reLAKSation 363. Callander McDowell
New beginnings?: Speaking to Fiskeribladet Fiskaren, Michael Russell, the Scottish Minister with responsibility for aquaculture, said that the salmon war with Norway is over and therefore it is time for a new start. Unfortunately, Mr Russell has said little to convince us, at Callander McDowell, that anything much has really changed.
When asked whether Norway had actually dumped salmon into the EU market, Mr Russell diplomatically suggests that he had not been long enough in his current role to know the answer. Instead, he said that there had been a period of dispute followed by the imposition of the MIP which he believed stabilised the market but this was all now history and there was a need to look to the future. He said that he wanted to make the Scottish salmon industry more competitive, an aim for which he should be applauded. Yet, at the same time, he appears to warn that if Norway should pump cheap salmon into the EU market, the Scottish Government would initiate a new dumping case against the Norwegian salmon industry. So what is new!!! This seems to us to be the same old rhetoric.
Mr Russell said that the two “Angusene”, Angus Morgan and Angus Macmillan of the EUSPG, are well known to him. This admission suggests that they still have his ear, or at least the ear of civil servants in his Fisheries Department. The ‘party’ message they hear has been repeated by Nick Joy of Loch Duart and a member of the EUSPG, also speaking to Fiskeribladet Fiskaren. He said that the small producer must have protection as he is concerned that Norway will continue to produce ever more salmon at the lowest possible cost. By comparison, Mr Joy said that his focus is on quality which therefore has a much higher cost.
We have argued many times previously in the pages of reLAKSation that this comparison is at the root of the conflict between independent Scottish producers and Norway. It is the fundamental question of what perception producers and the market want for farmed salmon.
As passionate advocates of aquaculture, we believe that farming can produce value for money fish and seafood which can replace our dependence on wild caught fish stocks. The fact that Scotland produces salmon and the threatened stocks are of cod and haddock is irrelevant as consumers have found that salmon can offer a value for money meal choice every bit as good, if not better, than other fish species. Farming has made salmon widely available and affordable and the market has responded favourably. Mr Joy is disappointed that salmon is perceived as a cheap fish but we think that this is something that the salmon industry should celebrate. Large scale salmon farming has brought tasty, health promoting fish to a wider consumer audience. Salmon farmers should continue to expand production to bring even more salmon to an even wider public.
Sadly, Mr Joy doesn’t share this view. He sees salmon as a special quality product and all credit to him that he has successfully promoted and sold his salmon this way. However, the high quality market is only part of, not the whole of the salmon market. In common with any luxury product, high quality salmon (whatever that means) is attractive to the limited number of consumers, who are willing to pay the premium price that producers like Mr Joy expect to receive for their product. The majority simply want tasty, affordable salmon.
The ‘war’ between Scotland and Norway arose because the average consumer began to realise that there was no real discernable difference between so called ‘cheap’ imported salmon and ‘high quality’ Scottish fish and therefore were much less willing to pay the premium for Scottish fish. This effectively undermined the Scottish production strategy and rather than look at how they could adapt the strategy to regain profitability, they opted to exclude imported fish from the European market through repeated dumping actions.
Mr Joy has worked hard to develop his niche market but it is exactly that – a niche market. If Mr Joy and his colleagues in the EUSPG want to develop this market, then they need to find more ways to distinguish their fish and justify the higher price as well as persuading consumers to pay it. If consumers want high quality salmon, they will pay the price, irrespective of whether there is cheap imported salmon on the next shelf or not. Mr Joy and the EUSPG do not need protection, they need market development. This is where Mr Russell should try to help.
However it is just not about market development. Mr Russell recognises that the costs structure is higher in Scotland (although we are still waiting for the results of the comparative cost study that the Scottish Executive commissioned back in 2003 to confirm this). He finds it puzzling that salmon can be produced so cheaply in a country where general costs are so high. The reason is simple; the industry in Norway is not subjected to such crippling regulation as it is in Scotland. We find it rather depressing that Mr Russell would be happy to resort to taking another dumping case to Brussels (although we suspect that Brussels would view the return of another salmon case with horror) yet he is not so willing to act on matters which he is in a direct position to address. It is only necessary to look at the new Strategic Framework and the make-up of his Ministerial Working Group to see where his priorities really lie.
