The editorial states that Chile is in crisis with ISA bringing the industry to its knees. Production is sliding, balance sheets are haemorrhaging, markets are in crisis and workers are losing their jobs. To top it all, IntraFish says that there is no quick fix in sight.

It continues that, in hindsight, there are plenty of reasons for the crumbling of Chile’s salmon empire; unrestricted growth, poor farm management, greed, arrogance and even ignorance.

The editor asks what this collapse says about the viability of aquaculture. He says that whilst he believes in the promise of aquaculture, the events in Chile make him question this belief. However, rather than overreact, we believe that Chile’s problems need to be put into perspective. They have a disease problem. They are not the first animal production industry to suffer disease and they will not be the last. For example, the UK agriculture industry has been beset with problems such as foot and mouth and bird flu. Now, farmers are concerned about the risk of blue tongue in sheep. Despite these problems, no-one has suggested that they are a black mark on their industry and these diseases will be used indefinitely to curtail the future development of agriculture.

Nor is ISA unique to Chile. Scotland is currently subjected to controls because the pathogen has been discovered in some farms even though there is no actual trace of the disease. ISA has also been found in Norway, where PD continues to plague farms. There is no black mark against these industries.

The Chilean industry may be feeling pain but it not yet on its knees. Production may be sliding but as Kontali report, world production may drop by just 8%, hardly what should be called earth-shattering. Of course, production falls will be much greater in some parts of the Chilean industry than others but then we have previously seen falls in Scottish production too.

Production may be down but the markets are hardly in chaos. Far from it, the markets seem to be benefiting from the Chilean downturn with prices soaring to high levels. The market seems to want to buy more salmon than the global industry can supply. More tellingly, the problems in Chile do not seem to have deterred the market at all. The effects of the problems seem to be more localised with significant job loses and reduced farm incomes. No-one wants to see job losses but they are not unique to the salmon industry with widespread redundancies throughout the world economies, all-be-they for different reasons.

IntraFish blames unrestricted growth, poor management, greed, arrogance and even ignorance for the collapse. This seems to summarise the collapse of the banking sector too. In fact, it summarises any new industry, whether in farming or manufacturing or the service sector.

New industries naturally attract those whose aim is to make a quick buck. After the initial wave, there is always a reorganisation in which those who lack long-term commitment depart to look for some other similar scheme. The European salmon industry has also shared similar experiences but has not merited a black mark. Like Europe, growth in salmon production has been rapid, but then such growth is in response to growing market demand.

There has been much talk about ISA being the result of a lack of regulation. The implication is that Chile has ignored the need for regulation and is now paying the price. The reality is that new industry will eventually force regulation as it becomes clear with time what regulations are actually required. Regulation naturally develops alongside the development of the industry and this is what is happening now in Chile.

We remember vividly some twenty years ago that a veterinary pharmaceutical company was repeatedly told that if they hadn’t taken the initiative and licensed medications for use in the Scottish salmon industry then farmers would still be able to use unregulated active drugs without fixed withdrawal periods. This is despite the fact that the Scottish industry was promoting fish of the highest quality, but otherwise could have medicinal residues. The introduction of medicinal regulation prevented this from happening but farmers saw it as a shackle to their freedom to treat their fish as they wanted. This change happened twenty years after the first smolts were put to sea in Scotland so was not an immediate reaction to the move to farm salmon in Scotland.

The Chilean National Congress is now debating a slate of new regulations developed by the Sandoval Commission, which is clearly progress. Perhaps, if the industry were determined to fight such regulation then it would be a black mark, but instead they should be applauded for recognising that regulation is the sign of a modern progressive industry.

The IntraFish editorial suggests that Chile’s failures aren’t just hurting Chile but are tarnishing everyone involved in the global aquaculture industry. Well, Callander McDowell is part of that global industry and we do not feel tarnished. Instead we are proud that the industry is responding in a responsible way, albeit slowly. IntraFish says that there is no quick fix. We would hope that there isn’t. If Chile is to get it right then it will take time. There is no doubt that Chile will recover. The global markets are crying out for farmed salmon and Chile is part of the international industry that can satisfy this demand.  

Easter prices: As in previous years, salmon was at the forefront of this Easter’s supermarket promotional activities. The main discounts for whole salmon from the fresh fish counter were as follows:

Asda: £5.00/kg (£4.93/kg*)

Morrisons: £5.29/kg - standard price (£3.49/kg)

Sainsbury’s: £4.45/kg (£3.99/kg*)

Tesco: £3.49/kg (£2.99/kg)

Waitrose: £5.29/kg (£4.59/kg)

(2008 prices) *initially offered at a lower discount

Prices this Easter were not as low as in 2008 probably due to higher salmon prices this year. The lowest Easter promotional price this year equates to € 3.94/kg / NOK 34.78/kg. This is not far from the €3.04/kg / NOK 30.04/kg price paid for salmon in Norway last week as quoted by IntraFish and helps illustrate the difference between perception and reality in the salmon industry.

For comparison, the cheapest whole salmon we found in French supermarkets during the run up to Easter was priced at €3.95/kg (NOK 34.82/kg / £3.49/kg) which is almost identical to the most competitive price in the UK market.

There were also a number of offers on cod fillet with the best deal available being £4.35/kg for wild caught fish and £6.00/kg for Norwegian farmed cod fillet (Price differences can be attributed to the different supermarkets in which the two were available rather than any difference between farmed and wild).

Still looking for Colin: So much interest has been generated by Sainsbury’s rebranding of pollock as ‘Colin’, as we discussed in the last issue of reLAKSation that the story, in one form or another, has continued to run on in the press.

We, at Callander McDowell, were certainly interested in buying a pack but have been thwarted in our attempts to do so. Our experience is that at least some of the selected stores do not seem to have the new product in stock. We have spoken to staff and looked for ourselves but to no avail.

We are beginning to wonder whether the new packs have been waylaid by someone taking designer Wayne Hemmingway’s tongue-in-cheek comments, in the Sainsbury’s press release, too seriously. He said that “the new-look ‘Colin’ sleeve will be the star of the Sainsbury’s store. We expect coach-loads to travel by land and sea to see it so I’d suggest that you keep it safely and sell it on e-Bay in the next century”. Maybe the packs are now being hoarded as future art work rather than being stacked on the shelves for customers to buy!!!.

During our search for the elusive Colin, we did come across the packs of British skin-on pollock fillet which Sainsbury’s highlight in their press release as priced at £9.90/kg to compete against cod fillet at £11.49/kg. We mentioned last time that the cod fillet priced at £11.49 is skinless and boneless and that Sainsbury’s do sell a skin-on cod fillet which is priced at £8.71/kg and therefore is cheaper than the pollock fillets. What is clear now is that Sainsbury’s have not followed their own price recommendation for the packs we saw were priced at just £8.49/kg. Given the choice between white cod fillets at £8.71/kg and brown tinged pollock fillets at £8.49/kg, we have no doubt that how ever they taste and whatever they are called, most consumers will still opt for cod (or cheaper haddock).

Meanwhile our quest to find Colin continues.