reLAKSation 174.
Them
and us: Prior to Christmas, Intrafish posed a
number of questions about the safeguard case to the British Department of Trade
and Industry. Surprisingly, they actually responded and not surprisingly, their
replies merit further comment.
When
asked why they appear to be supporting a minority (15-20%) of Scottish
producers, they replied that they were responding to the concerns of all
independently owned Scottish producers. Despite the misleading wording, we
wonder whether this means that they believe the British owned Scottish farms are
a separate industry to that which is under foreign ownership, both within and
outside the EU? This is important because if the independent sector is
considered to be a separate industry, then it could be argued that meets WTO
conditions for pursuing trade actions, whereas if all production is taken into
account it might not. For example, IntraFish report that EU inspectors are due
soon in Norway to begin their investigation into an alleged dumping complaint.
Yet under article 5 of the anti-dumping agreement any investigation shall not be
initiated unless it is supported by more than 50% of the domestic industry.
However, in cases where there is some opposition to the investigation, then no
investigation should be initiated when domestic supporters of the application
account for less than 25% of the total production.
Clearly,
the 15-20% of the industry which support safeguards and the anti-dumping
investigation are insufficient in number to initiate an investigation so the
current investigation is therefore invalid.
It
is therefore important to establish whether the British Government perceive the
independent producers to be a separate industry or not. We, at Callander
McDowell would argue that both are the same with no distinction between the two.
We can say this because at least two members of the EUSPG, who are responsible
for initiating the application are also board members of Scottish Quality
Salmon. Another two farms who support the application also have representatives
on the SQS management board and as SQS represent at least two of the largest
foreign owned farming companies in Scotland, it can be concluded that both local
and foreign owned companies make up the Scottish domestic industry. With less
than 20% support the EUSPG should abandon its claims so that this safeguard
application and the associated anti-dumping action can be put where they deserve
to be – the wastepaper bin.
The
British Governments also replied to four other questions, on which we may
comment in later issues of reLAKSation, however there is one response which
merits a response now. When asked why the British Government would not give
favourable conditions to the minority of producers in Scotland so allowing them
to reduce their costs, they replied that the current rules do not allow the
government to discriminate in favour of Scottish owned producers. However, we
would suggest that they don’t have to discriminate at all but instead they
should relax the regulations for all salmon farms in Scotland. This would create
a positive environment for growth and would safeguard jobs and local economies
across the whole Scottish industry. Foreign owned companies may be foreign owned
but this does mean that they do not have any less commitment to the Scottish
industry than any Scottish owned company. Surely, it is time to finally let go
off this them and us attitude and let the industry get on with supplying the
consumer with what they want. Good quality, value for money, healthy food.
Hollow
threat: According to Seafoodintelligence.com,
Scottish salmon producers have been warned that they must now have independent
inspection and approval if they want to promote and label their salmon as being
Scottish. This is because salmon farmed in Scotland now has Protected Geographic
Indication (PGI) status, a designation awarded by the European Commission to
protect the integrity and reputation of agricultural products and foodstuffs
that have an identified geographic origin. Seemingly Scottish farmed salmon must
therefore comply with a set of standards and procedures if it to carry the
Scottish name.
Martin
Gill, Executive Director of Food Certification Scotland, the nominated
inspection body said that PGI status is designed to protect and enhance the
market position of Scottish farmed salmon, but to label farmed salmon as being
Scottish in origin, producers now need to have the appropriate approval,
otherwise they will fall foul of trading standards regulations. However, we, at
Callander McDowell, would disagree. Any such assertion is total nonsense. Mr
Gill seems to suggest that any salmon producer legitimately farming salmon in
Scotland cannot label their fish as ‘Farmed in Scotland’ unless they have
been approved by his organisation. Clearly any farmer, farming his fish in
Scotland, who does not label his fish as ‘Farmed in Scotland’, would also be
breaking trading standards law by labelling the fish incorrectly. Surely, salmon
farmed in Scotland are Scottish salmon.