We agree with Mr Russell that it is time for a new start. Whether the new start he envisages offers anything new is a totally different matter.
Soaring prices: The BBC recently commissioned retail analysts Verdict Research to track the cost of a typical shopping trolley of UK food items. The new index which was begun at the beginning of the year divides the household purchases into thirteen different categories. The index showed that during the eight months from January to August, meat and fish prices rose by 22.9% making them the fastest rising category. The full list includes:
Meat & fish + 22.9%
Store cupboard + 15%
Fresh fruit & vegetables + 14.7%
Laundry/washing/ paper goods + 14.4%
Drink + 6.8%
Pet food + 6.5%
Bakery/cereal + 6%
Frozen food + 5.8%
Household goods + 4.4%
Health & beauty + 0.4%
Ready meals - 0.4%
Dairy - 1.8%
Baby food - 2.5%
Prices of individual items that have increased most include skinless chicken breasts (+ 42.6%) and a pack of ham (+ 45.4%).
The figures are said to be in line with other recently published research showing the impact of food price rises on UK household budgets however, we would argue that they are not only misleading but also incorrect.
We are not the only ones to dispute these findings. Fishupdate.com reports that the main fish markets have indicated that whilst seafood prices have risen, they have not increased by anywhere near 23% in the past year. Whether wholesale market prices truly reflect prices found in the retail sector is also questionable.
Callander McDowell monitor prices in all the major retail outlets and our view is that with one or two exceptions all fish prices have remained relatively stable throughout 2008. The main change has been in tuna prices which may be linked to availability rather than the effects driving other food prices.
Why then has Verdict Research found that fish prices have increased so much? The answer is probably due to the way that they have grouped foods together in the various categories. In the case of fish, it is easy to group them together with other meats but prices of both are very different. One of the reasons that meat prices have increased is because livestock feed prices have risen so significantly affecting the cost of the butchered meat. Although fish prices have remained generally unchanged, the category prices have increased. Fish has been made to sound expensive even if it is not.
Whilst the BBC says that their survey is in line with others, the reality is that fish does not feature in any of the main analytical shopping baskets and therefore is not actually monitored at all. The reality is that fish is not considered part of the typical shopping basket and is largely ignored. In this case, it has become part of the news simply because it has been linked with meat prices. Verdict Research has got it wrong and fish prices have not soared. The reality is that it is still possible to get value for money fish products and benefit from a tasty and healthy meal choice.
British Food Fortnight: British consumers worried that they may get withdrawal symptoms after Seafood Fortnight need not worry because as Seafood Fortnight draws to a close, they can delight in the start of British Food Fortnight (20th Sept – 5th Oct), a celebration of all foods British. We, at Callander McDowell, have to admit that we have been unaware of this promotion even though it is now in the seventh year. This could be that we are so focused towards fish and seafood products that it has just passed us by. However on further reading, our ignorance of this promotion may be due to the fact that it is aimed much more towards the grass roots of the food industry rather than through the major retailers. What it highlights to us is how easy it is for consumers to miss this sort of promotion even if the industry promoting it believes it is their most important annual focus.
According to the British Food Fortnight website did you know that:
Britain produces 700 named cheeses - that’s more than France!
There are more than 2,000 varieties of apple grown in Britain.
Britain’s seasonal climate produces one of the greatest varieties of vegetables in the world.
No growth promoting hormones are allowed in the production of British meat.
British pig farmers operate, by law, to standards of welfare higher than those of nearly every other EU member state. 70% of imported pork, bacon and ham is produced from a farming system that would be illegal in Britain.
British chicken meat is the safest in Europe: 30% of European chickens reputedly have salmonella.
There are 350 varieties of potato grown in Britain, each with its own unique taste, texture and flavour.
British Food Fortnight doesn’t seem to include fish in its remit, presumably as SeaFish prefer to undertake their own promotion. This year, despite the extra week’s activities, we were yet again under-whelmed by what we observed in the retail sector, although there were one or two definite improvements to be seen this year. We shall outline our findings in a future issue of reLAKSation.