Transition Studies Review (2006) 13 (3): 589–604 DOI 10.1007/s11300-006-0128-6

Transition Studies Review Ó Springer-Verlag 2006 Printed in Austria

A Market Overview of the Fishing Sector in Croatia A. L. Lokar1 and M. C. Mason2 1

Department of Economics, University of Udine, Udine, Italy (E-mail: [email protected]) 2 Department of Biology and Agro-Industry Economics, University of Udine, Udine, Italy (E-mail: [email protected])

Abstract. This paper provides an overview of the Croatian fishing sector. The study describes aspects of Croatian fisheries and fish farming, including the structure of the demand, trade, fish processing, and market competitiveness. The analysis of the sector points to an increasing capture trend, especially for bluefish, a stagnation in freshwater fish production, and a growth of market share. The Republic of Croatia has continued to increase penetration in European markets particularly for high-value products such as seawater products. The paper concludes with a business overview analysing the performances of Croatian fishing firms. The analysis of market competitiveness confirms that a net widening between production and productivity trends exists. Keywords: fishing sector; sectoral analysis; Republic of Croatia.

Fishing and aquaculture is an important part of the Croatian economy. The country is characterized by a coastline of 5835 km, 30% of which represents the line dividing the continent from the sea and 70% is the coastline of numerous islands alongside the Adriatic littoral. The continental border of Croatia is only approximately 40% of the total coastline and its surface is also crossed by some important rivers, like the Danube, the second river by length in the European continent, the Sava, Drava, Kupa, Mura, and others. This natural situation offers Croatia an important vocation for water tourism, from the point of view of leisure and nutrition. Hence, fishing and aquaculture, both in sea- and freshwater may be important elements of the offer. The aim of this paper to acquire the economic determinants relative to the fishing sector in Croatia.

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Characteristics, structure, and resources of the sector In order to get a better evaluation of the economic considerations referring to Croatia, we bring some general data for the country: total gross domestic product (GDP) for 2004 was estimated at USD 50.33 billion1 expressed in purchase power parity, corresponding to a per capita GDP of USD 11,200. Subdividing this cumulative product in the various productive sectors, it is estimated that 8.2% of it comes from agriculture forestry and fishing, 30.1% from industry, and 61.7% from services. The remarkable weight of this last activity is probably due to the fact that tourism is important, particularly the tourism oriented to foreign guests, staying in the Croatian coastal resorts. Table 1 illustrates the importance of tourism to the national economy, where some countries and/or groups of countries are ranked on the basis of the importance in the tourist and travel industry and economy. As we can see, Croatia is ranked third in the group of these countries, if considering the share of tourism economy on total economy, and second if considering the percentage of total employment. Fishing activity is important, as part of it is contributing positively to the country’s tourism offer. Foreign tourists passing periods of leisure time in a country which has a long sea coast, appreciate particularly fresh fish in the menus of restaurants and guest-houses. Some quantitative aspects in Croatian fishing are shown in Fig. 1. Total sea fishing has grown considerably in the period of 1994–2003, showing that there must be a growing demand for this kind of product. It

Table 1. Importance of tourism industry and economy Country or region

Cyprus Estonia Croatia Spain Austria Bulgaria Montenegro Albania Czech Republic Slovenia EU Italy World Central and Eastern Europe

% of total GDP Industry

Economy

Economy jobs (% of total employment)

10.4 4.9 9.0 7.3 6.1 4.6 8.5 4.7 2.5 2.9 4.2 4.9 3.8 2.2

22.7 20.3 19.6 18.9 16.7 15.6 14.8 14.1 13.8 12.4 11.5 11.4 10.6 9.6

28.9 17.7 22.9 20.3 18.6 13.3 15.8 11.4 12.9 14.4 12.1 12.2 8.3 8.3

Source: World Travel and Tourism Council 2005 4

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Rank by economy GDP 1 2 3 4 5 6 7 8 9 10 11 12 13 14

