In August of 1986, George Paulsen of Fullerton proudly landed his biggest fish ever, an 80-pound yellowfin tuna. Concerned that the battle with the heavy fish might have strained his 600 yards of West German-made line, Paulsen headed for a tackle shop in Anaheim early this autumn to replace it. But he found the price had more than doubled in the past year, from $9 to $20.
Paulsen decided not to replace the line--only to have it snap on Nov. 8, when he hooked what appeared to be a 40-pound bluefin tuna. "I had thoughts about throwing my tackle off the boat. . . . My rod and reel almost saw the other side of tomorrow," the construction equipment operator recalled.
Paulsen and half a million other Southern California anglers face rising prices in their hobby this year and next, as the dollar's 33-month-long fall makes imports more expensive. The recently renewed tumble of the dollar has pushed up manufacturers' costs still further this autumn, making competition even fiercer in a $1.2-billion sport fishing tackle industry already suffering from years of stagnant sales, overcapacity and large price discounts.
"Everybody's profit margins are being squeezed substantially. Everybody's trying to maintain market share," said Ray R. Golden, executive vice president of Garden Grove-based Daiwa Corp., the U.S. subsidiary of Tokyo-based Daiwa Seiko Inc., probably the world's largest manufacturer of sport fishing tackle.
Adjusted for inflation, "this has been a no-growth industry for probably the last 10 or 15 years. . . . The pie is shrinking, and (manufacturers) are just out there beating each other over the head for pieces of a shrinking pie," said Thomas P. Conley, executive vice president of the Barrington, Ill.-based 500-member American Fishing Tackle Manufacturers Assn.
Even as costs begin to rise modestly after years of price wars among tackle makers, some anglers are already becoming do-it-yourselfers. "I just bought a mold for making my own plastic worms," said Rick W. Reda, a post office driving instructor and Fullerton resident who says he spends $300 a year on deep-sea and freshwater bass fishing equipment.
Lower wages in East Asia and the dollar's rise in the early 1980s prompted U.S. manufacturers to move production facilities to Japan, Korea and Taiwan, and buy rod and reel parts in those countries for assembly in their remaining U.S. plants. Importers such as Shimano American in Irvine and Daiwa Corp. grabbed much of the U.S. market as total imports at factory prices rose to $226.3 million in 1986 from $105.9 million in 1979.
East Asia now produces about 70% of the reels sold in the United States and 90% of the fishing rods, said Paul A. Mulready, vice president of sales and marketing at Mankato, Minn.-based Johnson Fishing, one of three companies still producing reels domestically. What is left of the U.S. sport fishing tackle industry, which had factory shipments worth $327.3 million in 1985, consists largely of such accessories as tackle boxes and fish-finding sonar, said John G. Zerves, a Bartlett, Ill.-based consultant. Retail prices are typically double factory prices, so factory shipments and imports totaling about $550 million mean store sales of $1.1 billion to $1.2 billion, he said.
Since February, 1985, the dollar has fallen 4% against the Korean won, 25% against the Taiwan dollar and 50% against the Japanese yen. Importers have raised prices to wholesalers by 5% to 30% but complain that this is not enough.
Importers cannot raise prices enough to cover their increased costs because fishing tackle factories are cheap and easy to build and have been erected in great numbers across East Asia, said George J. Loechl, advertising and sales promotion manager of Bensenville, Ill.-based Ryobi America, another major fishing tackle importer. "The tackle industry is characterized by vicious price competition, which to a large extent has been induced by a continuous, dramatic oversupply of product."
So much unsold inventory of rods overhangs the market that industry insiders joke that it is being stored in a mile-deep, mile-wide hole "somewhere in Kansas," Loechl added. Opening a rod or reel factory is so cheap that as fast as small companies go bankrupt, new ones take their place, he said.
New factories are beginning to open in Singapore, Malaysia, Hong Kong, China and Haiti. Older factories in Japan, Korea and Taiwan are kept open by wealthy, diversified multinational sporting goods companies--Shimano makes bicycles; Daiwa manufactures golf clubs--that can afford to wait for the tackle business to recover.
The dollar's renewed tumble since late October has come at the worst time of year for fishing tackle makers, who publish prices for wholesalers in August and log many of their orders in early autumn. Manufacturers will now have to fill many of those orders with imported goods that have become much more expensive in dollar terms than they had anticipated.