reLAKSation 57. 

Rumours: This latest dumping action has prompted the circulation of a number of different rumours throughout the salmon industry. This is because there is very little hard fact but a great deal of conjecture. Perhaps, this might not have to be the case if the people behind these accusations would be men enough to stand up and identify themselves. Equally, if these anonymous people were confident about their accusations, then they should share them with the rest of the international industry for everyone to judge.

The European Salmon Producers Group, which is behind the accusations, appears to be unknown before now. It is probable that the Group was established with the sole purpose of instigating this dumping case. However, their name implies that they must have some association with part of the Scottish Salmon Producers Organisation, as it is unlikely to have a separate European organisation from that in Scotland. Certainly, the ease with which the European Commission accepted this new group would suggest that at least some of their members were already well known to the investigators in DG Trade. Perhaps it is only a minority of one of the existing PO’s who were determined to pursue the dumping case and this is why they had to establish this new organisation to make it happen.

Rumours also abound that it was Norwegian industry, upset at the limitations placed on their own exports whilst those from Chile could enter the European market with ease, which is ‘behind’ the dumping action. According to IntraFish, representatives in both Norway, as well as in Chile, have denied any involvement. Certainly, it would seem unlikely that the Norwegian industry, which continues to be subjected to the fallout from the last dumping action, would resort to a similar action. Equally, it makes no sense for another third party country to promote such an action within the EU as they would have little to gain by forcing further limitations on the market.

Instead, it is most likely, as Rodrigo Infante told IntraFish, that the action has been instigated by a core group of Scottish and Irish, although we think mostly Scottish, who are “driven by protectionist ideals”.        

This latest dumping accusation has “come out of the blue”. There has been little build up of claim and counterclaim and with imports of only eight thousand tonnes of frozen salmon, there can have been little overall impact on the marketplace. There has been even less discussion about imports from the Faeroe Islands, whose total production is probably smaller than that of the largest farming companies.

One possible reason for this sudden focus on imports from both Chile and the Faeroes concerns the termination or the renewal of the EU salmon agreement with Norway. Discussions earlier this year between Norway and the EU proved inconclusive, which could lead to the view that the agreement should be terminated or be diluted to ease import restrictions on salmon from Norway. This would not please those whose ideas of a marketing strategy are “driven by protectionist ideals”. What better way to impose a “protectionist ring fence” around Europe by focusing attention on all potential suppliers to the European market by bringing another dumping case. Certainly, DG Trade might not be so amenable to the removal or amendment of the EU salmon agreement if other countries were accused of dumping too.

It is a shame that this “protectionist” minority are so keen to impose their ideals on all the industry. Perhaps, if they invested the time and effort that they have used to persuade the EU to participate in their ideals, in developing a realistic market-led strategy, then they may have discovered that there are other ways towards a profitable future. This is maybe why they are so reluctant to stand up and argue their cause. They know this is an argument they cannot and must not win.

Environmental emphasis!: The latest survey of public attitudes towards the environment and the quality of life shows that the majority of people rate the protection of the environment as being more important than the provision of jobs. The findings of a study conducted on behalf of the Department for the Environment, Food and Rural Affairs found that 55% of respondents felt that prices and jobs are not as important as protecting the environment, whilst only 30% thought jobs more important. IntraFish comments that the Scottish salmon industry has always made much of the fact that they provide jobs in some of the country’s most fragile communities. This does not bode well for the Scottish salmon producers.

Yet, we at Callander McDowell believe that this survey should not be given too much credence. This is because they can be misleading as they often rely on fixed response answers ands allow for no personal expression. One example is that within this survey 59% of respondents expressed concern about the effects of livestock production methods. This has risen from 33% in a previous survey in 1997, which may have been prompted by the recent outbreaks of BSE and Foot and Mouth.

However, this high level of concern is not reflected in consumer buying choices. Only this week, a letter in the Guardian newspaper expressed unease about consumer choice. This quoted the case of the British pig industry, which is the only European industry to outlaw tethers and stalls, which are still widely used throughout the rest of the world. This makes British pig meat much more expensive, but answers the demands for better standards of welfare. The result of these better standards is that demand has risen for cheaper imported pig meat. Clearly, what the consumer says is not reflected in what the consumer does.

Despite the outcome of these findings, the Scottish salmon is already committed to protecting the environment. This is in response to the continued criticism from one or two outspoken members of the environmental lobby. Whilst it is undoubtedly important to ensure the highest possible environmental quality, if just for the welfare of the salmon, the importance to the consumer may well be disproportionate to the lobbyist’s voice. 

but Halibut?: We, at Callander McDowell, are passionate advocates of aquaculture and would argue that farmed fish can make a viable alternative to wild caught supplies. However, any attempt at farming must also be commercially viable and thus any evaluation of the potential market must be conducted before any fish are put to sea.

In recent years, there has been a great deal of research into the potential for farming marine species. Turbot, halibut and now cod have been put forward as candidate species and increasing investment has been made to establish commercial farming units for these species.

Marine Harvest has recently announced that they are to seek permission to expand production of halibut in the Western Isles from an estimated 190 tonnes this year to 680 tonnes by 2007. Other farming companies in both Scotland and Norway are also stepping up production. Yet, however welcome this expansion in terms of development of the aquaculture industry there must also be some concern about who will buy these fish.

The current dumping action against Chile and the Faeroes is a vivid example from an industry, which previously placed all the emphasis on production and little consideration was given to the marketplace. The pioneering salmon industry was always ready to stress how much it received for its fish, giving encouragement to others to follow suit. Only when prices fell in response to rapidly expanding production, did anyone give a thought to the marketplace. Ten years on, some sections of the salmon industry are still reluctant to look at the market issues preferring to focus on those relating to production.

Could we see a similar problem in the halibut market? The answer is that we could. IntraFish report that the wild catch of Atlantic halibut is only 4,000 tonnes a year, although the cheaper Pacific and Greenland halibut boost the overall catch. The most important market is in the UK with British consumers taking about 25% of world catch. Despite this demand, it is surprising to learn that British imports amounted to only 230 tonnes in the year 2000. This means that future planned production could soon push demand over existing levels.

IntraFish quote Mike Thomson of Marine Harvest, who said that the future for halibut is bright as it has been well received by both top outlets such as Marks & Spencer and by the consumer. He indicated that the retail value could be as much as £40/kg. Yet, we would question how much of any future production could be sold at such high prices.

Certainly, Atlantic halibut are available at £40/kg in the UK market, however fish at this price are only available at Selfridges, which is not really where people do their everyday shopping. By comparison, fresh halibut is available on fresh fish counters of leading supermarkets at between £13.99/kg and £19.99/kg. Chilled packs are also available in Tesco under their Finest label at £24.99/kg and Marks & Spencer at £23.99/kg for halibut steaks. Marks & Spencer are the only store to currently declare that their halibut fillets are farmed in Scotland and these are priced at £36/kg, however since their launch they have been discounted to £27/kg.

Halibut has always had a place in the UK market, but demand has matched the supply. Any increased availability could upset this balance and force prices downwards. Equally, halibut has not been part of the wider market and there is a risk that even if prices fall, consumers will not respond unless they are encouraged to do so.

Interestingly, Marks & Spencers launched an added value recipe dish featuring halibut however this made only a brief appearance. This suggests that consumer acceptance was extremely poor. By comparison, other dishes in the range are still available in M & S stores. This may be an indication of future consumer interest in fish like halibut.

As passionate advocates of anything to do with aquaculture we would be very disappointed if halibut farming is not successful, however, at the same time, we do believe that the aquaculture industry must offer consumers with what they want, not what we think they want.

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