Lokar and Mason 35,000 30,000 25,000

591

Total Total of bluefish Sardines (bluefish) Other species of bluefish Crustaceans Oysters and molluscs

t

20,000 15,000 10,000 5,000 0 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Years Fig. 1. Seawater fishing production in the Republic of Croatia (our elaboration on Croatian Central Bureau of Statistics data)

means also that there must be enough natural resources available in order to foster the demand and enough production factors in order to do it. On the other hand, the item which is growing more in the period considered, is bluefish, in particular, sardines, which are the most usual catch in the Adriatic Sea, whereas the trend of the other items is constant or falling. But sea fishing is only one aspect of the Croatian fishing production, for which two basic trends are shown in Fig. 2: a growing trend of seawater fish production and a stagnating trend of freshwater fish production; seawater fish production was growing approximately by an average of 1500 tons a year in the period from 1994 to 2003, but freshwater fish production is falling by 35,000 30,000

Seawater fish Freshwater fish Linear (Seawater fish) Linear (Freshwater fish)

y = 1481.9x + 13626 R2 = 0.8352

Ton

25,000 20,000 15,000 10,000

y = –124.95x + 4456.1 R2 = 0.2304

5,000 0 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Years Fig. 2. Total fishing production in the Republic of Croatia (our elaboration on Croatian Central Bureau of Statistics data) Regional Research and Reports

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125 tons a year, clearly showing the orientation of the demand. As we cannot

5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500

Oysters (heads; 000) Seabass & seabream smallsize (heads; 000) Seabass & seabream (ton) Mussels (ton) Tuna (ton)

6,000 5,000 4,000 3,000 2,000

Heads (000)

Ton

hypothesize that freshwater fishing is more difficult than seawater fishing, these trends must depend on consumer preferences, creating a much stronger demand for seawater fish in comparison with freshwater fish. Fish proteins are considered healthier than meat proteins and animal fats. But there is no substantial difference to this regard between sea- and freshwater fish, and because of this, there is no nutritional reason to prefer seawater fish to freshwater. The only remaining reason must be given by consumers’ taste (Nelson 1970). Generally, it is considered that seawater fish has a better taste than freshwater fish, and this is probably the main reason for the trends shown in Fig. 2. From this point also Fig. 3 is interesting, as it shows data about fish farming in Croatia. The period here is quite short, so that we do not have at our disposal a demonstration of long-term trends, but for the five-year period of 1999–2003 we register a growing trend for small-size seabass and seabream, tuna fish, and mussels, and no positive trend for normal-size seabass and seabream and oysters. With the fish farming, there is no limit to the quantity of products. Therefore, in this case, the only element to take into account is demand. Hence, we must conclude that there is a growing demand for small-size seabass and seabream, mussels, and tuna fish and a constant demand for the other two commodity items. This may be due to the taste and/or other considerations influencing the demand of fish products (Anderson and Wilen 1986, Asche 1997, DeVoretz 1982, DeVoretz and Salvanes 1993, Lanari 2001, Wessells and Wilen 1994). Figure 4 shows the data of fish processing in Croatia in the five-year period of 1999–2003. Total fish processing is growing in Croatia, but not to a large extent. By the way, within the aggregate there are several differences to be considered:

1,000 0

0 1999

2000

2001 Years

2002

2003

Fig. 3. Fish farming in the Republic of Croatia (our elaboration on Croatian Central Bureau of Statistics data) 6

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20,000 18,000 16,000

Ton

14,000 12,000

Dried & salted fish

10,000

Frozen fish (fillets and other products)

8,000

Preserved fish

6,000

Other seafoods

4,000

Total

2,000 0 1999

2000

2001

2002

2003

Years

Fig. 4. Fish processing in the Republic of Croatia (our elaboration on Croatian Central Bureau of Statistics data)

preserved fish is diminishing in the period considered, showing that this kind of product has a falling appeal to the consumers, dried and salted fish is growing, but not so much: in the last years we see a zero growth trend. The two categories which are growing more decidedly are frozen fish and other more sophisticated fish products such as fish salads, marinated fish products, and the like. We guess that the phenomenon observed shows the substitution of older kinds of processed products for more modern ones, better fitted to modern diet, taste, cooking, and consumption patterns.

