Same

10. In what ways do you believe Australian producers could improve to make their products more competitive compared to imported supplies of ornamental fish? ………………………………………………………………………………………………………………….. …………………………………………………………………………………………………………………..

11. Do you think the labelling of locally produced fish can improve sales?

Yes No

12. What impacts do you think that the upcoming changes to the quarantine system will have on the market for ornamental fish in Australia? None at all PSM Group Pty Ltd 23 May 2000 Yes No Page: 137

Gascoyne Ornamental Fish Industry – Consultants' Report Increase demand for local fish Increase price of local fish Yes No Yes No

13. Are there any other impacts likely to result from these changes? ………………………………………………………………………………………………………………….. ………………………………………………………………………………………………………………….. …………………………………………………………………………………………………………………..

14. Do you have any other comments to make? ………………………………………………………………………………………………………………….. ………………………………………………………………………………………………………………….. …………………………………………………………………………………………………………………..

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13. APPENDIX 4 – PRODUCER SURVEY
SURVEY OF PRODUCERS OF ORNAMENTAL SPECIES
The following survey is being conducted by PSM Group to investigate key aspects of the marketing of ornamental fish in Australia. In return for completing this survey form, all of the collated data for both producers and buyers of ornamental fish in Australia will be provided to you. It is expected that this will provide you with information that is generally unavailable to the industry at this time. Please note that all of the data gathered on specific producers will remain confidential. Only data which have been aggregated will be released. We expect that completion of this survey will take approximately 5 to10 minutes to complete.

Company: Address:

……………………………………………………………….. ……………………………………………………………….. ………………………………………………………………..

Phone: Fax: Email Contact:

……………………………………………………………….. ……………………………………………………………….. ……………………………………………………………….. ………………………………………………………………..

The following table includes estimates for ornamental fish production in Australia for 1997/98. This is based on data provided by AQIS.
1. Do you think the current levels of ornamental fish production in Australia differ from the 1997/98 figures? If so, please indicate your estimate in the column provided. Do you think that the current levels of production will change next year? If so, please indicate by what percentage. Species Group 1997 – 98 (,000s of fish) 2,113,900 Nil 1,200,000 2.6 37 390 65 133 480 67 3.7 302 23 May 2000 Page: 139 Current Year (,000s of fish) Next Year (% change ie +20%, 0%, -10%)

2.

Common goldfish Fancy goldfish Koi carp Barbs Catfish Livebearers Bubble nest breeders Cichlids Tetras Rainbows Other natives Other PSM Group Pty Ltd

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3. Do you expect to expand your current level of production in the future? 4. If so, by what percentage? 5. Do you think that the production of ornamental fish in Australia will continue to expand? 6. Do you think there are any market niches not currently serviced by local producers? 7. If so, what types of fish (species) do you think could fill these niches?

Yes

No

………. % Yes Yes No No

………………………………………………………………………………………………………………….. ………………………………………………………………………………………………………………….. ………………………………………………………………………………………………………………….. 8. In what order of importance do you think that your buyers rank the following criteria when purchasing ornamental fish? (Rank from 1 to 5; most important to least important) …… Price …… Quality of fish …… Numbers of fish …… Consistency of supply …… Range of fish or varieties of fish 9. Are there any other criteria that you think are important to your buyers? ………………………………………………………………………………………………………………….. ………………………………………………………………………………………………………………….. …………………………………………………………………………………………………………………..

10. Do you think customers in the industry are generally loyal to Australian producers? 11. How would you rank the following issues that you as a producer faces? (Rank from 1 to 5; most important to least important) ……Competition from imports ……Changes to AQIS regulations ……Low prices ……Disease ……Lack of government assistance 12. Are there any other major issues of importance to you as a producer?

Yes

No

…………………………………………………………………………………………………………………..

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Gascoyne Ornamental Fish Industry – Consultants' Report ………………………………………………………………………………………………………………….. ………………………………………………………………………………………………………………….. 13. Do you think the labelling of fish as Australian or locally produced fish improves sales? Yes No

14. What impacts do you think that the upcoming changes to the quarantine system will have on producers of ornamental fish in Australia? None at all Increase demand for local fish Increase price of local fish 15. Are there any other impacts likely to result from these changes? ………………………………………………………………………………………………………………….. ………………………………………………………………………………………………………………….. ………………………………………………………………………………………………………………….. Yes No Yes No Yes No

16. Do you have any other comments? ………………………………………………………………………………………………………………….. ………………………………………………………………………………………………………………….. …………………………………………………………………………………………………………………..

