Abalone Ranch Winding Down Amid Market Slump and Losses

A pioneering abalone ranch on Western Australia's southern coast is winding down as export prices fall and losses rise. The business, which was once the biggest employer in Augusta, is succumbing to a slump in the global abalone market.

Rare Foods Australia (RFA) accumulated losses of more than $25 million as of June last year, according to financial documents. The company's 2024–25 financial report shows RFA sustained a yearly loss of $4,833,469, and that its net assets had halved from $9.6 million to $4.7 million.

The company's financial hardship is attributed to a drastic expansion of China's farmed abalone industry, which has flooded the market and driven down prices. The molluscs are considered a delicacy in a number of Asian countries.

RFA has adopted a wind-down strategy, including workforce restructuring and reductions in operating expenditure. The company has also delisted from the Australian Securities Exchange to "reduce the significant costs associated with ASX listing" and stopped seeding juvenile abalone into its artificial reefs in Augusta.

Brad Adams, the company's family founder and long-time managing director, left RFA and the wider seafood industry earlier this year. He said stiff competition from Chinese producers had effectively halved export prices for greenlip abalone.

"We were probably averaging around $55 to $60 a kilogram. Ranched abalone is now around $30, $35," Mr Adams said.

"Any business that loses half its margin that quickly has to respond and adapt pretty quickly. Sometimes you can't adapt, and you just have to look for other opportunities, and that's not the end of the world either."

Mr Adams also mentioned that the Chinese industry has reached a production of around 200,000 tonnes per year, resulting in a flooded market that has affected Australian abalone producers.

"It's probably halved production in the last two years," he said.

The challenging conditions have also halted plans for the industry to establish another foothold along WA's southern coast near Esperance. A proposal for an abalone ranch and broader aquaculture precinct began in 2017, but the project has sat on the shelf since.

ETNTAC chief executive Peter Bednall said it made sense to investigate the project's future potential, but the recent downturn meant further expansion was in question.

"The reality is the concept we explored needs an awful lot of capital," he said.

"We think that's really important for towns like this, that our young people have the opportunities to stay here and develop their expertise in a range of different areas."