Sector hopes to catch a break as Brexit bites

The reasons are quickly apparent: HMRC data recently published by the SSPO showed that exports of salmon have fallen by 23 per cent, with export sales of whole, fresh salmon down by £168 million in 2020, at £451m.

With farmed salmon Scotland’s number one export food export and demand remaining high both in the UK and overseas, a dramatic reduction in air transport has cut down valuable markets in the US, China and other distant destinations while exports to Europe are hampered by a burden of documentation that the SSPO believes is not fit for purpose.

In short, the ‘new normal’ is not working well enough in a sector for which freshness and delivery in one to two days is a basic and crucial requirement.

“It’s very important to both our customers and consumers and we cannot maximise this under the current system which is affecting the attractiveness of our product,” Scott points out.

“We expected that the impact of the worldwide pandemic would result in figures being down but the big concern is the significant fall in the value of exports and the underlying pressures that the sector is facing,” he says.

“While the opportunity is there for salmon farming in Scotland to be part of the recovery as the worldwide economy emerges from the Covid pandemic we need the right conditions and the right environment in which to operate.

“So we need the support of government and we need regulators to be understanding of our needs as a sector to provide healthy, nutritious food for the international marketplace and the protein that the world needs as the economies of the wider world start to pick up again.”

This sense of urgency is impelled by the dilemma faced by a sector that has 2,500 direct employees in fish farms with are another 10,000 people working in the industry right across Scotland.

Importantly, as Scott highlights, these farms range from the Northern Isles through the north coast and Western Highlands to the Outer Hebrides and Argyll and the Clyde, in rural and island areas with some 3,500 supply companies receiving £6m-£7m pounds of investment from the sector every year. 

“We bring a great deal of value to Scotland, both in terms of employment by creating jobs, in the taxes that we all pay and the support that we give to government by being the country’s number one food exporter,” he says.

The sector, he believes, is also at the forefront of the Scottish Government’s sustainability ambitions: last November the SSPO published A Better Future For Us All, a charter that sets the sustainability standards the sector will meet over the coming decades with commitments to be net zero in greenhouse gas emissions before 2045, highlighting the importance of the ‘blue economy’.

Meanwhile however, flying salmon around the world, as with any other commodity, has been much more costly and much more difficult during the pandemic which is a situation that is continuing and in Europe, references to “teething problems” at new border checkpoints he says minimises and disparages the challenge of any export industry operating into the EU at the moment.

 “Fundamentally we are using a system of documentation that’s designed for New Zealand lamb, not a perishable product such as salmon that needs to be out of the water, into the market and on to a plate within 48-72 hours and salmon farmers are experiencing a variety of issues getting fish to market in good time.”

Yet another issue is the fact that while the system is starting to manage with current volumes, those will rise from spring onward with fears about what that will entail as many SSPO members have delayed or reduced harvests, meaning those fish will have to be harvested soon which will rapidly increase volume.

To help address this, a new Scottish Seafood Exports Taskforce, chaired by UK Government Minister for Scotland David Duguid, met for the first time two weeks ago to discuss ongoing problems with exports, attended by UK Environment Secretary George Eustice and Fergus Ewing, Cabinet Secretary for Rural Economy and Tourism with the Scottish Government emphasising that it “is not a talking shop and we will provide evidence of delivery”.

Scott welcomes its establishment: “Paperwork – the burden of documentation and red tape – is causing endless delays in delivering salmon into the marketplace. And while we can try to overcome those problems as hard as we can, the basic issue is that this paperwork is completely inappropriate for the type of product and the timescales in which we are operating so that’s what are now seeking to address through the task force – because if we continue with the current documentation, the uncertainty of delivery times and all the problems that brings will continue.”

With the EU’s currently inflexible application of new customs regulations, however, is Scott confident that there is the potential for movement?

 “I think the EU will start to become more flexible when their own companies exporting into the UK have to put up with exactly the same paperwork, which will start to happen at Easter time,” he says. “That is when we hope to begin to see a more sensible approach emerging from the European Commission because that is when it will come under pressure from member state governments – because by then they will be dealing with the same ludicrous paperchase as we are.”

