reLAKSation 141.
Glasgow
high or Glasgow low?: Very little news emerged from the recent
Aquaculture 2004 exhibition in Glasgow. Discussions continued as to whether the
Scottish salmon industry merits such an exhibition at all or whether it should
revert to it’s former incarnation as a farmers get together. Although the
exhibition took place shortly following the European Commission’s decision to
reject the imposition of safeguards, the overall mood was upbeat with much of
the industry looking positively towards the future. This positive feeling was
confirmed by Graeme Dear, the new Managing Director of the UK arm of Skretting
in his summing up at the end of yet another excellent business seminar hosted by
his company.
One
of the key messages to come out of this seminar is how the market for salmon
continues to grow and at a much faster rate than for some of the other main
proteins. Lucy Simpson of TNS explained that seafood consumption in general had
grown by 8%, whilst chilled salmon had grown by 10% and added value salmon by
over 11%. This clearly shows that demand for salmon is continuing to increase,
giving little credence to the argument that supply is of balance with demand.
The view that the industry should be cutting back production will only encourage
consumers to forgo salmon in favour of better value alternatives.
Allan
Miller of Marine Harvest described how new markets are opening up helped by the
growing internationalisation of the major retail groups. Certainly, we at
Callander McDowell believe that whilst some criticise the supermarkets for
putting increased pressure on prices, they should also be applauded for creating
much of this growing demand.
Our
own discussions during the exhibition would suggest that some farming companies
are beginning to realise the importance of the marketplace in the future of
their businesses and this is clearly a positive development for the industry
since as some companies start to lead the way, others will surely to follow.
What some companies now accept is that the problems encountered by the industry
must be solved by the industry, not by the bureaucrats in Brussels. Salmon
farming is a business and like any other business, salmon farming must adapt to
the marketplace.
We
can only hope that the industry’s new positive mood continues unabated.
Don't
bank on it: In a break with usual tradition Skretting extended an
invitation to Tavish Scott MSP to speak at their business seminar. Whilst Mr
Scott, a member for Shetland spoke about the many positive attributes that
salmon farming has brought to the Shetland Isles, he also bemoaned the fact that
much of the Shetland industry was hampered by the lack of financial assistance,
especially from the banking sector. However, we at Callander McDowell, are not
surprised by the bank’s reluctance to advance more cash to help the industry.
Before they can advance money they have to assess the risk and in the current
climate, they clearly adjudge the risk to be high. Given that over £7 million
of public funds have been lost by recent bankruptcies and that the industry has
warned of further bankruptcies to follow, it is not unexpected that the banks
are being rather prudent with their money. In many respects, the salmon industry
has only itself to blame.
Every
since prices first fell in 1989, some sections of the industry have predicted
nothing but gloom and doom. Rather than address the problems, the industry has
tended to go running to Brussels to seek a political solution. This does not
induce much confidence in the future of salmon farming. In much the same way,
those farmers seeking help from the banks are unlikely to receive a sympathetic
response if they go looking for assistance to help them overcome low prices,
increased competition and higher costs. However, if they approach the bank with
a well written and researched business plan detailing how their company is to
tackle the market opportunities, then they might find that the banks are much
more responsive.
The
Scottish industry has become its own worst enemy. Too often it has sought out
the negatives. When others hear this message repeated time and time again, is it
no wonder that they have little faith and are so unwilling to help.
Non-story:
The Daily Mail chose to deal another blow to the Scottish salmon industry
as many farmers gathered in Glasgow for Aquaculture 2004. They reported that
Birds Eye, part of the Unilever Group, had chosen to use wild Pacific salmon in
its products rather than farmed salmon from Scotland. The paper suggested that
this decision was made against a background of worries about toxic pollutants in
British farmed salmon. They said that the US study is understood to have played
a part in Birds Eye’s decision to use only wild Pacific salmon. An industry
insider said that the company has been looking to use Pacific salmon in some of
its products but no definite decision had been taken, but when the salmon crisis
broke in January the company decided to go with wild salmon, even though it is
more expensive than farmed. The paper said that Birds Eye refused to confirm the
decision was a direct consequence of the health scare.
This
story broke only days after the editor of one national newspaper was sacked for
printing fake pictures of so called torture. The Daily Mail should be ashamed of
itself for allowing equally dubious stories to be printed in its pages.
As
soon as the story was published we, at Callander McDowell, knew that it was a
non-story because as the founding member of the MSC, Unilever and its subsidiary
companies have always been committed to using MSC approved fish in its products
and in the case of salmon, this means wild Pacific salmon. Birds Eye are not a
great user of salmon as they currently only produce two salmon products in the
UK, although they are extending the range.
Sadly,
haven given a whole page over to this non-story, they did not print a rebuttal
from Birds Eye, which included a commitment to the MSC. Instead, they printed
the statement on their new website. Clearly, the Daily Mail prefers
sensationalism to the truth. Equally, they prefer to protect their industry
insider source rather than check the accuracy of the story. As usual, it is
consumer confidence that is damaged.