reLAKSation 257. Callander McDowell
Officially organic: According to fishupdate.com, the Soil Association have now given their full backing to organic aquaculture. Previously, the standards used were approved by the Government’s Advisory Committee on Organic Standards. Now, the Soil Association has introduced its own radically improved standards which brings aquaculture in line with other types of organic farming. The Soil Associations’ aquaculture specialist Peter Bridson said that Soil Association certified organic salmon are now the most sustainably produced fish consumers can buy. He added that another key factor in choosing organic farmed fish is that this premium product allows smaller scale locally based producers to make a living whilst respecting the ecological constraints of the aquatic environment.
Small scale salmon farmers in Scotland have been actively converting to organic production because organic salmon is now perceived to be the sector capable of delivering a premium price. Until recently, these farmers had hoped that the Scottish identity would deliver this premium but consumers have not been sufficiently driven to dig deeper into their pockets to pay a higher price based on origin alone. Now, organic salmon offers the expectation of improved margins, or does it?
Prior to the jump in salmon prices, there was a significant differentiation between organic and traditional salmon. For example in January 2005, British supermarket Sainsbury’s was selling organic salmon for £17.34/kg. By comparison, their ‘Taste the Difference’ premium label Scottish salmon was priced at £13.29/kg. Sainsbury’s were also selling promotional packs of Scottish or Norwegian salmon for £15.76/kg but as these were on ‘Buy One Get One Free’ promotion, the salmon was actually priced at £7.88/kg.
This week the picture is completely different. Sainsbury’s Scottish organic salmon is priced at £13.99/kg whilst their premium TTD salmon costs £16.96/kg. Having found that they needed to combat reduced sales with the re-introduction of a promotional pack, Sainsbury’s have priced their standard salmon fillet from Scotland or Norway at £19.08/kg. Unlike the previous BOGOF promotion, shoppers can buy this pack at this price. However, if they want to take advantage of the promotion they can buy 2 and save £5 reducing the price per kilo to £11.73/kg.
Organic salmon is starting to look a poor proposition with standard salmon prices overtaking those of organic, at least in parts of the retail sector. The premium supermarkets have recently repositioned their prices to maintain a differential of a couple of pounds.
Could it be that the rush to convert to organic has resulted in a form of over-production? IntraFish point out that whilst the organic sector may be still growing, there are plenty of shoppers who are happy to continuing buying non-organic fish and seafood. Certainly, recent production of organic salmon in Scotland only amounted to a couple of thousand tonnes. It is possible that a rush to convert may mean production is growing faster than consumer demand. This is certainly one reason why prices are being kept down. Perhaps, these new organic farmers might have been better off if they had continued to produce traditional salmon and so benefit from the higher prices.
Hung over?: Trond Davidsen, Managing Director of the Norwegian Seafood Federation aquaculture division has said that the salmon MIP is an anachronism that should be removed as soon as possible. He was commenting on an IntraFish editorial which argued that the situation in the salmon market has changed so much since the EU imposed this punitive measure that it is no longer relevant and should go.
Mr Davidsen also argues that there were no grounds for the anti-dumping measures so they should never have been introduced and they should also be removed. He said that this is why Norway has taken the matter to the WTO.
Mr Davidsen is right. The MIP should never have been introduced and Norway is justified to challenge the decision. By comparison, the fact that the market situation has changed is no justification for removing the measures. The MIP is intended to be a safety net if prices were to fall. It makes no difference that salmon prices are currently high now the MIP still acts a safety net. After all, prices could collapse tomorrow (albeit extremely unlikely) and then the MIP might be relevant. The real problem is that the MIP is not relevant and with changes within the industry, has become even less so.
The MIP is a pointless measure because all it does is place a restraint on Norwegian imports but as any observer of the market will now report, increasing amounts of salmon from other sources are regularly imported into the European market. The MIP will therefore not work.
However, the most important reason why the MIP is now irrelevant is because many of the complainant salmon companies have now converted to or are in the process of converting to organic production and as the EU have now decreed, organic salmon producers are not considered to be part of these regulations as organic salmon is considered to be a different market.
The EU should now consider withdrawing the MIP for the simple reason is that it no longer protects those producers whom it was intended to protect. The MIP therefore has no purpose. It is not just irrelevant, it is defunct.
Cheep cheep!: IntraFish suggest that the organic aquaculture sector is growing indicating a growing concern for welfare and environmental issues. This is underpinned by the news that the Marine Conservation Society is seeking to draw up its own guidelines as to what is and what is not acceptable. The RSPCA are also promoting their own standards with a series of adverts, which recently upset the Salmon Farm Protest Group. Together, these would suggest that consumers are becoming more concerned about the way their food is produced or perhaps not?
The Sunday Herald report that animal welfare is being compromised by penny pinching consumers who opt for cheap foreign imports (of chicken and meat) over more expensive ethically produced products.
Compassion in World Farming claims that many farmers cannot afford to improve their standards further because they are struggling to match the process of inexpensive foreign meats which are being snapped up by consumers. They claim that the global market is undermining local production. They say that the only way that these standards can be protected is if British consumers buy locally produced food.
However locally produced food is also under attack. The Daily Mail claims that more than 200 million chickens reared in Britain suffer deformities because of the way that they are raised, primarily due to the fast growth rate.
Some supermarkets are now buying chicken from slower growing varieties and others promote the organic and free range standards. However, the reality is that the consumer wants cheap food and this places pressure on the cost of production.
IntraFish have highlighted that the organic market for seafood is growing but point out that many shoppers are still happy to buy non organic stuff. The bulk of consumers are not really interested in how their food is produced preferring to focus on how much it costs.
The salmon market is not much different from the poultry sector. There is a demand for organic and welfare standard produced salmon but the bulk of the market is still more interested in the price.