12.6.
Interest of consumers in the Community
(121)
As
the product concerned is a consumer product, the Commission informed various
consumer organisations of the opening of an investigation. No responses were
received from consumer organisations. Given the magnitude of the margins between
the whole fish ex-farm and the retail price of processed salmon products, it is
considered that the measures are unlikely to have a material effect on retail
prices and the impact on consumers is therefore considered to be minimal.
Salmon
farmers, whether they be from Scotland, Ireland, Norway, the Faeroes or Iceland,
produce salmon to sell to the end consumer. Without consumers, salmon farming
would be a totally pointless activity. The consumer is therefore of paramount
importance to salmon farming, but sadly, the Scottish complainants and the
European Commission have given scant regard to this most important part of the
supply chain. Unfortunately, the overriding reason that the EU Salmon Producers
Group have resorted to this application for safeguards is that they ascribe more
importance to their production-led strategies. They prefer to focus on issues
that they think are important rather than consider those which are important to
the consumer. This is why they have continued to suffer from poor profitability.
Simply, they have not produced what the consumer wants, and now, the whole of
the European industry is paying for their mistakes. This is not to say that they
are not the only farmers in Europe who are out of tune with the marketplace, but
they are the only ones to officially complain about it.
The
fact that consumers are of such fundamental importance to the salmon industry
makes it hard to comprehend that the European Commission did not pursue a reply
from the consumer organisations. However, the consumer organisations have such a
wide ranging remit that perhaps the Commission should have spent at least part
of this investigation looking for themselves at how important salmon has become
to the consumer. Instead, they have just assumed that the margin between farm
gate and retail store is so great that the added cost of the safeguard measures
would be minimal. This is not necessarily the case.
The
problem is, that over recent years, the market image of salmon has significantly
changed. It is no longer the treat for special occasions but instead salmon has
become a fish for everyday consumption. Not only is it an everyday meal choice,
but it has also overtaken cod as the most popular fish. The reason is simple.
Farming is able to supply salmon in predictable volumes, in predictable quality
and at a predictable price. As a result, salmon has dominated the fish counters
at a time when supplies of traditional white fish like cod are threatened from
over-fishing. Consumers have become accustomed to salmon as a value for money
species and demand has risen. Fortunately, the supermarkets have been able to
meet this demand with a choice of salmon products at an affordable price. This
demand has had to be met with increased levels of imports. These may overshadow
local production, however, without these imports, the European market would be
looking to import alternative lower cost species to replace the gap in demand
left by the shortage of cod.
The
minority of Scottish and Irish farmers who have complained to the European
Commission are not happy about these imports, even if they are what the consumer
wants, not only because prices are low, but also because they have undermined
the perceived market image of the salmon they produce. They claim their salmon
are of a significantly high quality that consumers are prepared to pay a premium
prices. This is fine. If they can obtain a premium for their fish, then all
credit to them, however, when consumers see that they can buy what seems to be
identical fish cheaper elsewhere, then it is their business approach which needs
to be addressed, not safeguards. If these companies are not producing what the
consumer wants, at a price the consumer is prepared to pay, then they cannot
blame imports. Instead, they need to look again at what the consumer wants and
adapt their production accordingly. However, this does not have to mean that
they must try to compete in the commodity market for raw salmon flesh, but
rather, that they should look at the specialist markets, which fit in with their
ideal perception.
The
market for salmon has changed. Consumer purchase of salmon has changed. Its
inevitable that the salmon industry must also change. Safeguards are simply just
another delaying tactic to avoid making the necessary change to an industry
which places most importance on what the consumer actually wants. Meanwhile, the
supermarkets have clearly responded to the imposition of safeguards by
continuing to satisfy consumer demand for value for money. Tesco are selling
whole fish at half price- £3.29/kg and Sainsburys have packs of fillets at half
price 380g for £2.99. Other supermarkets are also offering salmon on promotion.
