reLAKSation 217.
When
will they ever learn?: After nearly two years
of wrangling, first with the safeguard case and then with the current dumping
complaint, the European salmon industry can look forward to five years of the
MIP. This can be considered to be nothing more than a watered down version of
the previous EU salmon agreement. The salmon agreement certainly didn’t solve
the industries’ problems because if it had, then it would not have been
subjected to these current measures. Clearly, no-one has learnt from the
experiences of 1996.
Certainly,
the hardcore Scottish producers who form the quasi-EUSPG have learnt nothing
from their repeated attempts to protect their own industry from external
competition. They still must believe that the only way to persuade consumers
that Scottish salmon is special and something worth paying more for is to ensure
that they should be the only suppliers to large swathes of the European market.
They believe that it is easier to try excluding foreign competition from the
marketplace than having to invest in the type of marketing necessary to convince
consumers to dig deeper into their pockets. These blinkered Scottish minority
have also argued that their salmon is distinct from cheap foreign imports
because it is of a much higher quality and therefore deserving of a higher
price. They say that it is not the same product. Yet, when consumers actively
choose to buy the cheaper foreign imports, the Scots claim that foreign
producers are dumping salmon into Europe and disrupting their markets. When will
these EUSPG members learn that the supermarkets are simply reacting to what
consumers actually want and buying in cheaper foreign salmon to meet this
demand. If consumers wanted high priced, high quality Scottish salmon, then they
would buy it. The EUSPG need to learn that they cannot use the European
Commission to force consumers to buy their salmon.
However,
it is not just the Scots that need to learn from these dumping complaints. The
Norwegians also need to learn how to successfully defend the accusations of
dumping. Back in 1996, their response to the dumping complaint was to
cull 4 million smolts and unilaterally impose feed quotas. They then went to
Brussels and said ‘look how responsible we have been’. What they didn’t do
was fight the case. Although they claimed that they were innocent of the dumping
charges, they simply rolled over and accepted the punishment of the EU salmon
agreement. If they were not guilty of dumping, then why accept the agreement.
Now
in 2005, the Norwegian industry has again accepted the MIP, although this time
they have stated that they have not dumped salmon. Why accept this punishment if
they haven’t dumped salmon as the EUSPG maintain. One answer is that there is
concern that any attempt to challenge the complaint will lead to even more
Draconian measures, however if they are confident that they have not dumped
salmon, then they should stand up and fight. Reports in the press relate what
seems to be a half hearted attempt to argue their position. Kyst.no reports that
FHL Havbruk has coupled together the services of Kontali Analyse with lawyer
Trond Paulsen to repudiate the claims of dumping. However, they are not
confident that they will be heard. Trond Davidsen of FHL Havbruk said that
whether it will help is an open question as previous attempts have not worked
before. If it doesn’t, Trond Paulsen told IntraFish that the Norwegian
industry can rest assured that the period over which any punitive measures
operate can be reduced as long as salmon prices remain high. Obviously, his
advice would be more helpful if it were not that salmon prices are currently
hovering just above the 2.81 MIP.
IntraFish
also report that the Norwegian industry is showing signs of disagreement as to
the best strategy. According to an EU source, the Commission had hoped that the
Norwegians would accept a permanent MIP, regardless of the fact that they
maintain they have not dumped salmon. The European Commission already believe
that they have spent too much time on the case and want to bring the affair to
an end. They have already made it clear that it doesn’t matter about the
rights or the wrongs of the case as long as everyone is willing to accept a
compromise. Norway has yet to learn that the only compromise is free trade.
DG
Trade also need to learn. They now believe that they have spent too much time on
this case and they are right. What they don’t seem to learn is that the
Scottish problems are not due to dumping but rather their inability to respond
to what the market wants. Dumping is simply an excuse. DG Trade might argue that
their own investigations have shown that dumping has occurred but they refuse to
consider the possibility that dumping margins are a natural artefact of the
salmon life cycle. They do not seem to learn that salmon is not a likely
candidate for dumping and the only reason that it has been elevated to become a
major subject for investigation is simply because DG trade refuse to consider
any other options.
DG
Trade have produce an annual review of their activities in a document that is
many pages thick. It list every dumping case for the year and there are plenty.
Yet with the exception of canned mandarins (and as such is a manufactured
product), salmonid fish are the only foodstuff included. Every other dumping
case involves metals ores, steel, pharmaceuticals or chemicals. Perhaps, what DG
Trade really need to learn that they are being hoodwinked by a few blinkered
salmon farmers and that salmon dumping is not really a dumping case at all.
When
will they all learn?
Ignorance
is bliss!: The European Salmon Producers
Group spokesman told IntraFish that they are not unduly alarmed that the
Chileans may be stealing a march in the export markets. This follows news that
Chilean exports to Denmark have increased by 1700 percent in the first eight
months of this year. Exports to Russia have increased by 300% and exports of
frozen salmon to Germany have now surpassed those of Norway. The EUSPG spokesman
said ‘that Chilean imports do not impact in our thinking for the future’.
These
few words ably sum up why the European market is now subjected to the prospect
of five years of further market disruption. Simply put, the EUSPG clearly have
no idea as to what is happening in the marketplace and instead, through the
offices of DG Trade, they are trying to impose their perception of what the
market should be on the whole of the international industry.
The
still unnamed spokesman said that Scotland produces practically little frozen
salmon and therefore they are not head to head with Chilean producers of frozen
salmon.
A number of years ago, William Crowe, then head of the Scottish Salmon Growers Association expressed a similar view. He said that imports of frozen salmon were of little concern because none of it was destined for the retail market. At the time he made that comment he was attending the Scottish Fish Farming Exhibition in Glasgow. Yet only a couple of kilometres away, the Somerfield store in Howard Street was selling packs of ‘fresh’ salmon which was labelled ‘Farmed in Chile’. Somerfield only stopped selling Chilean fish when their supplier was taken over by another.
In the exact same manner, here is the EUSPG spokesman saying that he is unconcerned by imports of frozen Chilean salmon because he doesn’t see it competing against Scottish fish. Perhaps, ignorance is bliss but yet again the EUSPG are unaware what is happening in the salmon market and even more significantly, in their home market. This is because at the same time he has expressed his view, thousands of British consumers are buying ‘fresh’ salmon that is labelled ‘Farmed in Chile’ from their local supermarket.
This
ignorance of what’s happening in their own backyard should be sufficient
grounds for the European Commission to ask that if they don’t know what is
even being sold in their home market, how do they know what’s going on in the
wider European market and more importantly, if they don’t know what’s
happening in the European market, how can they know whether salmon are being
dumped there. The real answer is that the EUSPG are living in a world of their
own, blissfully ignorant of what’s happening around them.