Callander McDowell
Callander McDowell
reLAKSation no 406
First and last?: Scottish rope grown mussels to enter the Marine Stewardship Council programme for certification as sustainable. According to IntraFish, this is the first time that any aquaculture produced seafood has entered into the certification scheme, despite the MSC's previous stance that they would not certify aquaculture products.
The MSC say that this change of heart is because of the cultivation techniques used in which the larvae or spat naturally settle on ropes suspended from the surface. The spat then feed on marine plankton maturing into full-grown mussels.
Yet, however much the MSC dress this up as a natural process, the reality is that rope grown mussels are a product of aquaculture and thus are really outside of the MSC's stated remit. Such bending of their own rules is nothing new for the MSC because even though the mussels are claimed to be the first aquaculture product to be assessed by the MSC, they are not, as wild Alaskan salmon were in fact the first farm raised fish to be certified as sustainable by the MSC.
The MSC describe wild salmon production as an enhanced fishery but this is just a fancy way of saying that the early life stages are actually raised in a hatchery, in exactly the same way as farm raised salmon.
The problem with the MSC is that they still fail to recognise that the best way to take the fishing pressure off threatened stocks is not to encourage consumption of stocks they deem to be sustainable but rather to supply more fish from farming.
Two stories in the news this week bring into question whether the MSC's claims that products carrying their blue tick symbol are sustainable or not.
In a letter to Alaska's Cordova Times, the native community writes about the fate of their subsistence salmon fishery. The Alaska Department of Fish and Game have closed the fishery 'until further notice' because of concerns about the diminishing size of runs of King salmon. The letter points out that whilst the ADF&G have been quick to close the local fisheries, they are extremely slow in dealing with the underlying problem, the massive by-catch of the Alaskan pollock trawler fishery, which one year amounted to 120,000 fish.
The State has now decided to cap the number of salmon caught as by-catch at a still significant 60,000 King salmon, but are not to impose this limit until 2011. The letter argues that big business is being favoured to local subsistence fisheries.
However, there is a even more fundamental question as to how any fishery that has such a commercially important by-catch has been certified as sustainable by the MSC? Any fishery with such a by-catch cannot be sustainable. Given all the recent discussion about fishing methods in the aftermath of the film ‘The End of the Line’, the question as to how any trawled fishery can be deemed to be sustainable also needs to be considered.
Seafood Source recently interviewed Jeremy Langley, Waitrose's fish buyer, who said that the retailer had a strict buying policy that takes the form of a four point scheme. He said that these are:
- The fish should not be regarded as threatened or endangered.
- The fish must be caught from a well-managed fishery with scientifically based quotas.
- The fish must be caught using the most environmentally responsible fishing methods appropriate to the species.
-The fish must be fully traceable from catch to consumer.
When asked how the MSC certification scheme fits in with Waitrose's policies, Mr Langley replied that whilst they stock some 25 MSC accredited lines, there are some MSC certified fish products that they won't stock such as MSC certified New Zealand Hoki. This is because Hoki are fished by bottom trawling which doesn't meet the four point policy with regard to the fishing methods.
What Mr Langley appears to be saying is that whilst MSC certification indicates that the certified products are sustainable, they may not be sufficiently sustainable for Waitrose? If they are not sustainable enough for Waitrose, how can we be sure that they are sustainable enough for the general public? We suspect that we cannot.
Bargain basement cod: One leading UK supermarket is this week discounting basa fillet from its fish counter. Basa is considered to be a low cost alternative to species like cod but with cod currently being so cheap, basa is now not looking so attractive to consumers. Hence, the need to give this further incentive to shoppers although how effective this will be is unclear since cod too has been actively discounted costing less in some stores than basa’s promotional price. In fact with cod fillet costing less then £5/kg, it is cheaper than the price of most fish on the fish counters.
Cod is cheap because there are plentiful supplies around and whilst some commentators suggest that demand is low because consumers are still heeding earlier advice from the environmental groups to avoid cod, the reality is that it is the change by the major processors from cod to Alaskan pollock that has dramatically affected demand. Demand for cod is not what is used to be but the mindset that cod is what consumers want has not really changed.
It is the fledgling cod farming industry that has been most badly hit by the changing pattern of cod demand. This week, the average price of farmed cod took a further dive to just over NOK 20/kg, just about the lowest point ever. This average price is slightly misleading since there is a significant variation in the export price depending on the destination country. For example, prices to Hong Kong are NOK 41.41/kg and NOK 27.23/kg to Spain. According to IntraFish, it is the very low NOK 13.14.kg price to Sweden that has really affected the average figure. What is unclear is at this stage is the volumes that have determined these prices. Certainly, NOK 41.41/kg is an attractive price but unrealistic if it relates to just a few kilos of sales?
The cod farming industry has had its ups and downs in the last month. Share prices in the leading companies rose on the news of grants and loans from Innovation Norway which allows the farming companies breathing space to address some of the problems. The main discussion appears to focus on enabling the farming industry to address the question of production costs in the hope that the price differential between costs and sales can be minimized in the same way that the salmon industry reduced its costs and boosted prices.
However cod is not the same as salmon and the industry is not going to develop in the same way despite hopes that it must. It is true that the pioneering farming companies had much higher costs as compared to today’s industry but there was one fundamental difference between the early salmon farming companies and those now producing cod. Salmon prices prior to 1989 were extremely high. It didn’t make any difference whether farmers had high production costs or not because the market price of salmon was even higher. Production cost reduction only became a major issue in 1989 when the price of salmon fell, allegedly because of Norwegian over-production but in reality because of a lack of any significant market development. This can be easily demonstrated by considering that if the international salmon industry was over-producing in 1989, then why has production continued to soar since? The answer is that salmon was repositioned in the marketplace from its premium image to one as an everyday food and this together with a more realistic market price created a massive increase in demand.