Sector opportunities and constraints We can observe another interesting phenomenon of the Croatian fish market, if we consider the average price of the fish products exported and imported from and to Croatia. These data are shown in Figs. 5 and 6. We can see from Fig. 5 that the average price of fish products exported is growing in the period under investigation. In the six-year period of 1998–2003 it grew from approximately USD 2 in 1998 to USD 5 per kilogram in 2003. Most of the export is going to the markets of the European Union, which did not have a substantial inflation in this period, therefore we must conclude that Croatia is exporting more and more luxury products to the wealthy markets of Western Europe. In the import market, we can observe an opposite trend: price was around USD 2 in 1998, but it fell to almost USD 1 per kilogram in 2001, reaching more recently a level of approximately USD 1.5. The spread between average export and import price is, hence, USD 3.5 per kilogram, which means that Croatia is exporting higher quality fish products and importing lower quality items for domestic consumption, either for local citizens or for guests who come to the country for tourist reasons. Regional Research and Reports

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Average price in USD per kg Import Average price in USD per kg Export

5.00

US D p e r k g

y = 0.0598x 2 + 0.1778x + 1.7759 R 2 = 0.7657

Polynom. (Average price in USD per kg Export)

4.00

Polynom. (Average price in USD per kg Import)

3.00 y = 0.0973x 2 – 0.8617x + 3.14 R 2 = 0.9453

2.00

1.00

0.00 1998

1999

2000

2001

2002

2003

Years

Fig. 5. Average import and export prices of Croatian fish and seafood products (our elaboration on Croatian Central Bureau of Statistics data)

40,000,000

Balance of Trade in USD

30,000,000

Balance of Trade in kg

kg & USD

20,000,000 10,000,000 0 −10,000,000 −20,000,000 −30,000,000 −40,000,000 1998

1999

2000

2001

2002

2003

Years Fig. 6. Balance of trade (quantity and value) for the Croatian fishery sector (our elaboration on Croatian Central Bureau of Statistics data)

The situation is mirrored also in Fig. 6, where the balances are calculated between export and import in value and quantitative terms. The value balance reached a minimum in 2001 and peaked in the following two years, whereas the trend of the quantitative balance is falling all the time. From 1999 we can see a negative balance of trade in quantity: Croatia as a whole is importing more fish than it is exporting, but the fish exported has a much higher price than the fish imported, so that the export–import balance in value terms is positive. 8

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From these data we may conclude that the average consumer in Croatia is getting fish products of lesser and lesser value, including in this data also the tourists, whereas higher level products are exported. One partial consideration is that, seemingly, wealthier tourists who would request more expensive fish products are not part of Croatia vacationeers. They are staying in resorts abroad to which the Croatian higher value products have been exported. Table 2 shows the average prices of different fish products on the Croatian market in the period of 1998–2004. The items are sorted in descending rank by average price shown in local currency, but considering a relatively low inflation rate (3.2%2), we can suppose that the time series shows mostly demand and supply phenomena. It is interesting to show the following aspect: the first 10 products by average price exhibit only one item with negative trend, whereas the last 10 products have 3 items with negative trend. The average trend of the first 10 items is HRK 1.51 per year, while the average trend for the last 10 items is HRK 0.64

