Fishing Troubled Waters.

CHILEAN SALMON FILLETS HAVE FOUND A PLACE ON tables around the world during the past decade, but Mainstream Salmones, Latin America's hottest growth company, is hardly a household name. In this month's cover story, we learn how it got to the top: In part, critics charge, Mainstream produces high-performance sales and profits by cutting corners--not costs--on labor and production.

Underpaying workers and overusing antibiotics may offer a short-term competitive edge, but it's a potentially disastrous recipe in today's global market. Consumers in developed countries increasingly bypass products from companies that ignore workers' rights, damage the environment and, above all, use controversial ingredients--think gene-modified corn, steroids in beef and Britain's never-ending "mad cow" debacle.

The cynical would say these issues are simply a ruse for protectionism, but the result is the same. Once the consumer hot button has been pressed for whatever reason, the red alert is supremely difficult to turn off. Just ask Chilean grape producers who battled mightily over the past decade to regain buyer confidence after two little cyanide-laced grapes were found on a Philadelphia dock. Maybe the grapes were tampered with stateside, as Chile has argued convincingly, but the damage was done just the same.

Chilean salmon carries no brand name in supermarkets, so a buyer backlash against Mainstream's misguided strategy to save a few pesos would hit the entire industry. Mainstream and astute Chilean salmoneros have built salmon into a world-beating powerhouse very quickly; ignore the consumers, and you can kiss it goodbye.

Mike Zellner

[e-mail]