The hake (Merluccius capensis and M. paradoxus) directed offshore demersal trawl is the most economically important fishing sector in South Africa, generating 30,000 jobs and comprising more than 50% of fisheries value. The industry changed to long term rights (LTRA), allocated in 2006 for a 15 year period. This study investigates the structure of the industry half-way between allocations. Data obtained through government and industry consultation are used to generate a structural representation of this sector, its fleet, vertical integration and horizontal consolidation (e.g. catch-share agreements and product value-adding), and heterogeneity of business models. Vertical integration is an important characteristic of the industry. Nine business clusters were identified, of which three represent 75.7% of rights and 70% of vessels. The findings indicate consolidation is likely at a higher level than rightsholder numbers imply, due to horizontal clustering. This is consistent with an economically mature industry of scale. Retirement and industry led effort-restriction in relation to MSC certification, catch-cost efficiency and a shift to frozen product, led to a decline in vessel numbers, especially wetfish vessels. Industry׳s response to a broadening of rights access has been to maintain efficiency and profitability through economies of scope and scale by forming clusters, retiring old vessels and engaging in MSC certification to broaden or retain market access. The trend of consolidation since the 2006 LTRA and the record of consolidations and absorptions of smaller businesses suggest that consolidation is probable to continue at a slow but steady pace.
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