Table 2. Retail prices of selected fish species in Croatia Fish species

Retail price (HRK per kg) 1998

1999

2000

2001

2002

2003

2004

Avg Linear price rate of 98–04 in- or decrease

Lobster 117.3 120.0 104.0 132.0 218.0 220.0 175.0 155.2 Prawn I ctg. 80.1 74.1 87.6 103.0 111.4 109.8 118.0 97.7 Grooper 59.3 81.7 87.2 90.0 100.0 96.4 103.1 88.2 Prawn II ctg. 63.4 75.4 71.6 82.4 86.3 88.5 88.1 79.4 Dentex 46.7 101.3 74.0 70.2 74.8 76.3 75.7 74.2 Turbot 44.5 46.4 45.0 45.6 72.1 61.3 68.0 54.7 Seabass 55.6 67.4 56.0 24.0 50.7 44.8 52.5 50.2 Sole I ctg. 43.6 55.2 24.9 28.8 54.7 43.8 55.8 43.8 Squid 31.8 39.5 39.4 37.8 42.2 46.3 46.0 40.5 Clam 20.8 24.0 31.3 42.5 41.0 42.0 39.0 34.4 Sole II ctg. 34.9 50.0 19.1 22.7 34.5 31.0 31.6 32.0 Crab 25.5 20.0 24.0 35.0 35.0 36.7 39.0 30.7 Reef Mullet 22.4 25.3 23.9 28.1 27.4 25.0 22.5 24.9 Hake I ctg. 22.4 15.3 23.9 29.9 27.1 27.0 27.9 24.8 Octopus 24.3 23.3 21.1 22.0 21.5 23.6 26.5 23.2 Tuna 13.8 21.3 17.0 17.6 24.3 35.0 24.3 21.9 Cuttlefish I ctg. 17.1 21.9 21.3 22.2 21.2 19.4 20.7 20.6 Hake II ctg. 16.8 16.9 17.8 19.5 19.4 18.5 19.3 18.3 Grey Mullet 9.8 18.1 14.8 21.0 12.3 11.4 11.0 14.1 Mud Mullet 15.6 13.8 13.7 15.3 14.1 13.5 10.4 13.7 Hake III ctg. 10.5 10.0 13.1 12.8 12.6 12.6 13.2 12.1 Anchovy II ctg. 4.8 3.8 4.8 4.7 5.3 5.6 4.1 4.7 Sardine 2.5 2.5 3.0 3.4 3.2 3.2 3.8 3.1

4.2 1.5 0.9 0.5 2.2 4.4 0.8 –1.2 0.7 1.1 0.6 0.1 0.5 –0.3 0.1 5.3 0.1 0.2 –0.4 –0.1 0.9 0.0 0.1

Rank by mean price 98–04 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23

Source: Our elaboration on Croatian Central Bureau of Statistics data Regional Research and Reports

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per year, showing clearly that the prices of the products with higher price and value tend to grow, while the prices of the products with lower value tend to fall. Hence, the Croatian fish market seems to work differently from normal markets. The law of demand states that quantity demand moves in the opposite direction of price (all other things held constant), and its effect is observed in the downward slope of the demand curve (the demand curve has a negative inclination). Mathematically, one can say that quantity demand is a function of price, with other factors held constant, or Q = f (P, other factors held constant). In the fish market it may be the opposite: quantity sold may be sometimes growing with growing price. Economists call these goods ‘‘Veblen goods’’3 or ‘‘goods of ostentation’’. Fishing products, like some types of high-status goods, can be considered as luxury products because people’s preference for buying them increases as a direct function of its price (Darby and Karni 1973, McConnell and Strand 2000). From Table 3 we see how big the impact of fish diet on the total expenditure is for Croatian families: it is very small and not growing if we consider the period of 2000–2004. It thus becomes clear why the largest part of the Croatian fish products of higher quality and value are exported abroad. They do not find an adequate domestic market. As we can see in Fig. 7, fish consumption is growing especially for seawater fish. In general, as we have already seen before, the consumption of seawater fish is growing, and the freshwater fish consumption is low and stagnating. This impression is validated also by the elaboration shown in Fig. 8. The per capita consumption of seawater fish is growing with the income of the population (Fig. 8a). There is a small growth also for freshwater fish, but much smaller than that for seawater fish (Fig. 8b). By the data about the fish market environment of Croatia, we wanted also to see how, in such conditions, business activities based on the selling

