reLAKSation 238. Callander McDowell
Pssst, want some cheap salmon?: Against the current background of rising salmon prices, we at Callander McDowell can lay our hands on whole fish for only £2.98/kg (€4.28/kg, NOK 33.76/kg). Meanwhile, IntraFish report that salmon prices in France have broken through the €5 barrier. In addition, Direct Ocean, France’s leading salmon importer forecast that they might even rise to €5.50/kg (£3.80/kg) this week. By comparison, £2.98/kg looks cheap, especially as we only need to visit our local Asda store to buy it.
One of the reasons for the continued rise in prices is heavy demand from Russia where there is a widespread protein shortage. The Russian newspaper Kommersant claims that salmon prices have recently risen by 100% because of shortages of beef and pork and concerns about bird flu. However, it is not just salmon that has benefited from the price rise; the price of other fish has risen to record levels.
This strong demand for salmon also comes in the run up to Easter, one of the highest volume sales periods for salmon in Europe. Young’s Seafood told fishupdate.com that this might lead to a shortfall in salmon supplies over Easter, especially as colder than normal water temperatures in Scandinavia and Scotland have supposedly slowed salmon growth.
High prices and expected shortages do not appear to be a barrier to planned promotional activity in the retail sector. Asda have reduced the price of whole salmon by £1.30/kg and other supermarkets have discounted prices by even more. This is part of the normal run up to Easter when salmon demand rises encouraged by supermarket promotions. Consumers have become used to lower prices over this holiday period and it seems that the supermarkets do not intend to disappoint their customers despite the higher market prices and possible shortfalls. We will report all the discounts and price promotions found in British supermarkets in the next reLAKSation.
First Instance: As we discussed in a previous issue, some commentators believe that rising prices are the result of the European Commission’s trade measures. This is absolute nonsense since the MIP is just a safety net not a boost to sales. This week, the Norwegian Seafood Federation and the Norwegian Seafood Association, together with a handful of farming companies have followed the example of Fjord Seafood and have lodged a complaint with the European Court of First Instances in which they intend to challenge the ruling. The Norwegian Government is also taking the case to the World Trade Organisation.
We, at Callander McDowell believe that the Norwegian industry is right to take this step. Some argue that the MIP is a weak measure that has negligible effect on Norwegian imports and thus a great deal of energy is being exerted for little gain. We would disagree. It is a shame that it has taken fifteen years for the Norwegians to decide to challenge the dumping measures and prove their innocence. The EU have acted as judge, jury and executioner and not given the accused a fair hearing. The EU have decided that Norway is guilty and should be punished but now the Norwegians will get their opportunity to state their case to those without a preconceived view. If, the Court finds in favour of DG Trade, then that is a different matter altogether, but until then Norway has a right to be heard.
We support this view because we do not believe that dumping has taken place at all. We have always argued that the dumping actions have nothing to do with dumping at all but rather about the perceived market image of Scottish salmon. The fact that the independent farmers do not achieve the price premiums that they believe that they have a right to expect is blamed on imports of Norwegian fish which they believe are of inferior quality and therefore should cost less than their own.
Yet, when imported salmon is sold at a lower price, the independent farmers claim that the Norwegians are undercutting their prices. It seems that when a price differential does occur, these independent farmers prefer to call it undercutting rather than a premium. It seems to us, that they cannot have it both ways.
Having taken fifteen years to bring the dumping case to the European Court, we hope that the Norwegians do not blow the opportunity. It seems that much of the case revolves round the question of the domestic industry in Scotland and the level of representation. Certainly, the first issue raised by the Norwegian Government in their case to the WTO questions whether the application for investigation was ‘made by or on behalf’ of the relevant ‘domestic industry’. We believe that this is a non-starter and we understand from reports in IntraFish that Jan Magne Juuhl Langseth of the law firm Schjødt has taken a similar approach in his case on behalf of Fjord Seafood.
The WTO trade rules are clear about
the definition of the domestic industry Part I: Article 4 defines the
domestic industry: “ 4.1
For the purposes of this Agreement, the term “domestic industry” shall be
interpreted as referring to the domestic producers as a whole of the like
products or to those of them whose collective output of the products constitutes
a major proportion of the total domestic production of those products, except
that when producers are related to the exporters or importers or are
themselves importers of the allegedly dumped product, the term ‘domestic
industry’ may be interpreted as referring to the rest of the producers.”.
This means that even if just one farm is locally owned, it could be described as
being the domestic industry. This is irrespective of whether there are hundreds
of other farms under foreign ownership but farming locally. In this case, the
EUSPG can claim to represent the domestic industry even though they account for
less than 20% of European production, which is less than the 25% needed if all
the farms in Scotland, included those in foreign ownership, were classified as
being the domestic industry.
This
doesn’t mean that the Norwegians shouldn’t argue that the claimed level of
representation was inaccurate because it was, and it is on this basis that the
regulation should be annulled. We will have to wait and see whether Norway
argues its case successfully or not. The jury is still out.
Sustained:
There has been a great deal written in recent weeks about the question of
supplies of sustainable fish. This follows the actions of Greenpeace, which has
held rooftop protests to persuade supermarket chiefs to delist fish species from
supermarket shelves that they consider to be threatened. In response, stores
such as Wal Mart have said that they will in future aim to source all its wild
caught fish from fisheries certified by the Marine Stewardship Council.
We,
at Callander McDowell wonder whether this is an unrealistic target especially as
after ten years, the MSC certify only two fisheries that are capable of
supplying sufficient volumes of fish to world markets. Clearly, there is a long
way to go before supermarket fish counters can stock a good choice of
sustainably sourced fish. This ignores the possibility that increased demand for
sustainably sourced fish will place increased fishing pressure on certified
stocks.
Seafood.com
make the point that the supermarkets are lurching from crisis to crisis because
instead of standing up and defending their fish sourcing policies, they have
given into this pressure, which does not come from their customers but from
NGO’s such as Greenpeace. The problem is that Greenpeace is not always right
and in some cases has not thoroughly checked the facts behind its claims. This
is apparent from the fiasco over skate, which they claim are threatened yet
suppliers maintain that only one stock is under threat whilst other remain
viable. They seem to have a point since Waitrose, the most sustainably
responsible supermarket is still happy to stock skate on its fish counters.
The problem is where will all this end? So far the focus has been on wild caught fish but Greenpeace’s agenda extends to farm raised fish too. In their report ‘ A recipe for disaster’ Greenpeace ask whether aquaculture is the answer. In response they state: Aquaculture has been promoted by the industry and Governments as being the solution to sustainable fisheries, and has great appeal to retailers because it supplies a steady cheaper supply of seafood of standard size and quality. Unfortunately with the exception of some herbivorous shellfish and herbivorous freshwater fish farms based on closed recirculating pond systems, most aquaculture exacerbates the problems of over-fishing and breaks the principles of sustainable fisheries. Clearly, it won’t be too long before Greenpeace are taking to the rooftops to remove farm-raised fish from the supermarket fish counter! Even those who claim sustainable production may not be exempt!