Seafood businesses flounder amid spending cut

Homey Group of Shandong province, a listed food processing, aquaculture and ocean fishing company with more than 30 subsidiary companies, including 10 food processing plants, said it expects to see a reduction in its first quarter sales, according to China Investment Securities.

In December, the government launched a nationwide crackdown on graft and extravagance, which is now being blamed for what experts suggest is the biggest slowdown in the catering industry in a decade.

Revenues of high-end restaurants in Beijing, Shanghai and Chengdu were down at least 20 percent during this year's Spring Festival.

In the first quarter of the year, many top catering companies had to close branches or change their menus.

However, large chain restaurants have a different view on seafood sales.

Jingya Group, for instance, reported its seafood businesses have not been affected by the government policies yet and its seafood buying from suppliers in Shandong is little changed, according to Ma Yuming, a marketing executive at the company.