reLAKSation 71.
Dump the Dumpers:
According to Intrafish, DG Trade at the European Commission have finally seen
sense and decided to drop the dumping complaint against salmon farmers from
Chile, the Faeroes and Norway. Hopefully, this will bring these pointless and
unnecessary dumping complaints to an end, once and for all. Ever since 1989, the
international industry has been living under the threat of recurring dumping
complaints, simply because some producers have been unwilling to compete fairly
in the international marketplace. They have tried to force their view of salmon
production on the rest of the industry instead of adapting to the changing needs
of the marketplace. We are only sorry that it has taken the Commission this long
to recognise that the salmon farming industry has had no case to answer.
The underlying issue, as regards these
accusations of dumping, has little to do with dumping at all. Instead, it
concerns the image salmon holds in the marketplace. The pioneers of salmon
farming selected salmon as a candidate species because it of its perceived
luxury image. This was related to its relative rarity value in the marketplace.
However, the fact that salmon could be farmed undermined this market image by
diluting the one single factor, which made it attractive to farm. As production
increased, salmon became widely available. Consumers were no longer willing to
pay a high price for something, which had become an everyday food.
Unfortunately, some producers have had
such a high regard for their own salmon that they are convinced that consumers
should be prepared to pay a premium price. Since 1989, when prices first
collapsed, they have tried to generate a price differential between their own
and other salmon. Despite continual failure to sustain any price differential,
the Scottish salmon industry is even now conducting a three-year £2.5million
project to encourage consumers to pay up to 10% more for their salmon. However,
as our retail survey, which will appear in January, will show, this has not
happened. Consumers are more concerned about value for money than premium
pricing. Although we acknowledge that those involved in this project may not be
the same people that have pursued the dumping complaint, it is this failure to
generate a premium price for Scottish salmon, which is the root problem of the
dumping complaints.
The problem is that the Scottish
industry has disregarded the market and has tried to impose its own view onto
consumers. The marketplace has changed. Salmon is no longer a luxury food and
promoting it as such is a waste of time. Instead, salmon producers need to be
reacting to what the consumer wants and developing the type of products that
consumers really want to buy. This is the real challenge for the salmon industry
as we enter into 2003 and one to which we hope the industry will respond.
Dumping complaints have been simply an
excuse for poor marketing and we now hope that the end of this dumping action
brings this chapter of industry development firmly to a close.
Margin for error:
Previous dumping complaints have uncovered some evidence of dumping margins.
These have been used as conclusive proof that other producers have been dumping
salmon into the marketplace. Sadly, investigators have failed to understand that
dumping margins are a natural artefact of commercial salmon production and will
always be present, even in those countries which have lodged the accusations.
Salmon farming involves a long
production cycle, which is temperature dependent. In addition salmon can suffer
from early maturity and all these factors can affect the economics of
production. The type of spot investigations used in these dumping complaints
does not take all these factors into account and can present an erroneous
outcome to any investigation, on which the complainants expect to capitalise.
Hopefully, the European Commission have
now recognised the realities of the salmon industry and will consign any further
complaints directly into the waste bin.
Snip the MIP: The
Norwegian Ambassador to the European Union, Bjorn Grydeland, is reported to have
said that the European Commission intend to cancel the salmon agreement and end
the MIP.
The termination of the Minimum Import
Price is not only long overdue the MIP should never have been implemented in the
first place. The MIP was imposed in response to dumping allegations, but has
served little purpose. Its demise is welcome as is the possibility of free
trade. We, at Callander McDowell would repeat previous observations that at a
time when the EU has had to reduce whitefish quotas, farmed salmon is a
realistic value for money alternative. The fact that salmon are farmed should
reduce the fishing pressure on all threatened stocks, permitting more time for
stocks to recover. The salmon farming industry should now recognise this
opportunity and focus on providing the fish that consumers want.