Yet,
if these businesses were entirely competitive with Norwegian farms as they
suggest, why has there not been a single year, when the Scottish industry has
not complained in the press about Norwegian dumping or unfair competition?
Imported salmon seems to have become a permanent scapegoat for the Scottish
inability to adapt to the needs of the marketplace. This is an issue, which we
at Callander McDowell, have repeatedly discussed., but sadly, which the EUSPG
refuses to face.
The
EUSPG also say that they have not received any support from the EU, which is why
they have been ‘on their knees’ and why there have been so many
bankruptcies. Yet, this assertion is not entirely true and is rather misleading.
Most of the reported Scottish bankruptcies have actually occurred in Shetland
and despite being supposedly on their knees, a number of these companies have
received significant financial support from local community sources. The
Shetland News web site reported that at least a quarter of a million pounds of
Shetland’s community funds disappeared with the collapse of John Goodlad’s
Cro Lax Salmon. Cro Lax were also part of SSG Seafoods which also went bust in
December last year losing another £7 million of public funds. Shetland News
also reported that a further £65,000 provided by the Shetland Aquaculture Trust
appears to have been lost in Cro Lax along with £1.1 million invested by the
Royal Bank of Scotland. Cro Lax’s assets were later acquired by a new company,
North Atlantic Sea Farms Ltd, which was also set up by Mr Goodlad. Clearly, Mr
Goodlad has not been deterred by his experience of bankruptcy? The way in which
Cro Lax and other farms were funded with community funds has resulted in so much
concern locally, that a petition with 1900 signatures (about 8% of the Shetland
population) has now been sent to the Scottish Parliament.
The
EUSPG are also wrong to say that the Scottish industry has received no support
from Europe. There have been many significant awards to the industry stretching
back many years, from the FIFG funds. The latest Scottish marketing programme
has been funded with a £1.5 million FIFG award. It therefore seems that it is
perfectly acceptable to the EUSPG for Scottish and also Irish companies to
receive financial support, but not those in Norway.
So
what does the EUSPG really hope to achieve with their latest submissions? Earlier
this year, Western Isles MP, Calum MacDonald, who was instrumental in
gaining Government support for the application for safeguards issued a press
statement in response to the European Commission’s decision to proceed with
the application. He said: “This is a vital first step in creating a level
playing-field in the salmon market to allow Scottish producers to compete on
even terms with imports from Norway and Chile.
We,
at Callander McDowell, wonder whether the EUSPG are trying to aspire to
something that does not and cannot exist? There isn’t a level playing field
between producers in the Scottish industry, so how can one be expected to exist
between the Scottish and Norwegian industries?
The
plain fact is that the salmon industry is made up from a range of diverse
farming interests. How can a farm producing 500 tonnes, compete on even terms
with one producing 30,000 tonnes? How can a site in northern Norway produce
salmon at the same rate and cost of production as one on the west coast of
Scotland? How can two farms compete on even terms when exchange rates are very
different?; when interest rates are very different?; when the cost of living is
very different?; when water temperatures are very different?; when production
techniques are very different?; when transport costs are very different?; when
local employment considerations are taken into account? There is no level
playing field and so every farm cannot be expected to compete on even terms.
However,
it is not even as simple as that. The EUSPG clearly do not want the Norwegians
to have any advantage when they grow their salmon, but they are keen to ensure
that their own industry does have a significant advantage when it comes to
selling them.
Coinciding
with the announcement of the intention to submit anti-dumping and anti-subsidy
suits against Norway, the Scottish industry issued a press release reported by
seafoodintelligence.com that exports of Scottish Label Rouge exports have
increased by 15% during the first half of 2004. Brian Simpson of Scottish
Quality Salmon says that the Label Rouge and the Scottish label has great
resonance with French consumers. He went on to say that adding the recently
acquired Protected Geographic Index status to this combination should help boost
Label Rouge sales further. Clearly, this shows that Scottish producers, despite
being on their knees, are able to overcome the presence of
cheap, allegedly dumped, Norwegian salmon in the heart of the European
marketplace.
Whilst
a 15% increase in sales of Label Rouge salmon seems impressive, it actually
relates to only an increase of 366 tonnes. Perhaps, if Mr Morgan and his
colleagues spent less time worrying about whet the Norwegians were doing and
more on developing this and other niche markets, the Scottish industry might
have less to complain about.
The
European Commission is surely now faced with a dilemma. Should it allow the
safeguard process to proceed or should they also progress these anti-dumping and
anti-subsidy complaints in parallel. Alternatively, they could just let market
forces prevail to the benefit of the consumer and wild fish stocks. Only one
thing is sure, and that is whilst the European Commission allows the industry to
continue on the merry-go-round of dumping complaints, all salmon producers will
be subjected to further market disruption and uncertainty. This is not the way
to ensure a long-term and viable future for salmon farmers in both Scotland and
Norway.