reLAKSation 263. Callander McDowell
Fully deserved?: Speaking on IntraFish TV, Nutreco’s Wout Dekker said that whilst nobody could have predicted the recent sky high prices, the industry deserves the ensuing rewards because the previous four years have been extremely tough. However, there could be a very high price to pay for these good times.
Mike Parker, Deputy CEO of Young’s told IntraFish that recent market volatility threatens growth of the salmon market. He said that recent high prices had resulted in a steep downturn on salmon consumption and set off a chain reaction from the retailer down the supply chain. Certainly, our own observations of the retail sector appear to support his view.
Mr Parker said that when prices climb, the processing companies are the first to react by changing pack weights and presentation rather than changing the selling price and this is what did happen once prices began to rise. Consumers were seemingly ‘protected’ against the rising prices and continued to buy salmon as previously but as Mr Parker points out, this is only a stop gap and eventually retailers reduce promotional activity and increase prices.
It was not until the retailers actually increased their prices, that a fall in consumer demand was first reported. This began to happen during this summer and has been apparent ever since. Our observations of the amount of salmon displayed in supermarkets, irrespective of whether it is on the fresh fish counter or in the chiller cabinet is a clear indication that demand has fallen off. Supermarkets have not been stocking as much salmon as before prices began to rise. The same response can also be seen in French supermarkets where the decline in shelf space given over to salmon is even more perceptible. French consumers might even be forgiven for thinking that salmon has become an endangered species due to its rapid disappearance from the supermarket.
Unfortunately, it is not just fresh and chilled salmon that has disappeared from the supermarket shelves, added value products made from salmon have also vanished. Some have just been totally withdrawn but more worryingly, some are now been manufactured substituting farmed Atlantic salmon with cheaper, and less appetising, wild chum salmon. This means that consumers who find the taste much less attractive could be deterred from buying salmon completely.
Farmers may be benefiting from the high salmon prices, but for every day that prices remain high another fragment of the salmon market is being gradually eroded away.
Mike Parker said that the market needs sustainability and predictability if it is to continue being the driver of a £2 billion UK seafood market. The greatest benefit from framing is the ability to provide predictability, not just in price but also in supply and quality. The industry risks undermining this unique selling point if it allows prices to rise and more importantly, it can irrevocably damage consumer demand.
Prices have now started to come down but the supermarket had already recognised that they needed to resume promotional activity if they were to persuade consumers to restart buying salmon before they found a realistic alternative. Some supermarkets had begun promoting salmon over the last month, but this week, Morrison’s supermarkets knocked £1/kg off the price of salmon fillet, their first ever salmon promotion this year. This is clear proof that consumers are not to buy salmon at any price, irrespective of whatever health benefits salmon can offer.
The main reason that prices have rocketed upwards is the uncertainty in the marketplace resulting from the trade disputes instigated by the European Salmon Producers Group. These independent Scottish farmers have always argued that consumers are willing to pay more for Scottish salmon and that cheap imported salmon has undermined their market. Clearly, what the recent price hikes have shown is that consumers are not prepared to pay more for any salmon, whether it’s deserved or not!
Diving in: According to IntraFish, the Marine Stewardship Council is to consider the inclusion of farmed seafood within its existing certification scheme. This decision comes after the news that nearly half of all the fish consumed in the world originates from aquaculture. In addition, the widespread availability of some farmed species means that they often dominate the retail fish counter attracting the attention of many consumers.
Since their inception over ten years ago, the Marine Stewardship Council have always rejected any suggestion that they should include aquaculture within their remit, even though aquaculture is the greatest management tool for the safeguard and protection of wild catch fisheries.
The reason that so many wild catch fisheries are under threat of collapse from over-fishing is the increasing global demand for fish and seafood products. If a local fishery should fail, then fishermen or buyers simply seek supplies from another, increasing the pressure on that one. The only way that the relentless pressure on wild catch fisheries can be eased is if supplies can be sourced elsewhere. The most obvious source of managed fish supplies is through aquaculture. It is already apparent from the development of the salmon industry that when consumers can access widespread supplies of value for money fish, the pressure on other species eases. This is why salmon is now more popular than cod.
In every other area of food supply, man has turned from hunter gathering to farming and there is absolutely no reason why this should not happen with fish and it is happening. Unfortunately, the MSC have been slow to recognise this. In part, this is because one of their original two sponsors was the WWF who were and still are, against the idea of farming the seas. The reality, however, is that man will always have an impact on his environment, whether the WWF like it or not. The world is an evolving place, not a museum and it is impossible to take a snapshot of the world at a moment in time and then protect it at that point. It is possible that efforts can be made to minimise the impact of man’s activities and that is why the MSC were wrong to exclude aquaculture from the start, especially as many aquaculture companies are just as keen to help protect the environment in which they operate.
Green for go: Fishupdate.com report that the third largest supermarket group in the UK, J Sainsbury, is to help alleviate consumer concerns over shrinking fish stocks by launching a new colour coded traffic light scheme to warn customers about which species are endangered and which are OK to eat. The plan is that a green, amber or red tag will indicate which species are endangered and which are sustainable. Currently their big sellers are Icelandic or Norwegian caught cod and haddock and farmed salmon and prawns, all of which should carry a green tag. Sainsbury’s have said that it will display only green and amber tagged fish by the end of the year even though it could cost over £1.5 million in lost sales.
The supermarket group has introduced this scheme because it realised that it would be unable to achieve its goal of only selling fish through the MSC by 2010 because insufficient fisheries have been certified to MSC standards. Instead, they have devised the most rigorous checklist to help determine whether it was buying fish from sustainable sources or not.
Whilst, Oliver Knowles of Greenpeace has welcomed this scheme as being a robust decision making process which should have a real and practical effect on the shelves, we, at Callander McDowell, remain puzzled.
If Sainsbury’s wish to discourage consumers from buying fish, which their rigorous checklist has identified as coming from a fishery which only merits an amber tag, then surely Sainsbury’s should simply not stock this fish. They should make the decision on behalf of their customers that the fish should be best avoided. Instead, they should only stock fish that qualify for a green tag. Surely the best way to safeguard threatened fish stocks is not to sell the fish at all. Even though fish supply is one of the ‘hot’ issues, perhaps Sainsbury’s are more concerned about protecting their 21.4 market share of fresh fish ( as compared to their 16.5% market share of grocery) rather than the protection of fish stocks?
Surely the sale of only sustainable fish, even if not fully certified by the MSC, would negate the need for this traffic light scheme completely.