Table 3. Domestic fish consumption in Croatia Characteristic of fish consumption

2000

2001

2002

2003 a

2004

Freshwater and seawater fish (kg per capita) Seafood (kg per capita) Dried and salted fish (kg per capita) Processed and preserved fish (kg per capita) Expenditure for sardines and clams (HRK per capita) Total expenditure (HRK per capita) Fish expenditure on total expenditure (%)

8.33 0.93 0.06 0.60 54.22 58,613 0.09

8.33 1.36 0.05 0.67 86.21 61,141 0.14

6.86 1.08 0.06 0.76 66.30 64,736 0.10

6.73 0.99 0.07 0.75 62.82

6.59 0.89 0.08 0.73 59.95

Source: Our elaboration on Croatian Central Bureau of Statistics data a Interpolated data 10

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30.00 Seawater Fish

25.00

y = 0.0184x3 – 0.2292x2 + 1.464x R2 = 0.9453

Freshwater Fish Polynom. (Seawater Fish)

kg

20.00

Polynom. (Freshwater Fish)

15.00 10.00 y = 0.0046x3 – 0.0775x2 + 0.4048x R2 = 0.5609

5.00 0.00

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

Years

Fig. 7. Fish consumption per capita in the Republic of Croatia (our elaboration on data from FAO and Croatian Central Bureau of Statistics)

Fig. 8. Relationship between income and seawater fish (a) and freshwater fish consumption (b) (our elaboration on data from FAO and Croatian Central Bureau of Statistics

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Lokar and Mason Table 4. Profit and loss account of a fishing firm in the Istrian region in 2003–2004 Item Revenue Sale proceeds Extraordinary revenues Financial revenue Cost Operating costs Extraordinary costs and value adjustments Financial costs Profit before taxes Loss before taxes Direct taxes Profit after taxes Loss after taxes

Mean %

93.84 4.85 1.31 92.71 2.95 2.96 4.58 3.19 0.61 3.96 3.19

Source: Our elaboration on Croatian Ministry of Agriculture, Forestry and Food data

of fish products would behave. Collecting large numbers of data referred to such activities already existing in Croatia, we were able synthesize Tables 4–6. Table 4 shows the composition of a profit and loss account of a fishing firm in the Istrian region with mean percentages for the two years of 2003 and 2004. Table 5 shows the total revenues, the number of companies, and the average number of employees in the fish sector in Croatia as a whole and in the Coastal-Mountainous and Istrian regions (zˇupanije). With these data we build Table 6, which is giving us a predictive profit and loss account (budget) for the fishing sector in the Istrian region of Croatia. Table 6, based on previous data describing the accounts of economic activities in the fish area in Croatia and in the Istrian and Coastal-Mountainous regions, shows that it is possible to carry out such activities in Croatia, and above all it is possible to gain a relatively conspicuous profit from them, even if we consider, at the beginning, only a market share of 20%. If the market share improved and the activities toward foreign countries expanded, the profit would improve even more. In Table 7 we can see the situation of fishing in the two Croatian regions considered here: Istria and the Mountain-Coast region. The year of reference is 2003. The indicated ratio of fishermen to vessels is 1 for both regions. Hence, we see that Croatian fishing is mostly a one-man-band activity, carried out on handicraft scale. The surprising data is the average yearly fishing catch per vessel which shows a large difference of 3.5 tons between the two areas. 12

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Value of 2004 relative to 2003 (%)

229

2,328,685

294,899

2,038,284

268,683

29

67,531,864

220

59,110,242

110

114

104

114

369,150

6,249,174

474

174,976,884 28

391,452

6,165,366

441

172,630,249

106

99

93

99

509,832

4,835,831

1,916

827,601,094

439,746

4,097,035

1,882

202

976,837,852

2004

2003

2004

2003

Value of 2004 relative to 2003 (%)

2003

2004

Republic of Croatia

Istrian region

Coastal-Mountainous region

Value for:

Source: Our elaboration on Croatian Ministry of Agriculture, Forestry and Food data