Scott says that the SSPO has suggested to the new task force that both the UK and Scottish Governments work together to initiate immediate discussions with the European Commission over existing export documentation.

“That would not only simplify things for Scottish and UK exporters, but it would also assist importers from the EU into the UK domestic market which seems to me to be a win-win for producers and consumers across Europe.

“We hope that instead of playing politics with all of us, the governments will start to sort these problems out,” he says.

He is optimistic that progress can be made: “We have an excellent working relationship with government and with our partners in the regulatory sphere, with a shared agenda of moving the sector forward in a very positive way, both in terms of producing food for the marketplace and doing so by utilising the pristine marine environment in which we operate – and going forward that is the basis for a productive and sensible relationship for everybody.”

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Need to adapt inspired creation of brand where consumer comes first

WHEN global consultancy firm McKinsey and Company published its latest briefing earlier this month on how to prepare for the “next normal”, the obvious target audience might have been the financial, technical and manufacturing sectors but the implications of adapting swiftly to the challenges posed by the Covid-19 pandemic go far beyond that.

In the north west Highlands, Wester Ross Fisheries has sites at Loch Kannaird, Loch Broom and Little Loch Broom. When the company, founded in 1977 as Scotland’s oldest independent, owner-operated salmon farm was confronted by the first coronavirus lockdown last year it faced a massive loss of business as the food service sector, including the premium restaurants it supplied, was forced to shut down.

The problem extended beyond the UK, explains Managing Director Gilpin Bradley: “There was a staged global lockdown and as 70 per cent of our sales are exported we had to be very resourceful and adaptable virtually overnight.”

Then, at the end of the year, came Brexit and with countless other small companies Wester Ross Salmon had to innovate, modernise and stay resilient on two new, daunting fronts.

“We had to implement change quickly,” recalls Bradley. “Our ethos has always been to work with privately-owned, independent retailers and restaurateurs but these were suffering significantly so we had to look beyond B2B (business-to-business) to establish a B2C (business-to-consumer) sales model.”

This quickly led to the launch of Osprey Artisan Co, a new company and brand focused on online retail with a website and app at the end of summer 2020, originally tested on family and friends and noting the growing tendency of customers to order from mobile devices. Going directly to consumers required a fresh approach: “The processing team, used to loading pallets on to a truck were now being asked to make sure that they put a ‘thank you’ card or a special note into the box. That takes a very different mindset so we’ve dedicated couple of days a week to putting serious resource behind the B2C work,” he says.

The venture was underpinned by existing social media activity and Osprey Artisan as a separate brand brings the opportunity sell other Highland produce alongside salmon.

“We hope to grow our offering by diversifying our product range, collaborating with other Scottish artisan producers to build a truly premium range for our customers in the UK and internationally. There’s great produce here but it’s not always easy to get it to market – so if we can add it to a basket of other products we’re selling it helps others to generate some trade,” he says.

Highland businesses, he adds, often work quite closely together for the greater good.

“We share many of the same challenges and there’s a long history of businesses cooperating.”

Despite the pandemic, the company has increased its headcount owing to existing plans for growth. “Covid-19 certainly presented a challenge but with the exception of a few office staff, almost our entire team spends their  working day at sea, which is the lowest risk environment in terms of social distancing.

“Even so, we’ve set up bubbles for each site, with minimal transfer of people between sites. You’ve just got to follow the guidelines and be careful,” says Bradley.

Despite the rapid innovations of the past year, he says the company’s culture remains the same.

“We take a real pride in the fish we are rearing. Both we and our customers are very particular about the end product that we want; namely a slow-growing, hand-reared salmon.

“That means that we, not machines or cameras, are on the water every day to feed and observe the fish.”

The article was brought to you in partnership with the Scottish Salmon Producers Organisation, as part of The Herald's Climate for Change campaign.