Once the biggest employer in Augusta, ocean-ranched abalone producer Rare Foods Australia is winding down operations amid losses.
Chinese supply dominance has halved the price of abalone exports in recent years, prompting questions over the local industry's future.
WA abalone pioneer Brad Adams says regional fishing towns need to be able to adapt to changing global markets.
The world's first ocean-ranched abalone operation is winding down on Western Australia's southern coast as export prices fall and losses rise.
In 2019, the business was riding high on an export "gold rush" to Chinese consumers, making it the biggest employer in Augusta.
Locals were employed to dive and harvest abalone off artificial reefs in Flinders Bay, as well as process the molluscs at a nearby facility.
Now, Rare Foods Australia (RFA) is winding down the business, having accumulated losses of more than $25 million as of June last year, according to financial documents.
The company's financial hardship comes amid a slump in the global abalone market, driven by expanded supply from China's farmed abalone industry.
The company's 2024–25 financial report, lodged with the corporate regulator earlier this month, 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.
A wind-down strategy adopted in 2025 included workforce restructuring and reductions in operating expenditure.
By June, it had delisted from the Australian Securities Exchange to "reduce the significant costs associated with ASX listing".
The company also stopped seeding juvenile abalone into its artificial reefs in Augusta.
After founding the company, then known as Ocean Grown Abalone in 2011, long-time managing director Brad Adams left RFA and the wider seafood industry earlier this year.
Having followed his father's footsteps into the industry, 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 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."
An expansion over two decades has seen the Chinese industry reach production of around 200,000 tonnes per year.
The result has been a flooded Chinese market, once the biggest consumer of Australian abalone.
Mr Adams said other big players were also exiting Australia's aquaculture industry.
"It's probably halved production in the last two years," he said.
Last year, two Tasmanian farms closed, including an operation at Bicheno owned by Yumbah Aquaculture, Australia's largest producer.
The algal bloom along South Australia's coast also saw Yumbah close its farm on Kangaroo Island.
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, backed by the Esperance Tjaltjraak Native Title Aboriginal Corporation [ETNTAC], in collaboration with Rare Foods Australia and Yumbah.
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."