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14.

APPENDIX 5 - Export of live Australian Native Fish

Summarised from EA Information sheet No. 26
ABOUT WILDLIFE IMPORT AND EXPORT CONTROLS 〈 The Wildlife Protection (Regulation of Exports and Imports) Act 1982 (the Act) is the legislative basis for conservation-orientated controls on the export and import of wildlife and wildlife products. Controls under this Act apply to transactions undertaken by museums, zoos, scientific institutions, commercial organisations, tourists, migrants and the general public. 〈 The Act controls the export of most Australian native animals and plants and fulfils Australia’s legislative requirements as a signatory to the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES). The Act regulates the importation of most live animals and plants. These controls are in addition to those exercised under the Quarantine Act 1908.

EXPORT OF LIVE NATIVE FISH 〈 The export of native live fish requires approval from Environment Australia. There are several species of fish that are exempt from this requirement and these species are listed on Schedule 4 to the Act. Approvals to export live native fish may be given where the fish have been bred in captivity or taken under an approved harvesting/collecting program. 〈 〈 Permits to export live native fish are valid for one consignment. To export captive bred fish, a copy of a State Aquaculture permit indicating the species held in captivity will need to be provided with the application to export. Proposals for harvesting or collecting native fish will be considered where there is sufficient information concerning the biology of the species subject to harvesting/collecting and the role of that species in the ecosystem in which it occurs. The relevant authorities of the States and Territories must be consulted and the program must contain measures to ensure that the taking of the species from the wild is not detrimental to the survival of that species or its habitat. Authorities may be obtained for exporting multiple consignments of live native fish. The exporter fills out the export documentation. Please contact Wildlife Protection of Environment Australia for further information on Authorities.

GENERAL INFORMATION Permit Applications An Australian permit must be issued prior to the consignment of the specimens. Application forms are available from Wildlife Protection. PLEASE NOTE that failure to obtain an Australian permit prior to consignment of the specimens may result in confiscation. Severe penalties exist for persons or companies breaching the Wildlife Protection Act. Permit Fees The fee for a permit is $30. Fees can be paid by credit card, cheque or money order and should be made payable to the 'Collector of Public Monies'. In cases where permits are not issued the fee will be refunded. Other Approvals The import and export of wildlife and wildlife products may also be subject to controls administered under the Quarantine Act. Information about quarantine matters may be obtained by contacting the Australian Quarantine and Inspection Service (AQIS), GPO Box 858, Canberra ACT 2601, phone 02 6272 3933.

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The information above is subject to change in order to reflect changes to the Wildlife Protection (Regulation of Exports and Imports) Act 1982 and to meet Australia’s commitment to the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES).

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15. APPENDIX 6 - SCHEDULE 4 EXEMPTED SPECIES
As of 21 April 1999 Schedule 4 Wildlife Protection (Regulation of Exports & Imports) Act 1982 (the Act)
SCHEDULE 4 (Section 23) SPECIMENS THAT ARE, OR ARE DERIVED FROM, NATIVE AUSTRALIAN ANIMALS OR NATIVE AUSTRALIAN PLANTS AND THE EXPORT OF WHICH IS NOT PROHIBITED BY PARAGRAPH 21(B) PART 1 - SPECIMENS A specimen that is, or is derived from, a marine fish, excluding the Suborder Syngnathoidei (Family Syngnathidae, seahorses, seadragons and pipefish and Family Solenostomidae, ghost pipefish) sensu Zoological Catalogue of Australia Vol.7 1989. A specimen that is, or is derived from, a fish of the species Lates calcarifer (barramundi). A specimen, other than a live animal, that is or is derived from the order Lepidoptera (butterflies and moths), which has been bred in captivity, which is the personal property of a person departing Australia or an external Territory and which is not intended to be used for any commercial purpose, including sale, lease, hire or exchange. A specimen, other than a live animal, derived from one or more of the following species of kangaroo (family Macropodidae) which is the personal property of a person departing from Australia or an External Territory and which is not intended to be used for any commercial purpose, including sale, lease, hire or exchange. • • • • • • • Macropus fuliginosus (kangaroo, western grey) Macropus giganteus (kangaroo, eastern grey) Macropus parryi (wallaby, whiptail) Macropus robustus (euro) Macropus rufogriseus (wallaby, Bennett's) Macropus rufus (kangaroo, red) Thylogale billardierii (wallaby, rufous)

