reLAKSation 240. Callander McDowell
Demanding times?: The Scotsman newspaper reports that Scottish salmon production is booming as demand recovers from the setbacks of recent years. The paper says that salmon consumption in Britain slumped by 20-30% in 2004 following the publication of US research suggesting that farmed salmon contained dioxins. However, they also say that demand rebounded quickly, which it did, as the Food Standards Agency responded with claims that the benefits of eating salmon outweighed the risks. The paper goes on to say that demand continues to recover with the latest research indicating that UK consumption of fresh salmon will rise from 301 million meals in 2003 to 356 million meals in 2005.
Yet, we, at Callander McDowell, are not convinced that this growth is part of any major recovery. It is just a continuance of the same growth potential that the salmon industry has experienced from the outset. The consumption of farmed salmon continues to grow for exactly the same reasons that it has grown since the 1990’s. This is because farmed salmon is both widely available and affordable and makes an ideal meal choice. Some commentators, including the Scotsman, would also say that consumption is growing because salmon is perceived to be a healthy option, but this is nothing new. Salmon has always been a healthy option. Oily fish such as salmon have always been associated with a reduced incidence of heart disease as drawn from evidence gathered from fish consuming peoples such as the Japanese and the Inuits.
According to the Scotsman, Sid Patten of the Scottish Salmon Producers Organisation said that this growth in demand has helped the industry to recover from recent setbacks but the reality is that it is the failure to understand why demand is growing that is the exact reason why the industry suffered from these setbacks in the first place.
It is totally clear that previously falling prices are the direct result of failing to meet consumer needs for an affordable, value for money, meal option. Instead, the Scottish industry directed its production at the premium end of the market which was not what consumers actually want. As a result, buyers looked to other producers to fill the gaps in supply and this drew in imports of salmon from elsewhere. The Scottish industry, or at least a minority of independent producers that were unwilling to face the realities of the marketplace, instead complained to Brussels destabilising the market again. The failure to obtain high premium prices made the independents uncompetitive and this led to a contraction of production as many were unable to generate the income necessary to pay to put more smolts to sea. This has led to some contraction of production but from comments made by Mr Patten, it seems that the expectation is that Scottish production for 2005 will be at a similar level to that of 2004 or just under 160,000 tonnes of production, not the 110,000 forecast by the independent salmon grower’s organisation, the EUSPG.
As ever, it is not demand but rather about producing what the consumer wants that is the real issue. It is now over 15 years since prices first collapsed and unfortunately the view that consumers actively select Scottish salmon to any other seems to still persist, at least amongst the industry anyway. The Scotsman reports that as demand continues to recover, the Scottish industry faces the prospect of not being able to keep up with demand. Yet, for the past decade and possibly more, the Scottish industry has never been able to satisfy UK demand, especially as it continues to experience growth. This is why Norwegian salmon and more recently salmon from Chile has found its way into the UK market. One of the main reasons why there is a shortfall is that the Scottish industry has always been keen to target the export market. The aim was to export at least 50% of production but this figure has never been reached. The export market has been attractive to the Scottish industry because they achieved Label Rouge standards and were able to use this to generate a premium in the French market; something they have consistently failed to do at home.
The Scotsman refers to a report by Ernst & Young, which suggests that a shortage of salmon could threaten loyalty to the product from UK retailers. They suggest that this issue could become significant as the current shortfall is met with supplies from Norway. Ernst & Young believe that the retailer’s commitment to buy only Scottish salmon may then be difficult to regain. Clearly, some retailers are loyal to the Scottish industry but only because it suits them to be so. This loyalty is highly overstated as the majority of British retailers are happy to buy salmon from different sources and have been doing so long before the recent problems developed. The truth is that the majority of consumers are not in the slightest bit interested in the origin of the salmon they buy. This is the main reason why the EUSPG instigated their dumping case as they wanted to force consumers to buy only Scottish salmon and make them pay a higher price to do so.
There is absolutely no reason why demand for farmed salmon should not continue to increase for years to come. Farmed salmon provides consumers with a readily available and affordable meal choice at a time when supplies of wild fish are still under threat. The final limitations on the salmon farming industry will not be a slowdown of demand but rather the inability to physically produce enough fish to meet the demand.
Scottish?: We previously discussed the comments made by Loch Duart Salmon MD, Nick Joy at the Aquaculture Today conference in which he said that Scottish isn’t used enough as a brand in selling food. This weekend some of the best of Scottish produce was showcased in Edinburgh at Tesco’s first ever ‘Enjoy the Taste of Scotland’ event. Visitors to the exhibition were able to view and sample produce from 67 Scottish companies which is sold in Tesco across the UK. According to the Scottish Executive website, Rural Development Minister, Ross Finnie, said that the Executive will continue to work to raise Scotland’s profile within the EU and throughout Europe. Yet, we, at Callander McDowell, wonder that however good the intention to promote the Scottish brand, the reality is that it simply evaporates when products cross the border into England.
It is unclear whether Mr Finnie worked with Tesco to host this ‘Taste of Scotland’ event but hosting the event in Scotland seems to be just a case of preaching to the converted. Surely, if the Scottish Executive wants to promote Scottish food, the first stop should be London or other British cities? The reason for choosing Edinburgh seems to be based on a complete difference in cultures.
The supermarket chains, Tesco and Morrisons dominate retail shopping in Scotland and visits to their Scottish stores highlight major differences with their English counterparts. A visitor to an English store would not be aware of any specific national identity other than some products may carry a local identity on the pack. By comparison, visitors to Tesco’s Scottish stores are overpowered with a sense of national identity. The Scottish saltaire is plastered all over the store with statements about the produce. Tesco also display a small free booklet highlighting Scottish products.
Morrisons also use the solitaire throughout the store and even endorse their Scottishness on posters outside the stores.
In addition, many of the products that Mr Finnie viewed at the Edinburgh event are only available at Scottish stores. For example, IntraFish reported at the beginning of the month that RR Spink & Sons were to launch Arbroath smoked salmon salmon slices at 35 of Tesco’s Scottish stores. Arbroath smoked salmon is available in Morrisons, Sainsburys, and Marks & Spencer’s in England so why not in Tesco too? It seems that there is a view that Scottish products won’t travel. The best example of this is the Arbroath Smokie which is one of the few Scottish products to be protected under European law, yet despite this protection, which suggests that it is in such demand that it should be protected, Smokies cannot be found in English supermarkets!
Finally, as our photo shows, whilst Tesco are clearly proud to sell Scottish fish in all their stores throughout the UK, they fail to mention that a large proportion of the most Scottish of products – salmon they sell, is actually produced in Norway!
