reLAKSation 185.
Easter
give away: This
Easter British supermarkets have again discounted whole fresh salmon providing
their customers with a value for money meal choice.
Asda
- £2.90/kg down from £4.38/kg
Morrisons
- £2.99/kg down from £3.99/kg
Sainsburys
- £3.29/kg down from £6.58/kg
Tesco
- £3.29/kg down from £6.59/kg
Waitrose
- £4.99/kg down from £6.99/kg
As
we mentioned in the last issue of reLAKSation, despite the imposition of
safeguards, Asda have slashed the price of their whole salmon down to £2.90/kg,
the lowest price ever offered by a British supermarket. Is this because the
Norwegian salmon industry is dumping large quantities of cheap salmon into the
UK market? Of course not. The price of salmon in British supermarkets has
nothing to do with dumping or over-production but has a lot to do with the price
war between supermarket groups. Asda claim to be Britain’s lowest priced
supermarket (see our website) and therefore it is not surprising that they have
cut the price of salmon to below that offered by Morrisons who have
traditionally sold the cheapest salmon in Britain.
We
also ask whether is it a coincidence that Sainsbury’s and Tesco have
discounted salmon to the same price? Is this because the Norwegians are selling
whole salmon at the same price? Of course not. The answer is that Sainsbury’s
have matched the price offered by Tesco’s in order to attract more customers.
Even Waitrose, who normally sell on quality, not price, has discounted their
whole salmon by £2/kg because even their discerning customers are reluctant to
miss out on the opportunity to buy low cost salmon.
The
massive discounts that occur at Easter and at Christmas are not, and have never
been, prompted by so called Norwegian dumping. They reflect the realities of the
wider food market. Salmon is no different to other foods. Asda’s advert also
highlights a similar promotion on beef.
Is
the availability of low priced beef a sign that other beef producers are dumping
cheap beef into the UK? The answer must be no. Instead, it is again a reflection
of what is happening in the wider food market.
Fritz-Harald
Wenig of DG Trade in Brussels has said that the Norwegian industry must make a
choice between safeguards and dumping, however the choice is not Norway’s to
make. If anyone is going to make a choice, it must be the independent Scottish
farmers who make up the EUSPG. They need to look to the marketplace and decide
whether they are ready to produce what the consumer actually wants.
Whilst
there is a definite movement towards a demand for organic locally produced food
of the highest quality, rightly or wrongly this still represents a minority of
British consumers. The majority still prefer value for money at a price they are
willing to pay. We have discussed previously that it is pointless producing the
best salmon in the world if consumers are not bothered whether it is or not and
are unwilling to dig deep into their pockets to pay for it. The salmon industry
can argue this as much as they like but it is only necessary to look at the
poultry industry to see a parallel example.
Last
week a study by Mintel showed that 34 per cent of adults interviewed said that
they preferred to buy free range chickens. Yet, a Compassion in World Farming
survey identified that only between 0.2 and 5% of all chickens on sale at Asda,
the Co-op, Morrisons, Sommerfield and Tesco are free range or organic compared
with 12% of M&S chickens and 37% of those at Waitrose. The higher figures
for M&S and Waitrose reflect their position at the premium end of the
market, where price is not always the most important factor used in the buying
decision. What the figures do show is the majority of consumers are quite happy
buying the cheaper standard chicken. The same applies to the salmon industry.
The
independent Scottish farmers have brought their dumping case to Brussels because
they claim that imported Norwegian salmon is making it difficult to operate
profitably. The truth is that consumers simply do not want to buy what these
Scottish farmers want to produce. Until the independent sector start to respond
to what is happening in the marketplace, the international salmon industry will
continue to be subjected to these damaging dumping cases.
28
thousand reasons: Seafoodintelligence.com
report that the European Salmon Producers Group have received £28,375 in the
last round of FIFG funding. This money is intended to pay for an ‘economic
study’ to help independent farmers plan future operations within the European
market. Seafoodintelligence.com called Angus Morgan of the EUSPG to find out
more details of the grant and the study but was met with a wall of silence.
