reLAKSation 87.

Banking on China!: British TV regularly carries a commercial for the HBSC bank, which takes a light-hearted view of the many differing local customs between countries. The message is that local knowledge of its customers ensures that it provides the right banking products for individual customers. It makes sense that although we operate in a global marketplace, there can be huge differences in local market requirements.

Intrafish report that despite its vast market potential, China is struggling to take off as a major customer for salmon. Norwegian exports of salmon to China and Hong Kong have yet to reach 2,500 tonnes this year with only 817 tonnes actually going to China. This is far below expectation, especially if all of China’s 1.3 billion inhabitants were to eat a single fillet of salmon, it would consume over twice the current world production. Of course, such expectations are unrealistic.

Thirteen years ago, export adviser F W Mowinckel posed the question as to whether any company had made a profit by exporting to China? The suggestion is that the economics are not yet favourable for profitable business, however, in the case of salmon exports, we at Callander McDowell; believe that other factors may have more bearing.

It is true that the Chinese have a preponderance for eating fish and therefore there should be an enormous opportunity to export salmon to China. However, the Chinese people are influenced by local custom that any fish consumed must be as fresh as possible. The most effective measure of freshness is that the fish be alive until it is cooked. With salmon, this is simply impossible and as there is so much other choice for fish, demand for dead imported salmon fillet, however cheap, will remain extremely low. It is unlikely that this local custom for eating fresh fish can be overridden, however much promotion work is undertaken.

When China was first mooted as a target for salmon exports, it was suggested that the first sales should be aimed at the major hotel chains. It is likely that this is still the main target market for salmon exports and responsible for current levels of consumption.

The HSBC bank have highlighted that local customs can play an important part in global business and that this is something that companies must consider if they wish to develop international trade.

Burnt fingers: Intrafish report that most financial analysts are now shying away from shares in fish farming companies. If asked, their view is to sell, especially in those companies that have taken the biggest falls.

This is not in the least surprising since some investors will have made significant losses as the share prices fell. The problem for these leading fish farming companies which have staked their future on the stock market is that the only measure of whether they are successful that analysts and pundits are able to rely on is the market price of salmon. As everyone knows, salmon prices have fallen and have yet, if at all, to recover and thus share prices have also fallen, resulting in these big losses.

The only way that the performance of these salmon farming companies can escape from being measured by salmon prices alone is to persuade investors that there are other more relevant and better operational indicators. This will only happen if the companies can demonstrate that they are able to regain lost margin elsewhere. The first step would be to focus on a much more market-led strategy than the production-led strategies currently undertaken. This would mean that the production companies start to focus more on what happens to the raw flesh after harvest as well as before it.

Kippered!: Is it not a co-incidence that the person who brought the little known law concerning the labelling of farmed salmon to the attention of the Department of Agriculture was actually a fisherman? It certainly brings to question his motivation for doing so, especially as some fishermen perceive that aquaculture is undermining fishermen’s livelihoods. Is it not only co-incidence that once this little known law has been publicised, then there is a sudden rush to sue, with allegations of consumer fraud against three major supermarket chains. According to Intrafish, the counsel for law firm Smith & Lowney who filed the complaint said it was about deception as the plaintiffs were all duped, not only for thinking they were buying wild salmon, but also for paying an inflated price for it.

This complaint raises a number of issues, not least that if it were such a major deception, it is surprising that the Department of Agriculture’s food safety division were unaware of the law, let alone the supermarkets concerned. It might have been considered to be a fraud had both the department informed the supermarkets of the need to label and then the supermarkets had conspired not to do so. Ignorance of the law is no excuse, but in this case the supermarkets should have been warned that they were breaking the law and given an opportunity to ensure that they followed the legislation, before these so called duped consumers rushed to sue.

However, this complaint raises a much wider issue as to whether farmed salmon is artificially coloured at all?

In the UK, both supermarkets and independent fishmongers sell bright yellow fish fillets. These are either smoked cod or smoked haddock and they are clearly not the natural colour of the fish. Equally, they are not the result of the smoking process as consumers can also buy smoked cod and haddock, which is not so yellow in colour. The colour is actually added to the brining solution in which the fish fillets are soaked so that the normally white fillets are dyed yellow. There is no question as to whether these fish are artificially coloured.

By comparison, farmed salmon are fed a nature identical pigment in their feed. The pigment is transported through the natural digestion process and selectively deposited into those parts of the body, which naturally absorbs such feed elements from the food the fish eats. The resultant flesh is not dyed but naturally pigmented. Other animals, such as flamingos adopt the same process for without the natural feed elements, flamingos turn white.

In the wild, salmon take up this pigment from such food items as shrimp and other micro-organisms. Farmers simply provide the same feed elements in the feed. This is not the same as artificially coloured.

The issue will become even more confused for those farmers who feed their salmon on natural colourants such as shrimp meal or yeast. Can these fish be said to be artificially coloured? What about organically farmed salmon?

The plaintiffs may feel now that they have been duped, but they have clearly come to no harm. Equally, it is unlikely that they have bought so much salmon that they have experienced any financial loss? Are their concerns extended to other farm produce, such as eggs? Or is this case really just about trying to do as much damage as possible to the salmon farming industry?

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