According
to IntraFish, the EU have proposed a quota of 186,000 tonnes for Norwegian
salmon, based on the average salmon imports from Norway over the last three
years plus five per cent. Any salmon sold over this quota will be subjected to a
duty rate of 17.8%. In addition, a quota for 20,000 tonnes of salmon from the
Faroes would be set as well as a 20,000 tonne quota for other non-EU salmon
imports, but not from Chile.
Phillipe
Barbe of importer Direct Ocean told IntraFish that these quotas are too low. He
said that the proposed quotas total 246,000 tonnes whereas EU consumption was
about 400,000 tonnes. However, these figures do not take into account possible
demand from the ten new member states, which should boost consumption to about
500,000 tonnes. If the EU production is added to the quotas, it can be seen that
there will be a significant shortfall in supply.
It
is interesting that these comments are made by an EU based importer because it
always seems to be assumed that the perceived problems of the salmon markets are
caused by Norwegian exporters forcing their fish into the EU market at low
prices, when clearly, there are a large number of importers who want to buy low
cost salmon because this is what the market wants. Clearly, if these importers
are unable to buy what they want from Norway, they will look to other markets
such as Chile. If the safeguard committee opt to implement these quotas and
large quantities of Chilean salmon start to flow into the European market in
response, is the EU going to also penalise Chile just because they have
responded to the demands of EU importers? Perhaps, it would be better to
penalise the European consumer instead just because they want to buy value for
money salmon even though a small minority of Scottish producers does not want
them to do so.
The increased import of Chilean salmon to Europe is just one possible outcome from setting these quotas. Certainly, the European consumer will not have a problem buying Chilean salmon as they already have shown a willingness to do so, even when the retail price has been higher than comparable salmon from Scotland. It is also likely that the European consumer will not be so choosy as to where the salmon has been processed.
One of the major criticisms of these quotas has been that reduced imports will have an adverse effect on the European processing industry with likely job losses as Norwegian salmon supply is restricted. The processing industry has expanded significantly in Europe because it has been uneconomic to process the fish near the point of production due to high tariffs for processed salmon. However, a 17.8% duty rate is much higher than any rate for processed fish and therefore these quotas could well encourage more processing in Norway replacing that currently taking place in Europe. Consumers already have little concern as to the origin of the salmon they buy so that they are unlikely to show any more concern as to where it was processed.
Finally and probably more importantly, at a time when consumers are being encouraged to eat more healthily, especially of lighter proteins like fish, it seems a wonderful idea to restrict supply and try to force up prices. The EU have recently approved a FIFG proposal to award the Scottish industry £1.5 million to highlight the health benefits of eating salmon. Rising prices are a certain way to deter consumption, irrespective of the health benefits. Surely, if we want to encourage salmon consumption then the fish must be affordable and widely available. It has been said that the omega 3 fatty acids found in salmon are brain food. Perhaps it is the European Commission that needs to be eating more!!!
Freedom to choose: We, at Callander McDowell, have always argued that rather than seek solutions in Brussels, the independent Scottish farmers should look to the marketplace and respond to what the consumer wants. We were therefore pleased to see that one of the farming companies supporting the safeguard application have taken action and have been accredited with the Freedom Foods welfare standard from the Royal Society for the Protection of Animals (RSPCA). Wester Ross Salmon said that they decided to pursue the Freedom Food label because of increased consumer interest in fish welfare standards and the high visibility of the RSPCA and the Freedom Foods scheme. They told IntraFish that that Freedom Foods is one of the most highly recognised labels in the UK.
We certainly applaud Wester Ross Salmon for this initiative following in the footsteps of Loch Duart Salmon, the only other salmon company to attain this standard, however we are not sure that this standard is what consumers actually want. In our experience, most consumers believe that such standards should be a matter of right rather than something for which they should pay extra. This is apparent from how the Freedom Foods label has penetrated into the marketplace. When it was first launched it did have a relatively high profile. For example, supermarket chain Tesco only stocked its butchers counter with Freedom Food meat but today, there is no sign of this label at all. Reference to the Freedom Foods website shows that the only Freedom Foods products now stocked in most supermarkets are free range eggs. One or two supermarkets also claim to stock selected dairy and poultry products but these are extremely difficult to find in store. In effect, the Freedom Food label has almost disappeared from the supermarket shelves. Consumers appear largely uninterested.
This is not surprising for as we have suggested that many consumers expect these standards as a matter of right. We would certainly congratulate Wester Ross Salmon if they are able to persuade consumers otherwise, but we are not convinced. Most consumers look for value for money and the presence or absence of such labels makes little difference to the buying decision. We have already seen this as witnessed by the disappearance of the TQM mark from supermarket shelves. However, it is not just UK consumers who look to value rather than environmental and welfare standards. An article in the May issue of the IntraFish newspaper describes how the German frozen seafood company Frosta AG reported a decline in sales of 7.6% when they introduced an MSC certified range of products. Consumers were simply unwilling to pay more for this label.
This appears to be yet another example of the differential between what the consumer wants and what the producer thinks the consumer wants. After-all, the consumer has the freedom to choose.