reLAKSation 189.
The
case of the missing tonnes:
The unfolding story, worthy of inclusion in a detective novel, has Angus
Morgan issuing a statement in which he claims that ‘production in Scotland is
reducing substantially, down by around 60,000 tonnes (35%) in the last two
years.’ This figure, as reported by seafoodintelligence.com is supposed to
show that the Scottish industry has been severely damaged by Norwegian imports.
As we showed in the last issue of reLAKSation, such claims are complete
nonsense. Whichever way we look at the figures, either the EUSPG’s figures or
those from the Fisheries Research Service as supplied to the Scottish Executive,
Mr Morgan’s claims do not add up. If we base the calculation on the figure
used by Mr Morgan in his dumping submission dated September 2004, then Scottish
production in 2003 stood at 162,000 tonnes. Losing 60,000 tonnes means that 2005
production will be around 100,000 tonnes. We will be extremely surprised if this
figure proves to be anywhere near the true production. Unfortunately, it won’t
be until around October 2006 when
the FRS publish their data before we find out. By then,
the real damage to the international salmon industry will have already
been done.
However,
whether we can trust the official data is now open to question. As we have
previously discussed, the official FRS data for 2003 has not yet been published
as it has not yet been validated. We, at Callander McDowell can only assume that
the delay in publication has been because the data does not support the claims
made by the EUSPG. We would not be too surprised if the official 2003 Scottish
production figure is tot too different from the 162,000 tonnes, which Mr Morgan
claims. Following last week’s discussion of the production data, our faith in
the official data has been severely dented. This is because we were sent a copy
of what appears to be the official FRS annual fish farm survey for 2003. This
was apparently downloaded from the FRS website last year before it was hastily
removed. The document looks completely authentic and we have no reason to doubt
it is not authentic. In 2002, using data supplied by every Scottish farm, FRS
predicted that Scottish production for 2003 would reach 176,596 tonnes. The 2003
document puts the actual figure at 173,373 tonnes, an increase of 28, 784 tonnes
or 20%. This figure, published in June 2004, clearly did not support the claims
made in the safeguard application submitted to Brussels in January 2004 which
claimed that Scottish production would be 138,000 tonnes, so it seems that the
2003 survey was quickly removed.
The
2003 FRS survey predicts that Scottish production for 2004 will fall to 162,289
tonnes and we expect that there will be a fall, but not of the magnitude that
the EUSPG claim. The fall is in part due to bankruptcies, but also because some
farms have cut back production to convert to less intense organic production,
whilst others have given up salmon farming in favour of cod.
It
is worth pointing out that Mr Morgan’s calculations are suspect. He claims
that the 60,000 tonnes decline in production equates to 35%. If this is
recalculated back to 100% then the base line figure he uses works out to be
171,340 tonnes, not too far from the official FRS figure.
A grave injustice: The imposition of anti-dumping tariffs is a grave injustice, simply because this case, as well as all the previous ones, is not and has never been about dumping. The real issue is about market image. This can be seen by remarks made by Mr Morgan in his statement following the announcement of tariffs. IntraFish report that he said that the ‘industry will now be in a position to supply consumers in the UK and in Europe with what they most prize – Irish and Scottish salmon.’ This too is nonsense. Our observations of the marketplace clearly show that the majority of consumers not only do not prize Scottish or Irish salmon but are not in the slightest bit interested in the origin of the salmon they buy. Instead, they are much more interested in value for money. After fifteen years, when are Mr Morgan and his colleagues at the EUSPG going to accept that most consumers do not want to buy superior salmon for everyday meal consumption. More importantly, they do not want to pay a higher price to buy it. Norwegian salmon has flowed into the EU marketplace because more consumers want to eat it and EU producers cannot supply it. This would not be a problem but as consumers are unable to differentiate between so called cheap imports and supposedly superior home produced fish, their willingness to pay a premium price for Scottish fish has diminished. This is why Mr Morgan and the EUSPG have repeatedly sought trade issues. They believe that if the flow of imports is restricted, then their fish will regain their perceived market image. When will Mr Morgan realise this will never happen. We have previously pointed out that even specialist outlets can no longer charge what they want for salmon, because consumers will simply not pay. We have been sent a price list from Loch Fyne restaurants which show the retail price of salmon from Loch Duart, one of the complainant companies. This price is lower than a lot of supermarket salmon.
It
now seems that simply because Mr Morgan and his colleagues are unable to sell
their salmon at a price they want consumers to pay, the whole of the European
market must suffer. However, what is clear is that these new duties will not
boost the price of salmon in Scotland. Local processing companies will be
unwilling to pay more and farms could be left with unsold salmon as buyers look
elsewhere. These duties resolve nothing and the issue will yet run and run.
Apologies:
We must apologise for yet again having focused on the ongoing trade issue. We
would prefer to concentrate on marketing aquaculture products but the imposition
of trade sanctions forces marketing on the back burner as the EUSPG pursue their
production-led strategy.
Ever since salmon prices first collapsed in 1989 and we, at Callander McDowell, promoted the development of market-led strategies as the only way of regaining lost margin, we have repeatedly been unable to obtain a response as to why trade measures can offer the same benefits. We have said many times that our argument is wrong, we would readily hold up our hands; admit our mistake and make the necessary apologies. We do so now.
Angus
Morgan has contacted Callander McDowell to point out that the last issue of
reLAKSation contained errors. He writes
“In your
latest "report" you state that "the
organisers of the Aquaculture Today conference, persuaded Angus Morgan, General
Secretary of the European Salmon Producers Group to speak about their demands
for safeguards and the antidumping case. However, at the last minute, Mr Morgan
withdrew claiming that he had to be elsewhere."
This
is entirely untrue. I was never invited to participate in the Conference and
indeed was never contacted by the organisers. On my own initiative, I spoke with
Mr Dickson on Thursday morning and asked whether he could fit me into the
programme. Unfortunately he was unable to do so. Later in the day around 12.30
he phoned back to say that he was now able to do so. By that time it was
impossible for me to get to the conference, and so I had to decline but I sent
him the presentation I had prepared that morning, which he very kindly
presented.”
We
admit that we got it wrong. However, we do wonder why Mr Morgan, as secretary of
an officially recognised trade organisation was not at the conference.
After-all, this premier event would have been an ideal opportunity to be seen as
part of the Scottish industry. His counterparts at Scottish Quality Salmon, the
Shetland Salmon Farmers Association and the Scottish Salmon Producers
Organisation were all in attendance so why was Mr Morgan not there? Perhaps, as
the Scottish members of the EUSPG consider themselves as being separate from the
majority of the Scottish industry, they did not consider that this Scottish
conference reflected their industry. We suspect that a more likely explanation
was that the EUSPG prefer to keep a low profile so that they do not get asked
questions that they are unable to answer!