Seafood industry shake-up begs question: who's the skipper?

Scotland is among the largest sea fishing nations in Europe, with 66% of landings into the UK worth some £400m. Our seafood industry employs more than 17,000 people.

Fish and shellfish are Scotland's top exports, accounting for about half of all Scottish food exports. The global market for Scottish farmed salmon alone is now worth £382m.

Shellfish contributes £160m to the Scottish economy, with langoustine contributing £104m of that. Scotland is the third largest salmon producer in the world, with around 90% of the UK fish farming industry based here. Salmon farming has become the single most important economic development in the Highlands and Islands over the past 30 years.

Clearly, there is money to be made from seafood, and recently improved fishing quotas, especially for prawns, reflect this. But while the fish may be truly Scottish, the same is not always true for the companies that produce or process them.

A whopping 94% of the Scottish market is owned by six Norwegian companies, the largest of which is Oslo-based Marine Harvest of Fort William and Edinburgh.

Scottish Seafarms of Stirling is based in Bergen, as is Lakelands Marine farm of Argyll and Sutherland. Lighthouse Caledonia of Cairndow, Argyll, has a head office in Paisley but its parent company is Norwegian.

It closed its processing plant in Stornoway in December but recently secured funds for the Scottish operation from First Mercantile Partners in Edinburgh. Hjaltland of Shetland is also Norwegian, as is Orkney's Mainstream Scotland.

Julie Edgar, of the Scottish Salmon Producers' Organisation, said: "One of the reasons Norway is keen to be in Scotland is that Scottish farmed salmon can command a premium that other countries' salmon cannot.

"The French market is premium for Scotland, and Scottish farmed salmon was the first-ever non-French product to be accredited with the coveted Label Rouge."

The Seafood Company's acquisition of Pinneys, which has a royal warrant and will remain in Annan, will make it the biggest fish processor in the UK, with 40% of the market, and the UK's largest buyer of Scottish farmed salmon. The company mainly supplies M&S and UK supermarkets with chilled seafood products, and now aims to grow by a massive 60% in the next year.

The £100m it currently spends on Scottish white fish and farmed salmon from Shetland will increase to £125m, or 65% of its total purchase.

Managing director Pete Ward, who is based in Grimsby, home to the UK's biggest fish market, said: "There is no problem with supply and though elsewhere demand is stable, we are actually enjoying growth."

West coast langoustines account for £2.5m of the £7.5m worth of Scottish-caught fish purchased each year by Young's Seafood, the branded frozen business of FoodVest, which also owns the Seafood Company. The rest is spent on coley and haddock via its Kilron operation in Fraserburgh.

However, demand for the produce of the smaller independent operators is also increasing. One of these is the family-run Shetland Smokehouse in Buckie, which exports 95% of its smoked salmon to Europe and the US. Managing director Lewis Paterson said: "With Norway and Iceland owning ever bigger fish farms, there will always be a demand for hand-crafted quality."

Sutherland-based Loch Duart Salmon, a private company part-owned by Capricorn, an American fund that deals with the sustainable business, exports 60% of its produce and supplies to restaurants all over the world, including the three Michelin-starred French Laundry in California.

The company is looking to expand by 30% in Uist and recently acquired Salar Smokehouse for this growing part of the business. "There are many ways to farm fish, and consumers increasingly recognise that," said managing director Nick Joy, who is a great advocate of the benefits of staying local.

However, it is not just all about exports. Thanks to increased travel, the cult of the celebrity television chef and the opening of several cooking schools in Scotland, consumption of seafood in Scotland is slowly increasing.

"I've had the busiest start to a year that I can remember in almost a decade, and I'm more optimistic now about the future than I have been for five years," says Stevie Walker, seafood director at Campbell's Prime Meats of Broxburn, which supplies Scotland's top fine-dining restaurants, including Andrew Fairlie at Gleneagles, Chez Roux in Inverness, Martin Wishart of Leith and Cameron House at Loch Lomond, Jeff Bland of Number One at Balmoral in Edinburgh, and the Turnberry Hotel in Ayrshire.

Mr Walker buys most of his seafood direct from Scotland's most northerly market at Scrabster and from Shetland because, he says, the colder waters and the way it is looked after in the boats is simply the best.

In addition, he uses independent brokers at fish markets in Kinlochbervie, Fraserburgh, Peterhead, Aberdeen, Troon and Tarbert. He buys smoked salmon from Hebrides Harvest of Benbecula.

Ultra-freshness is paramount for his upscale clientele, and working this way means he can deliver to a restaurant within two days of a fish being caught.

"I do get offered fish from Norway and Iceland, but I don't buy it," he said. "The Norwegian boats are bigger than ours which means they are longer out at sea. When the fish comes off those boats, it's already been eight days out of the water. Add another two days for it to get to me and that means the fish is 10 days old. It is very well stored on the boat, but it tends to be bought by the big markets like Grimsby."

Mr Walker is looking to export langoustine tails to France. The current euro exchange rate means it is a better time to export than to import. He says Scottish customers ask for the type of prawns they had abroad on holiday without realising they were Scottish in the first place.

But the domestic price of Scottish lobster, langoustines, scallops and crab nevertheless remains stubbornly high because it is dictated by what they can fetch on the Continent.

"If a supplier can get £21 a kilo for langoustine in Spain, he will expect to get it here," says Mr Walker. That is why it tends to be available mostly in fine-dining restaurants and upscale fishmongers rather than supermarkets - which conversely ensures there is enough for export.

However, the current economic downturn means that many European restaurants are closing and demand for our world-famous fruits of the sea is down.

According to Nicki Holmyard, of Scottish Seafood, this means new markets will have to be found - and may yet result in more fresh shellfish landing up on Scottish plates.

Fruits of the sea

Multinational fish farms in Scotland: Marine Harvest. Based in Fort William, its head office is in Oslo. Scottish Seafarms. Its UK base is in Stirling. It is owned by Salmar ASA and Leroy Seafood Group of Norway. Hjaltland is the largest salmon production company in Shetland.

Its HQ is in Norway. Lakelands Marine Farm. Operates in Sutherland and Argyll. Its HQ is in Bergen. Lighthouse Caledonia of Cairndow, Argyll. Its parent company is Norwegian. Mainstream Scotland.Based in Kirkwall, it's part of Norwegian group Cermaq.

Independent fish farms: Loch Duart Salmon of Lairg, Sutherland. Wester Ross Fisheries, Ullapool, Ross-shire. West Minch Salmon, Hebrides Harvest, Benbecula. Uyeasound Salmon Company, Unst, Shetland.

Fish processors: The Seafood Company. The largest fish processer in the UK with 40% of the market. Parent company is Foodvest, based in Grimsby. Young's Seafood. The frozen business of FoodVest, which owns the Seafood Company, buys £7.5m worth of Scottish-caught fish annually.

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