Total revenue (HRK) Mean nr. of firms (03–04) Avg nr. of employees Revenue per firm (HRK) Revenue per employee (HRK)

Characteristic

Table 5. Characteristics of the Croatian fishing sector

86

85

98

85

Value of 2004 relative to 2003 (%)

Lokar and Mason

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Lokar and Mason Table 6. Predictive profit and loss account of the fishing sector in the Istrian region in 2003–2004 Characteristic

Net revenues from sale of products in: Foreign market Domestic market Net revenues from sale of goods in: Foreign market Domestic market Revenue from subsides and grants Other sale proceeds Extraordinary revenues Proceeds received on sale of long-term assets and goods Cost of goods, material, and services Energy costs Costs of transportation services Maintenance and repair of investments costs Banking and payment service costs Insurance premium costs Other services costs Employer’s contribution Amortization and depreciation Net salary and emoluments Average wage contributions Wage contributions Outlay taxes Other operating costs Change in value of inventories of products and work in progress Increase Decrease Costs of goods sold Profit

% of sale proceeds

21.56 33.58 6.15 27.16 2.97 1.53 4.85 1.8 )19.01 )4.07 )1.52 )0.96 )0.58 )0.87 )13.47 )3.82 )6.03 )8.42 )3.03 )1.94 )0.32 )2.42 1.69 )3.57 )24.36 6.9 a

Source: Our elaboration on Croatian Ministry of Agriculture, Forestry and Food data a At total sale proceeds in the Istrian region of HRK 173,803,567 (average value for 2003–2004) and a supposed market share of the sector of 20%, profit would be HRK 2,398,489

The sea is the same for both regions, the Northern Adriatic sea with its gulfs, and an assumption that the fishermen of the Coastal-Mountain area are more technically skilled than the others is not plausible. Therefore, we suppose that the reason for these differences must be another one: it could be connected with official and black market data regarding fishing. Part of the product of the fishermen may be sold on the black market, which could be deduced also by the fact that the official production of the high-price products is stagnating. Fishermen probably sell as much as they can of these products on the black market, while only a part of it appears on the official one. Such a 14

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Table 7. Sea fishing activity in the Istrian and Mountainous-Coastal regions in 2003 Region

Catch (t)

Nr. of vessels

Nr. of fishermen

Ratio of fishermen/ vessels

Ratio of catch/vessels (t/vessel)

Istria Coastal-Mountain Region

5076 6458

920 715

950 739

1 1

5.5 9.0

Source: Our elaboration on Croatian Ministry of Agriculture, Forestry and Food data

Table 8. Average price determination of fish products in the Istrian and Mountainous-Coastal regions Characteristic

Catch fraction (%) Average retail price (HRK per kg) Price cut by 25% for wholesalers

Value for:

Total or pondered mean value

Bluefish

Other fish

Crustaceans

Molluscs

74.84 4

14.82 60

0.7 150

9.64 100

100 22.58

3

45

112.5

75

16.93

Source: Our elaboration on Croatian Ministry of Agriculture, Forestry and Food data

situation can be also observed directly at the arrival of the vessels in the ports: the best fish is often immediately sold to privates and restaurant representatives waiting on the pier without any bureaucratic formality, by immediate cash for product exchange The amount of the catch that is not sold in this way, enters probably into the distribution chain and appears in the statistics. This situation is more marked in Istria, where there is more tourism and are more restaurants and especially it is closer to the borders, favouring customers from abroad, improving the demand. With these data, we can also build up a business plan in order to have an idea of what kind of problems the Croatian fisherman must face in order to survive and have an economic perspective of continuous existence. In Fig. 1, we see the marine catch of the various kinds of fish in Croatia, while in Fig. 2 we see the prices obtained for the various kinds. From Fig. 1 and 2, we obtain Table 8, enabling us to determine the average price for the average catch of a Croatian fisherman. With the given structure of the fish catch, the average retail price is HRK 22.58 per kg. With the average retail price reduced by 25% in order to consider the fact that the producers in the official distribution process do not get final consumer prices Regional Research and Reports

