reLAKSation 91.
What else can we do?: Members of the European Salmon Producers Group, who initiated the last dumping action against the Norwegian salmon industry have voiced opposition to the free trade of salmon. They are unhappy with the Commission’s decision to terminate the salmon agreement and lift punitive duties on imported salmon. We, at Callander McDowell, had thought that this was one chapter of the salmon industry’s development that had been consigned to history, however Angus Macmillan of West Minch salmon and the sales company Hebrides Harvest told Fiskaren that ‘we have not heard the last of it.’
Intrafish reported that Mr Macmillan’s colleague in the ESPG, Angus Grains of The Shetland Salmon Group said that the day that the Minimum Import Price is lifted , the Norwegian industry will start to liquidate their salmon stocks and this will force prices down further. He went on to suggest that the industry on both sides of the North Sea will go to rack and ruin.
Mr Grains realises that the European Commission no longer want the salmon agreement, but when asked about an alternative proposal, he can only suggest that all producers agree to some form of production control. He added ‘what else can we do?’
In a recent interview with Intrafish, Alte Eide, the new CEO of Panfish argued that most of the past problems experienced by the industry have been self-inflicted. We would whole-heartedly agree. We see that the fundamental problem is that some sections of the industry have failed to accept that the salmon’s market image has evolved with the increased global production. Rather than adapt to this changed image, they have fought to retain their perceived view of what salmon should be. Unfortunately, production control will not solve this problem, but can only lead to further market disruption.
The only solution open to the international industry is to fully embrace this new market image rather than fight against it. Yes, prices are low, but the international industry should not be surprised that they are. Low prices were inevitable from the minute that they first collapsed back in 1989, but few planned far enough ahead to capitalise on the predicted changes.
There is only one single change which can have a profound enough effect on the future of the salmon farming industry. This is the recognition that the industry needs to move away from the outdated production-led strategies to those which are market-led. In a nutshell, the industry needs to produce what the markets actually want, not what it thinks that the market wants.
Two different things: It is understandable that the Scottish producers, for example, would want to resist such changes to the industry since market research has shown that not only do consumers prefer to buy Scottish salmon, but they are also willing to pay more for it (The Grocer. 9th March 1996. Page 38.) Unfortunately, whilst consumers have expressed this willingness to pay more for Scottish salmon, when faced with a choice, they actually opt for value for money. A similar survey, conducted by leading supermarket Tesco showed that 69% of Tesco customers would prefer to buy Scottish salmon even if it were more expensive. Crucially, Claire Evans of Tesco expressed concern that their customers would stick to this view in reality (Scottish Fish Farmer. Conference hears an update on supermarket policy No 110. December 1997. Page 11.)
[Readers interested to learn more of this viewpoint should keep a watch on our website where we shall shortly publish our response document to the Strategic Framework.]
Tesco’s Claire Evans appears to be right in her view that what consumers say and what they do may be two different things. This appears to be borne out by the continued complaints that cheaper salmon is being imported into Europe. However, if the various market research was correct, then consumers would still actively select higher priced Scottish salmon irrespective of the presence of cheaper imported fish. After-all, selling fish at a higher price, implies that cheaper fish must also be available in the marketplace. Consumers are clearly attracted by the lower price and are selecting value for money salmon in favour of more expensive Scottish fish. Clearly, any willingness to pay more for Scottish salmon is rejected when faced with a choice.
The trouble is that whilst market research is an essential part of any marketing activity, it can easily be manipulated to support an existing strategy. Even the most simple questions can produce misleading results and this is because questions are often structured in the form of multiple choice. So the question ‘Do you prefer Scottish salmon?’ will produce a very different result to that ‘Which salmon do you prefer to buy?’ without providing any specific answer. Market researchers find it much easier to process such multiple choice questions, but use of just such results can lead to a distorted picture of consumer choice.
It is not just the salmon industry that can be misled by such simplified market research. The Guardian has just completed a three part investigation of the food industry. They commissioned ICM to conduct a telephone survey of 1006 adults to solicit their views on the health and safety of the food we eat. They found that 45% of Britons are concerned about how healthy the food they eat is but they did not bother to find out whether these consumers had been concerned about this issue before being asked the question. Clearly, the fact that the Government is concerned that many consumers do not eat an healthy diet shows that they do not. This survey also concluded that many Britons no longer know how to cook, based on one single question. This was ‘do you know how long it takes to soft boil an egg? And giving the choice of answers 1 minute, 2-3 minutes, 4-5 minutes, 6-10 minutes. 66% of respondents chose 2-3 minutes, yet this really only indicates that these respondents do not know how long to soft boil an egg, not that they cannot cook at all.
The difficulty in seeking consumers’ views is apparent from the May issue of Fish Farming Today, who took to the streets of Edinburgh to learn more of people’s attitudes to farmed salmon. The paper admits that the survey was not scientific and therefore would probably not hold water due to the number of people interviewed, and certainly we would not aim to criticise, but it is interesting as to how pre-prepared questions can produce misleading results.
Fish Farming Today say that a few conclusions immediately stood out from their mini survey. These were that people like salmon and that the majority would eat salmon once a week and almost everyone said that they would prefer to buy Scottish salmon, although they did not have any definite plans to do so.
The paper highlighted responses from 10 different people, although we understand more were interviewed. Even though, it is unclear whether the report includes all their responses, we at Callander McDowell, do not arrive at the same conclusions as that deduced by the newspaper. Of the 10 people interviewed only one regularly buys fresh salmon. This person would prefer to buy Scottish, but country of origin does not actually influence her buying decision.
Three interviewees said that they only buy tinned salmon, yet each said that the Scottish origin is important to them as were appearance and taste. Yet, these answers make little sense in relation to products which are available in the marketplace. British consumers do have a predilection for canned salmon and as a result, the UK imports over 24,000 tonnes of timed salmon from North America. This is widely available in all British stores. By comparison, only a tiny amount of farmed Scottish salmon ends up in tins and it is highly unlikely that this random 30% of interviewees actually buy just this product. The fact is that these consumers were simply responding to questions which actually did not apply to the product that they buy.
Of the remaining 6 interviewees, three never eat salmon, one occasionally eats smoked salmon and the other eats salmon in ready meals. Most said that it was important that the salmon is Scottish even if they do not actually eat it, but this is not surprising since the interviews were conducted in the heart of the Scottish capital.
Finally, one of those interviewed said that he didn’t eat salmon because it made him “loopy”. He said it took him ages to narrow this down to eating salmon and he thought that it might have something to do with the chemicals. He didn’t think that this reaction occurred irrespective as to whether the fish he ate were either wild or farmed fish, but he went onto explain that he also gets this strange reaction when he eats frozen ready meal or drinks red wine. He just doesn’t know and neither do we!!!