A specimen that is, or is derived from, an invertebrate of a genus, species or sub-species specified in Part II. A seed (other than a seed of the species Wodyetia bifurcata / foxtail palm), pollen, tissue culture or flasked seedling culture of Australian native plants. Fruit (whether or not containing seeds or spores) not attached to any part of a plant. Timber, bark and woodchips. An article derived from timber. Oil derived from Eucalyptus species, Melaleuca alternifolia or Melaleuca linariifolia. s:\wpa\act\schedule\sched4-apr99.doc PSM Group Pty Ltd 23 May 2000 Page: 144

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A specimen that is, or is derived from, a plant that has been artificially propagated or has been taken in accordance with the program for the management in Western Australia of commercially harvested protected plants approved by the Minister for the Arts, Sport, the Environment, Tourism and Territories pursuant to Section 10 of the Wildlife Protection (Regulation of Exports and Imports) Act 1982, and is the personal property of a person departing from Australia or an external Territory and which is not intended to be used for any commercial purpose, including sale, lease hire or exchange. A specimen that is, or is derived from, a fish of the species Anguilla australis or the species Anguilla reinhardti. Honey. Faeces. A specimen, other than a live animal, derived from the species Trichosurus vulpecula (Brush possum), which has been taken in accordance with an approved management program, which is the personal property of a person departing Australia or an external Territory and which is not intended to be used for any commercial purpose, including sale, lease hire or exchange. Gut contents for the purpose of prescribed scientific research. A specimen, other than a live animal, derived from the species Dromaius novaehollandiae (emu), which has been bred in captivity, which is the personal property of a person departing Australia or an external Territory and which is not intended to be used for any commercial purpose, including sale, lease, hire or exchange. A specimen, being a manufactured article: (a) produced from the population of Crocodylus porosus or Crocodylus johnstoni in Australia: (i) bred in captivity; or (ii) taken under an approved management program; and (b) that is: (i) the personal effect of a person departing for a foreign country: and (ii) not intended for sale, lease, hire or exchange or any other commercial purpose; and (iii) accompanied by a Personal Effects Permit Exemption label which has been approved for the purposes of Article VII 3 of the Convention by the Designated Authority.

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PART II INVERTEBRATES
Phylum Class Order Family Genus, species or sub-species / (common name) Marinauris roei (Roe's) Notohaliotis ruber (blacklip) Schismotis laevigata (greenlip)

MOLLUSCA

STREPTONEURA (PROSOBRANCHIA)

Haliotidae (abalone)

Trochidae (top shells) Trochus maximus Trochus niloticus Turbinidae (turban shells) Littorinidae (periwinkles) PELECYPODA (LAMELLI- BRANCHIATA) Mytilidae (mussels) Turbo spp

Subninella undulata (periwinkle) Mytilis edulis planulatus (mussel)

Pectinidae (scallops) Amusium balloti (saucer) Equichlamys bifrons (queen) Mimachlamys asperrimus (doughboy) Pecten alba (Tasmanian, commercial) Pecten fumata Pecten meridionalis Pecten modestus Ostreidae (oysters) Crassostrea commercialis (Sydney or NSW rock oyster) Crassostrea tuberculata (Western rock oyster) Ostrea angasi (oyster) Pinctada margaritifera (blacklip mother-of-pearl) Pinctada maxima (silverlip) Pinctada sugillata (mother-of-pearl) Katylesia spp (cockle) Plebidonax deltoides (pipi, surf clam)

Pteriidae (Mother-of-pearl shells)

Donacidae (pipis, cockles)

CEPHALOPODA

Octopoda (octopus) Decapoda

Octapodidae

Octopus tetricus

Loligo etheridgei Page: 146

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23 May 2000

Gascoyne Ornamental Fish Industry – Consultants' Report

(cuttlefish, squid)

Notodarus gouldi (Gould's squid) Onnastrephes bartramii Ornithoteuthis volatilis Sepioteuthis australis (southern calamari squid) Symplectoteuthis ovalaniensis Syntletoteuthis luminosa Todarodes filippovae Sepia spp (cuttlefish) All species of ALPHAEIDAE (clicker, pistol, (prawns) or musical prawns) Hymenopenaeus sibogae (royal red prawn) Metapenaeus bennettae (greentail prawn, greasy-back) Metapenaeus dalli (western school prawn) Metapenaeus eboracensis (York prawn) Metapenaeus endeavouri (endeavour prawn) Metapenaeus macleayi (school prawn) Parapenaeopsis sculptilis (rainbow prawn) Penaeus esculentus (brown tiger prawn) Penaeus latisulcatus (western king prawn) Penaeus longistylus (red spotted prawn) Penaeus merguiensis (banana prawn) Penaeus plebejus (eastern king prawn) Penaeus semisulcatus (green tiger prawn, grooved tiger prawn) Ibacus incisus (flapjack or Balmain bug) Ibacus peronii (shovelnose lobster) Jasus novaehollandiae (= lalandei) (southern rock lobster - crayfish) Jasus verreauxi (green rock lobster, eastern rock lobster) Page: 147

