reLAKSation 326. Callander McDowell
Christmas offers: In what has become something of a Christmas tradition, most British supermarkets have once again offered whole salmon at a discounted price in the run up to the festivities. Even stores that do not now usually sell whole salmon during the year make whole fish available for their customers at Christmas. Most prices are the same as last year showing that the retail price is not always dictated by the market price. Most supermarkets also offered some form of the more popular fillet at a discount. All such offers can be found in our 89 page retail survey for December. Please contact us for details.
Asda:
2007 - Whole salmon £10.00 each
2006 - Whole salmon £10.00 each equating to about £3.40/kg (Approx half price)
Booths:
2007 - Whole salmon £4.99/kg (save £1.00/kg)
Marks & Spencer:
2007 - Prepacked whole Lochmuir salmon £9.99/kg (Save £1/kg)
Morrisons:
2007 – Whole Scottish salmon £4.59/kg (Save 70p/kg)
2006 - Whole Scottish salmon £5.99/kg (Standard price)
Whilst Morrison’s did not discount salmon over Christmas 2006, they began to do so in this first week of 2007 – Whole Scottish salmon £4.49/kg (save £1.50/kg)
Sainsburys:
2007 - Whole Scottish salmon £3.49/kg (Save £3.49/kg).
Chilled whole prepacked Norwegian or Scottish salmon £3.99/kg (Save £4.00/kg)
2006 - Whole Scottish salmon £3.49/kg (Save £3.49/kg).
Chilled whole prepacked Norwegian or Scottish salmon £3.99/kg (Save £4.00/kg)
Tesco:
2007 - Whole salmon £3.49/kg (Save £3.49/kg)
2006 - Whole salmon £3.49/kg (Save £3.49/kg)
Waitrose:
2007 – Whole Scottish salmon £4.89/kg (Save £2.10/kg)
2006 - Whole Scottish salmon £5.99/kg (Save £1.50/kg)
New year new start: Just prior to Christmas, a source in the European Commission told Fiskaren that the EU is unlikely to lodge an appeal against the findings of the WTO investigation of the EU-Norway salmon dispute. The EU appears to have finally realised that their position is relatively weak and they risk coming off much worse if they decide to appeal. If Fiskaren’s source is proved to be right then it seems that, at long last, commonsense has prevailed.
We, at Callander McDowell, have repeatedly suggested that, not only should this dispute have never been allowed to drag on for so long, it should have never been initiated in the first place. This dispute was never really about dumping but rather the market image of Scottish salmon.
Scottish producers have always argued that their high quality salmon merits a premium price but the lower price of Norwegian salmon has undercut their process and devalued their market image. However, the very concept that Scottish salmon can generate a price premium means that other salmon must be sold at a lower price, thus undercutting the price of Scottish salmon. According to the WTO report, the EU concluded that these supposedly dumped imports had undercut the EU’s salmon industry’s prices by a figure of 12% but at the same time, the EU completely ignored the fact that EU producers enjoy a price premium of 12%, even though they recognised this premium on several other occasions. If the price premium is taken into account, there is clearly no evidence of any price undercutting.
This is just one issue of many in which the EU showed a blinkered approach to the salmon dumping case, but they were not the only ones. In supporting the safeguard application and the subsequent dumping case, the Scottish Executive thought that they were supporting the Scottish salmon industry but, in reality, their support extended to a minority of around twenty per cent of the industry. They discounted the rest because of its various links to Norway irrespective of the fact that it was a Scottish industry, operating in Scotland, employing Scottish people and most importantly producing a Scottish product. How they could risk damaging this industry is unexplainable?
However all this pales into insignificance compared to the fact that two important salmon producing nations have been locked in battle between each other at exactly the same time that wild caught fish supplies are in decline but when demand is continuing to increase. How could anyone even consider that any fish farming industry was over-producing when it is clearly not anywhere producing enough? The FAO suggest that global aquaculture production will have to double by 2030 to keep pace with demand. This equates to almost 40 million tonnes and independent Scottish farmers complained about a few thousand tonnes!!
Although there are still plenty of people who are prepared to deny it, the reality was that the salmon dumping case was always about marketing or the lack of it.
Speaking in November 2007, EU Fisheries Minister Joe Borg said that aquaculture is indispensable to feed the EU. We can only hope that his colleagues in DG Trade heard this message and reject any idea of appealing the WTO report as well as immediately removing the constraints they imposed on the trade in farmed salmon.
It’s in the marketing: ‘Which’, the consumer magazine concluded that shoppers get a prettier basket of food for your money, but little else when buying premium packs of fruit and vegetables. The UK’s mid range supermarkets such as Asda, Tesco and Sainsbury’s offer multiple ranges in the hope of attracting shoppers looking for value and shoppers looking for luxury. They hope that they can encourage shoppers to move from both the discount sector and the top end to their stores. Thus Sainsbury’s have ‘Basics’ and ‘Taste the Differences’ ranges, Tesco; ‘Value’ and ‘Finest’ and Asda; ‘Smartprice’ and ‘Extra Special’ ranges. They also offer a standard range which falls between the two.
‘Which’ said that the ‘Value’ or ‘Basics’ packs can be significantly cheaper yet just as tasty and nutritious as prettier up market produce, according to an article in the Daily Mail. The newspaper highlighted the price differential between varieties of products. These include:
Asda Smartprice potatoes 73p/2.5kg
Asda Maris Piper potatoes £1.78/2.5/kg
Price difference 144%
Asda Smartprice carrots 36p/kg
Asda standard carrots 62p/kg
Price difference 72%
Sainsbury’s Basics tomatoes £1.18/kg
Sainsbury’s standard tomatoes £1.28/kg
Price difference 8.5%
Sainbsbury’s Basics apples 14p each
Sainsbury’s Braeburn apples 30p each
Price difference 114%
Tesco Value new potatoes 25p/kg
Tesco standard new potatoes 51p/kg
Price difference 104%
Tesco Value broccoli £1.59/kg
Tesco standard broccoli £1.78/kg
Price difference 12%
Sainsbury’s said that the premium prices charged for its up market products require different growing techniques and varieties and farm yields tended to be lower whilst Tesco said that its buyers travel the world to find the best fresh produce for its more expensive ranges. However, regular shoppers can see that whilst the variety of fruit or vegetable can be the main justification for the premium, the difference is often down to the way that the product is presented. It is simply clever marketing.
However, it is not just fruit and vegetables that appear in the different ranges, both Sainsbury’s and Tesco offer salmon in value and premium ranges. Choosing one over the other can force the shopper to have to dig much deeper into their pockets.
Sainsbury’s ‘Basics’ salmon £6.98/kg
Sainsbury’s ‘Taste the Difference’ salmon £13.30/kg
Price difference 90.5%
Tesco ‘Value’ salmon fillet £6.98/kg
Tesco ‘Finest’ Salmon fillets £14.99/kg
Price difference 114%
The price differential is clearly significant but the difference between the products is less clear. It is not down to variety as in the case of apples since salmon is salmon. It is also not the country of origin as the cheap products are just as likely to originate from Scotland as Norway, although the stores do tend to be more specific about the origin of the premium products as further justification of the higher price but they don’t really suggest why this added knowledge justifies the higher cost. The main difference has more to do with the cuts than anything else. Sainsbury’ even label their product as ‘Different cuts and colours’. Thus, like with chicken, the breast fillets cost more than the thighs, so the best cut of fish is used to generate a higher price than, say, the tail fillet.
So whilst the WTO says that Scottish farmers receive a premium of 12% for their fish, the stores further differentiate the product to generate differentials of over 100%.
As we said, it’s all in the marketing.