The Sky’s the Limit: According to IntraFish, Marine Harvest have just recorded record figures for a quarter marked by strong salmon prices. Presenting the results, CEO Alf-Helge Aarskog said that the ‘Sky is the limit of demand’. This comes as no surprise for us, at Callander McDowell. As far back as 1989, we argued that demand is not the limiting factor on the growth of the salmon industry. It is just having the right vision. Few working in the industry now will remember the beginnings of ‘trade war’ between Norway and Europe when European producers accused Norway of cheaply dumping salmon into the European market because they were over-producing in excess of market demand. It is hard to believe given current word production but the Scottish industry were producing just under 30,000 tonnes. Today, this would hardly register on the world stage. The problem was not over-production but rather as we described it at the time – under-marketing.

Now Alf-Helge Aarskog has said that the sky’s the limit is about building new products and getting them into the grocery stores. He said that there are plenty of opportunities in Europe, Asia and also the US. We totally agree. There are unlimited opportunities with the right approach. We have always believed this but the industry has been very slow to grasp the nettle. To some extent, this has been understandable because in the past the industry has suffered recurring interruption whether it be trade wars or disease outbreaks. This caused prices to oscillate to the point when it was claimed the industry was exhibiting price cycles that limited development. In recent years, prices have maintained a high level so that the idea of price cycles are now history.

High prices bring their own problems, especially when pursuing development of new added value products. The cost of raw material and the cost of manufacture means that such products can be completely priced out of the market place. The French smoking industry is currently complaining that they cannot make their products at a cost which is acceptable to consumers. It is not surprising demand in the traditional European markets might be showing signs of decline again. At the moment, this is not an issue of the industry because demand is strong elsewhere with consumers who are willing to dig deep into their pockets.  Whether this will continue remains to be seen.

Our view is that the sky is the limit but maybe not at any price. Meanwhile, we shall be continuing our observations of the retail sector both in the UK and in France in the run up to Christmas.

 

Which is it?: According to the Sunday Herald, the Scottish Government has come under fire for ‘grossly inflating’ the number of wild salmon in rivers along Scotland’s west coast. Experts say that Government scientists have over-estimated salmon populations in some rivers by 10 times and are demanding that the estimates and their related conservation measures are revised. The Scottish Government have recently published new higher estimates of wild salmon numbers so that conservation rules for 57 west coast rivers and fishery districts have been relaxed enabling more fish to be taken.

Salmon and Trout Conservation Scotland commissioned Professor Colin Adams of Glasgow University to review the data and he concluded that the estimates are flawed and should be treated with ‘considerable caution’. He said that there is little doubt that the assumptions and simplifications used combined with a lack of empirical data have resulted in estimates of salmon abundances which differ significantly from the reality in several rivers. His review is available at http://www.salmon-trout.org/uploads/file/Adams%20-%20Estimating%20returning%20adult%20salmon%20population%20size.pdf

The Sunday Herald reports that a fish counter in the River Morar recorded 500 fish which is a third of the Government’s estimate. An in-river survey using snorkels by the Argyll Fisheries Trust found 30 salmon in an unnamed river that the Government estimated should have 1,500 fish. The Trust compared their data for several rivers with that from the Government and found that the Government had over-estimated the number of salmon present by up to a factor of ten. The Trust said that grossly inflating salmon numbers risks setting back local conservation efforts such as catch and release.

When the Scottish Government first introduced Conservation Limits to Scottish rivers, there was an outcry that they had been too cautious in many rivers and the low grades would deter many anglers compromising the viability of the fishing in the years to come. As the Sunday Herald points out that 57 west coast rivers and fishery districts have been upgraded this year and now the angling fraternity are complaining that the Government’s limits are too lax.

Of course, just because the Government have upgraded the conservation status of some rivers does not mean that anglers have to kill the fish they catch. They can still return them to breed and help replenish the stock. Salmon and Trout Conservation Scotland, in line with the conservation image created by their name’ could simply issue a recommendation to their members and other anglers that all west coast salmon and sea trout should be returned to conserve stocks. Instead, they chose to commission an expert report to dispute the Scottish Government’s recommendations.

The reason why they opted to dispute the Scottish Government’s figures is made clear by the Sunday Herald. The newspaper says that fisheries experts fears that fish farmers could seize on the exaggerated numbers to justify plans to double the size of their business by 2030. The chairman of the Wester Ross Salmon Fishery Board told the Herald that the highly questionable re-categorisation of many of these rivers will serve as a green light for the farming industry to push for unjustifiable expansion.

The newspaper says that anglers blame pests and diseases from salmon farms for decimating wild stocks though they also say that this is disputed by the industry. We, at Callander McDowell, cannot speak for the industry but we certainly dispute the angler’s claims. Our new study clearly shows that fish stocks along the west coast were in difficulty long before salmon farming became established. Unfortunately, Salmon & Trout Conservation Scotland have failed to acknowledge our repeated requests to discuss the findings with them. They prefer to blame the salmon farming industry than address the real problems affecting west coast salmon and sea trout stocks.

Meanwhile, the apparent recovery in west coast stocks implied by the changes in river grades is not giving the aquaculture industry the green light to expand as the anglers suggest. The aquaculture industry will expand regardless of the re-categorisation of the salmon rivers simply because the two are unconnected.

 

GSI heads south: In the last reLAKSation, we discussed how, having established the ASC as a gold standard, WWF in Australia have been working with salmon farming partners and allowing their panda logo to be used on packs of salmon. This gives the appearance that WWF are unwilling to relinquish control over the future direction of the salmon farming industry. We also mentioned their involvement in the Global Salmon Initiative, which the WWF also helped establish with the intention of being a model of all food production. Last month, GSI organised a seminar at the Aqua Sur conference in Chile which they titled ‘Shaping the Future’. The short programme included a presentation from WWF Chile. This was included in the session ‘what the industry needs to and can do in order to realise the future potential’.

