reLAKSation 290. Callander McDowell
Going down?: IntraFish reported at the end of this week that salmon prices have taken a dive. The prognosis for next week is that prices will fall to about NOK26.24/kg down about NOK 2.60/kg on the previous week. One of the main reasons suggested for the fall is that many people are expected to be away next week whilst at the same time slaughter volumes have increased. The prospect of the Brussels Seafood Exposition has also been suggested as undermining the price presumably due to the possibility that buyers may pressurise salmon companies for lower prices. Other reasons given include lower demand and various currency moves.
We, at Callander McDowell, are not surprised that prices have fallen. We have thought that they have been over-inflated for quite some time and some readjustment has been expected. We believe that this may have come now for two reasons. The first is that the traditional market for salmon used to have two peaks. One was at Easter and the other at Christmas. Prices rose towards Easter then fell during the summer to increase again in the run up to Christmas. This year, the retail market did not seem to respond to salmon in the same ways as previous years which we attribute to salmon’s high price. Now that Easter has passed, demand cannot be sustained and this has undermined prices.
At the same time, we have always believed that the high prices have been in part due to the ongoing salmon case between Scotland and Norway. As with previous dumping cases, the prospect of interference in trade through the imposition of trade measures has destabilised the market, this time pushing prices upwards. Although the measures were imposed over a years ago, the civil and the WTO cases have prolonged the agony and uncertainty. This week, the EU’s anti-dumping considered the possibility of a review and the prospect of a return to free trade has brought about the needed readjustment. The farming industry may think that existing price levels were ideal but the developed markets have been showing signs of suppressed demand due to higher prices. Rather than pay these elevated prices, consumers have been looking for, and finding, cheaper alternatives.
It is possible that we are wrong and this current price fall is just a blip and prices will increase again in weeks ahead. However, if they do not undergo some readjustment now, they will still need to readjust in future.
Certainly, some of the retailers are now recognising that price cuts are needed to stimulate demand and this week we are seeing the appearance of genuine discounts on salmon products and not those seen previously on products that had had their price inflated first before being discounted.
More money than sense: The Times reported that affluent shoppers are being duped into paying double for farmed fish that is sold as wild by British retailers. Tests conducted by the Food Standards Agency have shown that sea bass and sea bream supposedly caught at sea were instead farm raised. The Times said that the disclosure will heighten concerns in other food markets that more affluent consumers, who spend up to £2 billion a year buying wild, free range or organic products, are being targeted by organised fraudsters. This follows similar concerns where battery eggs have been sold as free range and corn fed chicken dyed yellow. The FSA are expected to increase calls for further regulation of Britain’s £1 billion fish market.
A source told the Times that the problem is that demand for fashionable fish like bass and bream is outstripping supply and criminals are moving in to fill the gap. Tests by Eurofin, a French laboratory, are supposed to be able to distinguish wild fish from farmed based on differences in the levels of various isotopes in the flesh. The FSA have allegedly identified wild sea bass and sea bream destined for the UK as having the isotopes of farmed raised fish.
We, at Callander McDowell, are not surprised that criminal gangs are capitalising on the naivety of many affluent consumers. The problem is that many consumers are bombarded by conflicting messages that it is not unexpected that they can be so easily duped. Many celebrity chefs advocate that wild fish are best and at the same time, environmental groups insist that fish farming is damaging to seas. It is therefore no wonder that the affluent consumer insists on buying wild. In additions, the Times say that wild fish bring expected health benefits and supposedly better flavour and this is why consumers are prepared to pay British retailers almost double for the wild fish.
Most fish in the UK is now sold by the major supermarkets so if the FSA are correct that consumers are being duped then these store groups have been deceived too. As a company that spends a great deal of time monitoring what is happening on the supermarket shelves, we are sure that all supermarket customers who ask for wild sea bass and sea bream actually receive wild fish and those that want farmed fish get farmed fish. This is because supermarkets follow the labelling legislation and in every case that we know wild fish are clearly labelled as wild and farmed as farmed. The obvious response to this observation is that a label does not provide any guarantee that the fish is what the label says it is. This is a valid point but other observations help to confirm the origin of the different fish.
Farmed bass and bream tend to be of a standard size whilst as we discussed in the last issue of reLAKSation, wild fish are usually much larger and chunkier and have a totally different look about them. Wild bass are usually sourced locally and in order to add value, suppliers tend to tag them. Where wild and farmed are supplied together the differences are obvious. It would be harder to differentiate the fish if only wild or farmed were available on its own but once any customer has seen the differences, future identification would be simpler. However, as we have suggested, we do not doubt that supermarket customers are getting the fish they ask for.
The story for customers of independent fishmongers could well be very different. We are not suggesting that any British independent fishmonger has misled their customers and sold farmed fish as wild but the potential to do so is much greater. This is because the range offered is usually smaller and therefore they tend not to stock both wild and farmed options, but more importantly, many fishmongers do not label their fish in accordance with the labelling legislation. In many cases fishmongers just use the name and the price failing to mention whether the fish is wild or farmed and its geographic origin. The reason they do not comply with the legislation is that no one is policing it. Perhaps the FSA and the local Trading Standards Officers do not consider it sufficiently important but as the FSA believe that consumers are being duped, perhaps they need to ensure all opportunities to mislead consumers are firmly closed.
The headline of the Times article says that affluent consumers are paying double for farmed fish sold as wild. Perhaps these consumers would be better buying their fish from their local supermarket because most stores do not sell wild fish at double the price of farmed. Only three supermarket groups in the UK sell both wild and farmed sea bass. None sell wild sea bream. The price differential for two of these stores are:
Farmed £8.99/kg, Wild £12.99/kg
Farmed £13.49/kg, Wild £18.99/kg
Which shows that if customers are judicious in their shopping it is possible to buy locally caught wild fish for less than the price of imported farmed in another store.
Prices in the third store group are more surprising:
Farmed £12.19/kg, Wild £12.29/kg
A difference of only 10p/kg. You probably want to know how they manage to persuade consumers to pay so little less for farmed then wild fish is also available. The simple answer is that the farmed sea bass are sold at a fixed price per fish which is easy to do when farmed fish are all of a standard size. Perhaps it is not just affluent consumers that are being duped?
Our apologies: Fishupdate.com report that Shetland Aquaculture has welcomed the decision by the Association of Shetland Community Councils to carry out its own mobile phone coverage survey and lobby for improved coverage in the outer isles. David Sandison of Shetland Aquaculture said that the lack of coverage in remote areas has serious implications for many fish farming businesses. We, at Callander McDowell, have every sympathy.
Last week, Callander McDowell and two thousand other telecoms subscribers were victims of a new crime wave spreading through the city of Manchester. Thieves lifted the manhole covers and helped themselves to a significant length of telephone cabling leaving us without telephone and internet services for over a week.
Whilst the loss of a landline can be overcome with mobile phones (except perhaps in Shetland) the loss of internet services felt akin to being cast away on a desert island. It is not until you lose this service that you realise how important it has become in our daily lives.
We were reconnected to a phone service after three or four days but not to our number meaning that we received calls but not those intended for the business. Those went elsewhere. Persuading the telecoms company that there was a continuing problem proved to be a nightmare for when they tested the line it showed to be without fault. They could not be convinced that the line wasn’t ours.
A full service was finally restored on Friday afternoon so our apologies to anyone who has had difficulty in reaching us or has not yet had a response. We hope to catch up with everyone over the next week.