Missing
the point 2!: The Salmon Farm Protest Group
are challenging top restaurants to reveal whether the salmon they serve is
farmed or wild. They told Scotland on Sunday that diners should demand to know
where the food on their plate comes from. They plan to name and shame
restaurants that keep their customers in the dark.
Bruce
Sandison, of the Salmon Farm Protest Group told IntraFish that their reason for
doing this is that customers should know whether they are eating wild or farmed
salmon so they can make a choice. However, it is only necessary to look at their
web site to know that they do not have the customer’s interests at heart, but
rather are more concerned about damaging the reputation of salmon farming, which
they blame for a decline in their sport fisheries.
Mr
Sandison said that menus typically just say ‘Scottish salmon’ or ‘Fresh
Scottish salmon’, but suggests that it would be better to say Scottish Farmed
Salmon instead. We, at Callander McDowell, do not think so. We understand Mr
Sandison’s motives, but most people go out to eat, especially at the top
restaurants, which he surveyed, because they are simply looking for an enjoyable
meal out. They are not that concerned about the origins of the food on the menu,
but hoping to experience good cooking, good wine, pleasant company along with
the right ambience. When they choose a restaurant, they place their implicit
trust in the restauranteur and the chef to meet all their expectations. This
includes ensuring that the food is of the right quality and cooked to
perfection. Once enhanced descriptions of the origins of all the food starts to
appear on the menu, it will become more of a geography lesson and will detract
from the dining experience. Diners are just not that interested. If they are,
they ask.
However,
it is not just the anti-farming lobby who would like to see more information on
restaurant menus. Brian Simpson of Scottish Quality Salmon agrees with Mr
Sandison and said that the industry would be proud to see restaurants listing
‘Scottish Farmed Salmon’ on their menus. Mr Simpson told IntraFish that more
and more restaurants are seeking to differentiate their foods by country of
origin labelling, although this is a bit different from using the word
‘farmed’ on the menu. The problem for Mr Simpson, is that such country of
origin labelling is not really of any interest to most consumers whether they
eat in or out. The Scottish industry continues trying to capitalise on their
long-standing perception that Scottish salmon is superior to any other despite
continued apathy from the consumer suggesting otherwise. The latest attempt to
try to stamp the Scottish label on consumer interest is the award of the EU’s
Protected Geographical Indication. Now only salmon farmed in Scotland can be
called Scottish Farmed Salmon. In the past, the industry claimed that imported
salmon was often passed off as being Scottish. The new labelling legislation has
meant that the country of origin must be properly displayed and this has shown
that consumers are equally happy to pick up a pack stating ‘Farmed in
Norway’ as they are one that is ‘Farmed in Scotland’. Origin is not an
important factor for most consumers buying salmon.
PGI
is not going to make any difference to the way consumers buy salmon. It is not
going to magically change the image of salmon farmed in Scotland, nor is it
going to persuade consumers to pay more for it. The move for PGI status is just
another example of focusing on production–led issues that are of little
concern to the consumers who will buy this fish. The industry continues to miss
the point of what is important and what is not. Until salmon farming can resolve
this question, it will continue to be a roller coaster ride.
Education,
Education, Education: IntraFish reports that
the European media avoided a salmon scare frenzy following the release of the
second half of the Hites study on contaminants in farmed salmon. Brian Simpson,
Chief Executive of Scottish Quality Salmon said that the main reason why was
because this time, we have an educated media. We, at Callander McDowell, are not
so sure. A good story will always find space, irrespective of whether it is
accurate or not.
In this case, the latest scare story is the second half of a study, which much of the media has already milked for all it was worth. Some hard line papers like the Daily Mail, which cannot resist any opportunity to scare its readers, did find space for this latest news. However, the salmon industry is fortunate, at least in the UK, that another food scare story dominated the headlines. Prompted by Denmark’s decision to ban all breakfast cereals fortified with vitamins, iron and calcium, the British news focused on a decision by Kellogg’s to launch a reduced sugar version of Frosties, the most popular children’s breakfast cereal following concerns that it can contain up to 41% sugar
This story simply smothered the one about salmon. This was not about education but rather about what was more news worthy.