There was also a presentation from Avrim Lazar of GSI about what the GSI are planning to do to realise the future potential. What opportunities and challenges lie ahead?

Unfortunately, we won’t know the answer because GSI have only made three of the six presentations available on their website – http://globalsalmoninitiative.org/events/aquasur-2016-gsi-sustainability-seminar/ and the GSI presentation is not one of them. The presentation from WWF can be downoaded but is more about local issues in Chile rather than the wider goals of either WWF or GSI.

All the presentations available are somewhat generalised, however the one that attracted our attention was given by Gorjan Nikolik of Rabobank who spoke about why sustainability should be the main advantage of aquaculture.  His presentation was titled ‘can sustainability become the key strength of the salmon farming industry?’ It is available at http://globalsalmoninitiative.org/wp-content/uploads/2016/11/AquaSur-Rabobank-2016.pdf

Mr Nikolik began the presentation by asking why the salmon industry is such a good target for activists? This is of interest to us because we considered a similar question in a presentation at the recent SeaFish Humber Seafood Summit.

Gorjan Nikolik gives three reasons in response to the question he posed. These are:

Salmon consumption occurs mainly in developed countries

Salmon is a premium product at the top of the price range

and

The market is supplied by large listed and corporate companies not back yard and small-holding farmers.

He sums up these points by saying that standards and expectations are higher for a protein that is consumed by wealthy consumers and that the sustainability must match the marketing position but doesn’t seem to do so.

We, at Callander McDowell, can understand Mr Nikolik’s reasoning in highlighting these points but we don’t agree with them. His view may well be why WWF target the large companies supplying developed market with ‘premium’ products since they are more aware of their corporate image and are likely to have significant sums available to help them realign to the WWF’s vision of sustainability but it isn’t why activists target the marine environment and especially the salmon farming industry.

We have written before now concerning the changes that brought about increased environmental issues relating to the seas and oceans. The catalyst for change was the fall of the Berlin Wall. Prior to this all the activists were concerned about nuclear disarmament but when the wall fell, many of the environmental activists found that they no longer had a cause but found one in the seas. We went from nuclear proliferation to a proliferation of groups with a focus on the marine environment.

One of the early targets was the salmon farming industry. This might not have been perceived to be an obvious choice especially as in the early days, aquaculture was seen as a green activity helping offset the damage caused by over-fishing. Some very large corporations, such as Unilever and BP, got involved in aquaculture because it countered their industrial activities. This emerging aquaculture is unlikely to have attracted the attention of the new wave of environmentalists. Something else encouraged the environmental sector to focus on salmon farming like moths to a lightbulb.

This was the de-marketing campaign, later identified by Canadian Vivian Krause, initiated by some of the big charitable foundations to try to encourage consumers to buy US wild caught fish rather than imported farmed salmon. The foundations funded a network of environmental groups with many million dollars to spread negative message about the harmful effects of buying farmed salmon on both the environment and on human health. These groups did a good job, not as originally tasked because consumers totally ignored their message, but they ensured that the wider environmental sector picked up on the negative impacts, many heightened beyond reality, and became ingrained in environmental culture. This is why salmon farming continues to attract the attention of the environmental sector even today. It is likely that groups are still being funded by the charitable foundations to try to limit the perceived impacts of salmon farming even today. After all, someone paid to help the WWF establish the ASC and as we have seen in Australia, it seems that the requirements of the ASC are not enough for them.

We certainly disagree that activism is just aimed at the wealthy, the developed countries and premium products. The environmental sector also attacked the actions of the fledgling shrimp industry that became established in many developing countries. Subsistence farmers dug up mangroves to make shrimp ponds in the hope of making money to help bring their families out of poverty and received a great deal criticism by doing so. Of course, the shrimp industry has changed since then as have other aquaculture enterprises.

We already mentioned that Mr Nikolik said that sustainability must match the market position but doesn’t seem to do so. Given that this presentation was made to participants in a GSI seminar, we were surprised to see an example of such a mismatch included in the slides.

Mr Nikolik includes an example of how to communicate the salmon sustainability message to the general public. He showed a TV ad made by the Dutch retailer Albert Heijn about their sustainable salmon. Albert Heijn were one of the first retailers to commit to using the ASC logo on their fish products including salmon.  It is now over a year since the retailer committed to selling only ASC certified salmon as reported by IntraFish. They said in a report from June 2015 that this commitment comes at the end of a five-year collaboration between the retailer and the WWF. Elies Arps, senior adviser for markets at WWF told IntraFish that the World Wildlife Fund is very happy that Albert Heijn, one of the Netherland’s biggest sellers of fish, accepts its responsibility.

Mr Nikolik writes in his presentation that salmon farming has a few excellent features such as low FCR, high edible protein, low greenhouse emissions, fresh water efficacy, but these are not easy to communicate to the public. Albert Heijn has recently launched a TV ad that summarises the key traits of salmon farming focussing on the pristine environment where they are farmed. The link provided does not work so the video can be viewed at   https://www.youtube.com/watch?v=Lj9jlclr1w8  It is in English with Dutch subtitles.

During the ad, a commentator asks ‘Everything is sustainable?’ The answer is ‘100%- that is very important’ as words on the screen state ‘The largest selection of responsible fish’. Yet despite Albert Heijn’s commitment to ASC, the logo is not displayed although the Albert Heijn logo with the words’ Everybody Appie’ is. In fact, no mention of the ASC is made at all.

Perhaps five years in partnership with the WWF is just not enough because as Mr Nikolik says, communicating sustainable salmon to the public is not easy.