Ecolabelling of Seafood: The Basic Concepts - SEAFOOD Ecolabelling: Principles and Practice - page 9

increment that will need to be imposed if the fishery becomes ecolabelled. Either
such fisheries will not submit for ecolabelling and so be identified as weak envi-
ronmental performers, or they will suffer a price disadvantage in the market and
potentially loss of market share, in both cases working to reduce environmental
impacts.
Second, through creating a market-pull by consumers, ecolabelling programmes
may enhance the price consumers are willing to pay for ecolabelled products.
This may in turn tend to increase production of labelled products. This will only
be beneficial if the ecolabel programme is designed to assess and verify that the
industry management systems are robust and can apply appropriate controls in
response to an increased demand for ecolabelled product.
On the opposing side, there may also be some perverse impacts of ecolabelling.
By internalising the costs of achieving a specific level of sustainability and creating
a higher price for ecolabelled products, the price for competing products that are
not ecolabelled (and may be much less sustainable) may also rise to maintain a
small margin of price advantage between the labelled and unlabelled products.
This essentially offers a 'free ride' for the competing products in any markets
where ecolabelling is considered to have a price effect, because in most seafood
markets, the ecolabelled product only accounts for a small proportion of seafood
sold. Although 22 fisheries are certified and about 60 further fisheries are engaged in
the MSC certification and ecolabelling programme, this currently accounts for only
about 7% of all wild-caught seafood sales (Chapter 4). Any increase in price for non-
labelled products may result in increased levels of production (including increased
pressure on wild stocks) from the less sustainable ventures. Minimising the costs
associated with ecolabelling assessments is one way of reducing the incentive for
non-compliance because it reduces the price increment that needs to be passed on
to consumers to cover compliance costs alone (Wessels et al . 2001), although this is
not necessarily the only basis for setting prices. Other perverse effects include the
'shield' effect (Sutton 2003) as used in Australia's Western Rock Lobster Fishery,
where the achievement of MSC certification is used by the fishery managers to
prevent the introduction of marine reserves in Western Australia's waters, using the
argument that the fishery is sustainable and so reserves are not needed to protect
biodiversity and would unfairly affect the industry.
The benefits for fishery industries from participating in an ecolabelling pro-
gramme include the potential for:
increased price, market share or market access, created by the market-pull for
more sustainable products;
increased industry standing for ecolabelled products and related products and
industries;
increased attractiveness for investment capital; and
increased internal cohesion in the sector, responding to the common perception
of benefits flowing from ecolabelling.