Mainebiz

W W W. M A I N E B I Z . B I Z 9 A P R I L 1 , 2 0 1 9 Once stymied by China tariff, lobster dealer finds a workaround B y L a u r i e S c h r e i b e r Y o r k — Tom Adams, CEO of Maine Coast lobster wholesale company in York, said he's found ways to make up revenue that was lost when a 25% tariff was implemented last July on imports of lobster to China. The tariff has taken a bite out of his company's sales, Adams said. Previously, China had been Maine Coast's fastest growing market, but the tariff eliminated 80% of Maine Coast's sales to mainland China. Overall, the value of live Maine lob- sters exported to China dropped 64% in July 2018, compared with July 2017, according to industry figures. China now gets most of its lobster from Canada. Adams told Mainebiz an aggressive marketing campaign has resulted in significant sales increases in other parts of Asia and in the U.S., and in reten- tion of European sales even though that market was also disadvantaged by an 8% tariff over Canadian competitors. Other Asian countries include Hong Kong, Korea, Vietnam, Singapore, Taiwan and Malaysia. "While we are able to make up a lot of that sales volume in different markets, it was challenging," Adams said. "We're shipping to quite a few destinations now," he said. "And we had been. But about half of our sales to Asia had been going to mainland China, and the other half to all other Asian countries. So we grew sales into the other countries.'" Maine Coast ships lobster to 29 countries. In 2017, it sold 7.3 million pounds of lobster. In 2018, aggressively marketing in new areas to adjust to the tariff, Maine Coast sales fell slightly, to almost 7 million pounds, Adams said. "There's a finite number of lobsters caught, and every year they're sold somewhere. So this is a reallocation of who's shipping where," Adams said. A strong market Maine Coast began shipping to mainland China in 2013 and increased sales every year since. In 2017, about 1.5 million pounds, comprising about 22% of his overall volume, went there. By early 2018, in the first six months before the tariff was imposed, "we were at some of our fastest growth for that year-over-year period," he said. "So we were expecting a banner year in China." When the tariff was announced, he said, "We quickly huddled and said, 'What do we do now? How do we remain profitable?' The quick answer was, we're going to have take our sales and marketing efforts and be very aggressive in markets where we're not disadvantaged due to tariffs. So we were able grow our sales dramatically in all of the other places we were selling." Maine Coast still does business in China. "We haven't foregone our Chinese customers," Adams said. "We're still in constant contact. They still want to work with us and we want to work with them. We're hopeful and positive that the tariff will lift at some point. It's a matter of when. And when they do, we want our Chinese customers to be thinking of us." Adams said he's optimistic about regaining market share, perhaps if the tariff is lifted, though there would be significant new challenges. "Infrastructure in Canada was quickly expanded to meet demand in China, and that infrastructure is not going away," he said. Still, he said, "We have heard from our Chinese customers that they want to do business with us. We have better logistics out of the U.S. We're more experienced than newer Canadian shippers at worldwide exporting of live, perishable lobsters. But it won't be without challenges and I'm sure a percentage of what used to be our sales will remain in Canada." B R I E F P H O T O / C O U R T E S Y O F M A I N E C O A S T Tom Adams, the founder, owner and CEO of Maine Coast in York. 866.782.0200 | www.connectivitypoint.com Call cabling vendor Call securi vendor Call AV vendor Call phone system vendor Call sound masking vendor 6. Call cell amplificaon vendor Call Connecvi Point!

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