We
argued in a previous reLAKSation that the award of PGI status would do little to
help the Scottish industry. The suggestion that farmers must register whether
they want to or not is just confirmation that this is the case. If PGI has any
value for the industry, farmers would be queuing up to participate, not having
to be coerced into doing so.
According
to the original press release issued by SQS following the award of PGI, it seems
that the original intention behind the application for PGI status was to protect
the good name of Scottish salmon and prevent salmon from other countries being
labelled and passed off at consumer level as Scottish Farmed Salmon. However,
the past changes to the labelling legislation ensure that this cannot happen
anyway. It is unclear why Food Certification Scotland would think that
preventing Scottish producers labelling their fish as Scottish would benefit
consumers. It will be interesting see what would happen to any unregistered
Scottish farmers labelling their salmon as farmed in Scotland, should FCS ever
decide to pursue non-compliance through the legal system. We, at Callander
McDowell certainly believe that there are many more important issues for the
industry to address than trying to force farmers to apply for pointless
approvals. It is no wonder that the Scottish salmon industry has had to resort
to seeking the protection of safeguards. It is too busy trying to impose its
vision of Scottish salmon on its own producers rather than responding to what
consumers actually want.
Speak
up: Former Norwegian Secretary of State,
Terje Osmundsen told delegates at a recent conference in Tromso that the
Norwegian industry lacks both direction and leadership. Fish Farming Today
reports that Mr Osmundsen had been asked to provide an ‘outsiders’ account
of the Norwegian fish farming industry. In addition to the lack of leadership
and direction, he said that the industry was over-organised and has an
increasing problem with credibility. He cited examples of attacks by
environmental groups and criticism from Danish chefs about poor quality in which
it was clear that the industry did not understand the problem. Instead, Mr
Osmundsen said that the Norwegian industry claims that it is everyone who has
misunderstood the situation.
However,
the latest comments from industry leaders about the safeguard issue would
indicate that Mr Osmundsens views have some credence. In an interview with
IntraFish, Lisbeth Berg-Hansen, chairperson of FHL Aquaculture, said that she
was amazed that the UK Government had claimed that Norway had not shown any
enthusiasm for compromise in the safeguard case. She maintains that the
Norwegian authorities have been willing to the extreme to compromise in talks
with the European Commission. However, as Mr Osmundsen suggests, Ms Berg-Hansen
should not be amazed since what appears to be commonsense to the wider business
world does not apply to this salmon safeguard case. If it did, then the
international salmon industry would not be repeatedly subjected to these trade
actions. Ms Berg-Hansen should know by now that nothing to with these actions is
straight forward.
Ms
Berg-Hansen is not the only one to be staggered by the British Government’s
reply. Botholf Stolt-Neilsen, spokesman for Salmon of Europe said that he just
cannot understand that the UK authorities were not aware of the multinational
companies’ view of the safeguard case. The British Government had said that
the multinational companies had made their views know to them but that whilst
these companies could not support the application, they had not actively
objected to it either. Mr Stolt-Neilsen may disagree but as Mr Osmundsen
suggests there seems to be failure to understand the root of the problem.
Angus
Morgan and his colleagues in the EUSPG created the organisation specifically to
give credibility to their claims. The organisation may not have a registered
office or even a telephone number but they have managed to persuade the Scottish
Executive that they are a bona fide organisation. By comparison, the
multinationals have remained unorganised. They may have made representations to
the Scottish Executive individually, but they did not put their combined weight
behind their views. We are aware that this deficiency had been pointed out to at
least one captain of the Norwegian industry together with a suggestion that a
Scottish Salmon Producers Group be formed to make more formal representations to
the authorities. Unfortunately, this idea fell on deaf ears and no action was
taken which is perhaps why the British Government failed to take notice.
The
Norwegian authorities may be directing all their effort towards persuading the
European Commission to compromise, but the EU are simply reacting to a request
from one of the member states. The real discussion should have taken place in
Edinburgh, not Brussels. In much the same way, NSL should have invited Angus
Morgan to speak at Laksedagene 2005, not Fritz Harald Wenig for it is Mr Morgan
who is really pulling the strings on this case. The opportunity to hear what Mr
Morgan has to say may help the Norwegian establishment better understand this
case.