Seemingly, the study is commercially sensitive and therefore cannot be
discussed.
We,
at Callander Mcdowell, are not surprised, since everything about the EUSPG,
including the address of their office, remains a mystery. This ‘recognised’
trade organisation, although ready to instigate major trade actions, otherwise
likes to keep a very low profile. Our experience would suggest that this is
because their case is extremely weak and would not stand up to public scrutiny.
Why, when the forthcoming aquaculture conference in Edinburgh is to discuss some
of the ways which the salmon industry might restructure to become more
competitive, there no discussion about the safeguard or dumping issues at all.
This would have been an ideal platform for Mr Morgan or one of his colleagues
from the EUSPG to state his case. Sadly, Mr Morgan is not on the programme. What
a missed opportunity to promote the case for the independent Scottish salmon
farmer?
Instead,
it seems that Mr Morgan will be pursuing the EUSPG’s ‘commercially
sensitive’ economic study. We may have missed the point, but we cannot see how
any economic study will help the independent Scottish farmer. The Scottish
Executive already conducted a study of their sector to show that they were
disadvantaged. This is why the British Government decided to apply for
safeguards. The Scottish Executive is also funding a study, currently long
overdue, to look at the comparative costs between Scottish and Norwegian
producers. The need for another economic study, especially one partly paid for
by public funds, seems rather unnecessary.
Instead,
the independent Scottish producers need to be investing in a study to look at
the opportunities that the market can offer. Unfortunately, this seems unlikely
to happen as any acceptance that they should invest in marketing would be a
tacit admission that it is the market, not imported salmon, which is responsible
for their current difficulties.
Give
peace a chance?: Quoting the words of a
famous song, Fritz-harald Wenig of the European Commision’s DG Trade said that
Norway and the Norwegian salmon industry aren’t interested in giving peace a
chance and we at Callander McDowell are not surprised. Mr Wenig is asking Norway
to choose between safeguards and dumping duty. As the Norwegian salmon industry
does not believe it is guilty of any practice that warrants either safeguard
measures or dumping duties, it would be crazy to accept either.
The
problem is that from the outset, DG Trade have believed Norway to be guilty.
They have never asked the question as to whether Norway may be innocent of the
Scottish charges but rather what punishment should they impose. Until, DG Trade
remove their blinkers to these continued accusations, there will never be peace.
After
more than a year of trying to force a punishment on Norway, is it not time to
review and rethink the whole salmon question? If Mr Wenig really wants peace and
to be left to resolve real trade issues, then perhaps it is time to be less
selective to who he listens to and be more open to alternative solutions.
Recently,
the President of the Chilean Salmon Farmers Association, Carlos Vial, told
IntraFish that it was the Scottish salmon farmers who must learn to adapt. These
trade actions have nothing to do with Norway but rather everything to do with
Scotland. The Scottish independent producers blame Norway for their failings
rather than accept their own shortcomings. Until they do, there will always be a
stalemate, a position which Mr Wenig seems ready to encourage.
We
have mentioned previously that one of the better known EUSPG members, Loch Duart
salmon, is promoted as being an example of the way ahead for the Scottish
industry. They have invested heavily in sustainable production, backed by the
RSPCA Freedom Food scheme, yet fillets of their salmon sell for only £8.62/kg
through a dedicated premium outlet. This price is comparative with most
supermarket salmon. Clearly, consumers are unwilling to pay a higher price for
the extra quality. Is this Norway’s fault or simply a reflection of the growth
in salmon demand? The independent Scottish farmers need to look again at the
marketplace and produce what the market wants. No amount of prevaricating about
peace can ignore this. If he really wants to help Scottish producers, then Mr
Wenig should encourage them to find their own solutions rather than continue
pursuing their drawn out vendetta against Norway. This is the only way to give
peace a real chance.