Like salmon, cod farming has begun with very high production costs but unlike salmon, the market price is well below the cost of production. This is a very different position from the salmon industry and one that will require a much different approach.
Clearly if production costs can be reduced then it would go someway towards easing the pressure on margins but cost reduction, especially for a marine species, is not going to happen overnight or any other short-term period. Cost reduction is a much longer-term challenge. Instead, the only way to improve margins is through a more market orientated strategy that will increase the selling price and this will only happen if a greater wedge can be driven between farmed and wild cod so they can marketed in total isolation from each other in totally different ways.
Instead, in an effort to reduce costs and gain the benefits of co-operation, at least one company appears to be heading it the opposite direction with the news that Cod Farmers has signed a joint sales and marketing agreement with Aker Seafoods whose main interests appear to be with wild cod. This agreement is in part motivated by the need for access to processing facilities so how far any alignment with wild fish develops and whether it brings any benefits remains to be seen.
The cod industry can hope that cost reduction will bring them closer to profitability and eventually if production rises, the economies of scale may reduce the cost differential but whilst wild cod stocks continue to improve, the one and only solution is to be found in the marketplace and oddly enough it is the exact opposite strategy to that found in salmon farming.
This week an article in the Guardian newspaper reported that despite its problems, the cod farming industry hopes that it can become as big as salmon farming is today. The sale director of one cod farming company said that ‘Twenty years ago I heard a researcher say that the Norwegian salmon industry could never produce more than 10,000 tonnes and now we are at more than 700,000 tonnes.’ Ignoring the fact that exactly twenty years ago even Scotland was producing nearly 30,000 tonnes and at the same time accusing Norway of over-production, what the salmon industry has achieved is not the model that the cod farming industry should be following, that is unless there is an unexpected and total collapse of wild cod stocks!
Tuna lasagne: According to IntraFish, the Danish aquaculture newspaper Dansk Akvakultur reported from the general meeting of the Federation of European Aquaculture Producers (FEAP) that there was concern about the increasing levels of fish from outside the European Union. Interestingly, the greatest concern was about eels from China, Turkish sea bass and bream and pangasius from Vietnam yet little was said about the huge tide of Alaskan Pollock and Pacific salmon. Whilst aquaculture producers may feel threatened by imported farmed fish, most consumers do not make any such distinction and see fish as being just fish, irrespective of how it was produced or caught. Clearly, purchases of pollock mean that consumers are just as unlikely to buy European produced fish as if they bought pangasius instead. Rather than worrying about imports, producers should be actively promoting the benefits of buying and eating locally produced fish and seafood.
Whilst there are a number of issues arising from this subject, the one that caught our eye was the way that Norwegian concerns about pangasius imports have been turned around and presented as an advantage. Trond Davidsen of the Norwegian Seafood Federation has said that the rising popularity for pangasius has not originated from the existing consumer market. Instead, pangasius has been bought by completely new customers who would normally pass right by the fish counter. This is a really nice idea but one which we believe has little credence.
What Mr Davidsen seems to be saying is that potential consumers who never visit the fish counter, let alone buy any fish from it, hear that there is a new fish available which is competitively priced so they go to investigate and decide to buy it. We doubt it very much. Most shoppers who avoid the fish counter do so because they simply don’t buy fresh fish and of all the factors that stop them from doing so, price is one of the least important. There are many reasons why consumers do not buy fresh fish but cost is not one of them.
It is only necessary to visit the discount supermarkets to see the range of fish that they stock to better understand the motivation for fish purchase. A typical shopper at Aldi, Lidl or Netto is likely to be watching the pennies and whilst these stores offer a reasonable choice of foods, their range of fish is poor and is dominated by coated and other processed products. There is a very limited choice of frozen natural fish, mainly pollock and salmon. Oddly enough, pangasius has only made a very brief appearance in these discount stores where its low cost might be expected to make it extremely attractive to shoppers.
There is no doubt that pangasius has made an impact on the European market, but we at Callander McDowell believe that there are a number of reasons why this is. We believe that in countries such as the Netherlands, panagsius has been extremely popular amongst the ethnic communities who are already familiar with the fish whilst in Spain consumption has soared because it is a low cost alternative. Certainly many of the tourist restaurants along the Mediterranean coast are substituting pangasius in their existing menus in order to keep costs down.
In the UK, pangasius is cheaper but demand has not grown as much as might be expected during the economic downturn. This is because cod and haddock are still competitively priced, and as we have already explained, are readily discounted. Even in the frozen sector, pangasius has failed to really make an impact.
Mr Davidsen also suggests that the price of pangasius is so low that it has become part of the student diet as a change from chicken. Again, we are not convinced. Firstly, it is still possible to buy chicken breast cheaper than pangasius and other cuts even cheaper still. Chicken is always popular because of its versatility and whilst students in different countries may have different eating habits and cooking skills, most students are more likely to get their fish input from tinned tuna than any fresh fish. Tuna lasagne is still a favourite student staple recipe. We have yet to hear of panga lasagne!. Mr Davidsen thinks that once these students start buying pangasius then they will eventually widen their choice to include Norwegian caught fish such as cod.
Mr Daviddsen is worried by pangasius imports because he believes that consumers will be tempted away from cod by its low price. Given that cod can be bought cheaper than pangasius, he should consider the real problem is that the large processors are producing new ranges made with all sorts of different fish, in fact anything but cod. It is these processors who Mr Davidsen needs to convince about the merits of returning to cod rather than worry about the import of some Vietnamese fish.