Walmart Sustainability

The cost of certification the direct cost of msc

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Unformatted text preview: long term. “It's definitely brought us closer. I think there's a lot more trust now in our relationship,” he said. “They're willing to let us talk on their behalf, defend their points, and explain to the businesses we work with how important this effort is. And, because we have the muscle of their business behind us, we can go to a plant or a fishery and persuade them to become certified.” Additionally, because Walmart was interested in acquiring as much certified fish as possible, suppliers were able to begin taking a longer-term perspective toward their business with the company. The Cost of Certification The direct cost of MSC certification was paid for by boat operators and processing plants. Getting through the rigorous certification process could cost between $50,000 and $500,000 and take one to two years to complete. There were other indirect costs associated with certification; for example, fisheries with the most depleted fish stocks were forced to reduce their catches while repopulation occurred. “It’s difficult to convince fishermen to accept the economic sacrifices they would need to make in the short run in order to be better off in the long run,” noted Burns. Despite these costs, as Burns pointed out, certified fisheries could expect to achieve certain operational benefits. “Sustainable fisheries tend to produce more fish for fewer inputs or less money than fisheries that are unsustainable. In depleted fisheries, fishermen have to work harder to catch the fish they gettheir catch per unit of effort is lower. So there is at least some potential to reduce the cost of production,” he said. Progress as of Late 2006 By the end of 2006, Walmart expected to have 30 to 40 percent of its total wild-caught fish certified under the MSC. And, in the spirit of everyday low prices, there was no price premium, partly because consumers were unwilling to pay extra for sustainably caught fish. At that time, according to Redmond, the company would consider beginning to promote certified fish to its customers. “Right now, we have n...
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This note was uploaded on 01/14/2014 for the course LGST 210 taught by Professor Sep during the Winter '10 term at UPenn.

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