Thursday, 29 January 2015

Fish Farm Boom Bust Cycle – Buying up the Competition, Barriers to Entry

Along with the boom bust cycle that drives global fish farming, to the detriment of employees, revenues and the environment, the big get bigger and the smaller companies get bought out; this results in barriers to entry as new fish farm companies cannot compete with the market prices their much larger competitors can produce fish at.

Barriers to entry cause cartels and monopolies. The larger firms, in this case Marine Harvest, keep on getting bigger and competition keeps slipping away.

Marine Harvest Buys Majority Stake in Chile's Top Salmon Producer, AquaChile
SEAFOODNEWS.COM [SeafoodNews] January 19, 2015

Marine Harvest has agreed to purchase nearly 43 percent of major Chilean salmon producer AquaChile in a deal that also gives the major Norwegian salmon producer the option to acquire at least 55 percent of the company starting in the middle of 2016.

Under the initial tender offer Marine Harvest will pay $0.8856 per share...

See my recent article on boom bust cycles in fish farms:

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