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Lokar and Mason Table 9. Annual profit and loss fore cast account of a representative Croatian fishing firm Item

Value (EUR)

Revenue Wage Fuel Equipment Current maintenance Oil Depreciation Operating income

20942.18 6544.11 5000.00 3000.00 1500.00 80.00 4000.00 818.07

Source: Our elaboration on Croatian Ministry of Agriculture, Forestry and Food data

but prices paid by wholesalers, the average price comes out as HRK 16.93 per kg. The fisherman, as we know from Fig. 2, fishes 9.03 t of fish every year with a revenue of HRK 152,877.9, or, if we put the data in euros, of EUR 20,942.18 per year, at an exchange rate of HRK 7.3 per euro. This is the revenue of the average fisherman. In order to produce an income statement, we must consider the costs. In 2003 the monthly gross salary for a fisherman was HRK 3981 (net, HRK 2947; in 2001 and 2002 the average gross [net] salary was HRK 3303 [2485] and 3578 [2635], respectively [Statistical Yearbook, Croatia, 2004]), corresponding to HRK 47,772 per year, that means EUR 6544.11. With this data it is possible to delineate the budgetary income statement shown in Table 9. For the other costs we have done market research with some fishermen of the Croatian coast. On the basis of the data obtained, we considered EUR 60,000 for the depreciation of the vessel over a period of 15 years. The final result, as we can see from Table 9, is a profit amounting to EUR 818.07 per year, which relative to the revenue amounts to 3.9% on sales. In order to build this business plan, we made the following assumptions which did not seem to be in contrast with the other considerations expressed in the research work. We considered that the vessel is a new one, not of a very large size but large enough and still manageable by only one person. We hypothesized that the distribution process refers to a reduction of price obtained by fishermen, on average of 25%, considering also the fact that a part of the catch, especially the part of higher value, is sold by the fishermen on the black market without passing through a distribution chain. The main problem in preparing a business plan in the fishing area seems to 16

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be the fact that it is not easy to imagine an average model for the activity. From the interviews with fishermen, it emerged that there are different typologies of fish catching, carried out in different places, depending on different environmental factors. Therefore, the described business plan must be considered only as a preliminary approach, in order to understand the problem’s dimension. A deeper analysis should try to build diverse plans for different fishing typologies, getting the needed data through field research. Our business plan evidences a first aspect: the index of return on soles of approximately 4% and the low possibility of the fishermen to depreciate quickly the vessels.

Concluding remarks The Croatian market exhibits a trend of growing demand for seawater fish and a stagnating one for freshwater ones. Croatia exports high-value seawater fish and imports lower value fish either for domestic or tourist consumption. There are indications of a pretty strong grey or black market where a sizeable part of the best quality product is sold. The supply economy is fostered by very small businesses which appear as logical members of the investigated market frame. Their activities, as also those of intermediaries in the fish market, appear as economically sound but both could be improved by creating bigger and more modern production units. In particular, the intermediary activity could be greatly improved by modern and more transparent forms of intermediation which could offer a benefit to all the actors: fishermen, middlemen, consumers, and the public sector. The public sector could start a promotion campaign to foster the demand of freshwater fish, as, from a nutritional point of view, fresh and seawater products may be considered equal, and in general, fish proteins are healthier than animal ones and those of other origins. The same could be said for aquaculture products in comparison with sea-caught ones. Acknowledgment. This research is a common work of the authors. However, the second and fourth sections should be attributed to Michela-Cesarina Mason.

Notes 1 http://www.cia.gov/cia/publications/factbook/geos/hr.html 2 http://www.cia.gov/cia/publications/factbook/geos/hr.html 3 The Veblen effect is named after the economist Thorstein Veblen (1857–1929). In his popular study The Theory of the Leisure Class (1899) he coined the concepts ‘‘conspicuous consumption’’ and ‘‘status-seeking’’.

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