Salmon was first imported to Chile about a century ago. It wasn't until the mid-1980s that salmon farming in submerged cages was developed on a massive scale. Nowadays, Chile is the world's second-largest producer of salmon, right on the tail of Norway. Puerto Montt is the epicenter of the farming and exportation industry, where, in the late 2000s, billions of dollars in investment were pushing the farming operations further south into Patagonia as far as the Strait of Magellan and the industry was expected to double in size and growth by 2020, overtaking Norway. By 2006 salmon was Chile's third-largest export (behind copper and molybdenum) and the future looked endlessly bright. Then the bottom dropped out.
Coupled with the global recession, Chile's salmon industry was hit hard with a sudden outbreak of Infectious Salmon Anemia (ISA), first detected in 2007 at a Norwegian-owned farm, with disastrous consequences. Between 2005 and 2010, annual Atlantic salmon production dropped from 400,000 to 100,000 tonnes; 26,000 jobs in Puerto Montt and around were lost (along with US$5 billion) and many players in the salmon service industry went bankrupt. Chile found itself in complete salmon panic – an increase in crime in Puerto Montt and the doubling of suicide rates didn't help matters. But there had been signs. Veritable mountains of organic waste from extra food and salmon feces had led to substantial contamination and depletion of other types of fish; and sanitation issues and pen overcrowding were serious industry concerns for many years.
Environmentalists, including the environmental organization Oceana, and the late Doug Tompkins, founder of Parque Nacional Pumalín, expressed their concerns about the negative effects of the salmon industry directly to the Chilean government. Fundación Terram, which closely monitors the industry, has published reports over a range of topics from working conditions to environmental damage.
By 2012 salmon began making a comeback, mainly thanks to an insatiable emerging market in Brazil, which temporarily overtook the USA to become the world's second-largest global consumer of farmed Chilean salmon behind Japan in 2010. By 2014, salmon had fully rebounded, overtaking molybdenum to become Chile's second-largest export by value and topping US$4 billion in sales, mainly thanks to now realigned appetites in the United States, Japan and Brazil. But in 2016, red algae wiped out one-fifth of Chile's salmon production – environmentalists blamed it on waste emissions from fish farms.
Though the crisis is behind it, the concerns are not. The Servicio Nacional de Pesca y Acuicultura (Sernapesca), Chile's government aquaculture watchdog and compliance agency, has found that the Chilean salmon industry uses more antibiotics than any other country (an astonishing 557 tonnes in 2015 – some seven times higher than Norway and a record high on a per-fish basis). Among them are quinolones, a family of antibiotics that are not approved for use in aquaculture in the USA and elsewhere due to their negative effect on the human immune system. By 2017, as stated in a report by SalmonChile (www.salmonchile.cl), the industry's trade association, all Chilean farms working together claimed a 30% reduction in antibiotic use – but there are skeptics.
As an aside, it should be noted that all the quality salmon in Chile is exported, so if it's on menus in the country, it's probably one of two scenarios: it's downgraded (ie defective or not fit for export) or 'wild,' which really just means it has escaped from a farm (or was spawned from an escaped bloodline).