Sepiidae CRUSTACEA NATANTIA Alphaeidae

Penaeidae

REPTANTIA

Austroastocidae

PSM Group Pty Ltd

23 May 2000

Gascoyne Ornamental Fish Industry – Consultants' Report

Panulirus homarus (tropical rock lobster) Panulirus longipes (painted cray) Panulirus longipes cygnus (western rock lobster) Panulirus longipes fermoristriga (tropical rock lobster) Panulirus ornatus (tropical rock lobster) Panulirus penicillatus (tropical (crayfish) rock lobster) Panulirus polyphagus (tropical rock lobster) Panulirus versicolor (tropical rock lobster) Thenus orientalis (bay lobster) BRACHYURA (crabs, yabbies) shrimp) Portunidae (crabs) Portunus pelagicus (sand crab, blue swimmer) Ranina ranina (spanner or frog crab) Scylla serrata (mud crab) Cherax destructor-albidus (yabbie) Cherax tenuimanus (marron) Eustacus armatus (Murray lobster - freshwater crayfish) Macrobrachium rosenbergii (freshwater shrimp) Onuphis teres (beach worm) Strongylocentrotidae Heliocidarus spp (sea urchin)

Parastacidae (yabbies, shrimp)

ANNELIDA ECHINODERMATA

POLYCHAETA ECHINOIDEA (sea urchins) HOLOTHUROIDEA (sea cucumbers, beche-de-mer)

Stichopus variegatus (red prickly fish Actinopyga obesa (red fish) Holothuria mammifera (black or teat fish)

PSM Group Pty Ltd

23 May 2000

Page: 148

Gascoyne Ornamental Fish Industry – Consultants' Report

16. APPENDIX 7 - International Air Transport Association (IATA) Live Animal Regulations (LAR) 1998
The IATA-LARs, which are updated each October, apply to anyone moving animals on major airlines. In the past they have been produced in three languages: English, French and Spanish. This year a Chinese edition has been produced. The LARs cover a whole range of issues – they run to over 300 pages in length. For the carriage of fish the principal container requirements to be followed are: Container Requirement 51 applies Fish, Goldfish and Tropical Fish, Octopus and Water Snail. Change: this year a requirement reading "Tropical fish insulation must be provided by the shipper within each unit to ensure-a suitable temperature of 20 degrees C (68 degrees F) for the longest possible period" is in place. Container Requirement 52 describes the transport methods to be used for the transport of koi carp (40-75cm in length), other fish up to 100cm, sharks (between 40 - 100cm) and sturgeon. Change: this year a requirement for "Facilities for oxygenation must be arranged at the destination, in the event of the transport process being extended beyond the anticipated time frame". Container Requirement 56 applies to all live corals but must not apply to rock devoid of coral. No change since 1997. Other container requirements apply to the transport of eels, crustacea, molluscs, amphibians and reptiles. Labelling The shipper is responsible for ensuring that boxes of fish are labelled-correctly. Failure to do this can lead to considerable delays in veterinary inspection or Customs clearance in some countries. Though the requirements haven't changed the requirements are listed below for reference: • markings must be durable and printed, or otherwise marked on or affixed to the container's external surface • English must be used in addition to the language required by the state of origin. • Each box must be marked with the following: • full name and address and contact number of the shipper and consignee or other 24 hour contact • the scientific and common name of the animals and quantity of each in the container, as shown on the shippers certificate • containers carrying animals which can inflict poisonous bites or stings must be boldly marked "POISONOUS" • tranquillisation is not advocated • at least one "Live Animal" label of the approved size, colour and print must be put on each container • a "This Way Up" label of the approved size, colour and print should be put on each -side of the box • the local time and date of packing • acceptable temperature range at which fish can be stored For most fish the requirement to pack them to survive for 48 hours from the time of acceptance by the airline remains in place.

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Page: 149

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