Tegen Mor Fisheries Consultants - Seafish - Seafish retailers, foodservice, fish meal companies, bait suppliers, ice suppliers, box pool operators and administrators. These will be

Landing Obligation - a study of impacts on the UK supply chain

Tegen Mor Fisheries Consultants

Nathan de Rozarieux


1. Background: “game changer”

• The introduction of the landings obligation is a ‘game changer’ arguably the most significant change to the fishing industry since the introduction of quotas in 1983

• The move from ‘landing quotas’ to ‘catch quotas’ has the potential

to have a range of significant impacts on operations throughout the ‘sea-to-plate’ supply chain


2. Context • Phased approach to implementing landing obligation for demersal species

commences 01/01/16 • If implemented badly the new rules are a potential risk to supply • The capacity of all parts of the onshore supply chain (both human and

non-human consumption) to land, store, process, transport, administrate and market is not fully understood

• The scope of potential impacts needs to be developed to provide an

opportunity for informed discussion between all supply chain partners to identify information gaps and opportunities to develop solutions


3. Study aims:

The aims of the work are to:

• Explore the range of potential changes in behaviour of one sector in response to changed behaviours of other sectors (e.g. from status quo to fishery closure)

• Undertake qualitative analysis on the possible impacts of these across the whole supply chain, from financial, legal, operational and market perspectives. (for example: reputational risk, loss of supply, changes in size of fish landed, loss of market and financial risk)

• Identify gaps in information and, where possible / appropriate make recommendations for further work.

Tegen Mor Fisheries Consultants 4. Approach • Desk-top study & scoping potential supply chain issues

analysis


4. Approach • Stakeholder consultation

Face-to-face interviews - NE Scotland - N Ireland - Shetland - London - E England - SW England - SE England Stakeholders Fishermen, POs, federations, harbour authorities, hauliers, processors, processor associations, retailers, foodservice, fish meal companies, bait suppliers, ice suppliers, box pool operators and administrators. These will be supplemented with additional follow-up telephone interviews as required.

Tegen Mor Fisheries Consultants 5. Results (so far…) Lots of ‘known unknowns’ and lots of ‘unknown unknowns’ What we do know is that nobody knows for sure what will happen The answer will be somewhere between A and B

No change in landings

Tonnes of discards landed

Quotas exhausted and landings cut off

A B

Economic drivers

Reduced landings

- cost of quota - cost of handling


5. Results (so far…) General consensus:

- Wild seafood supply chains are inherently flexible and dynamic

- Year 1 (2016) will probably pose few challenges

- Years 2-5 will become increasing challenging

- Any form of fishery ‘choking’ would cause most significant

impact on supply chain and avoidance of this scenario should

be a top governmental priority

- Quota management is key


5. Results (so far…)

Ports / harbours / agents • Range of views - from no involvement to making provisions to support

• Legal responsibility and therefore cost implication is key issue

• Un-certainty over volume and likely evolution deterring investment

• Animal By-Products (ABP) regs becoming clearer

• Chill space, handling charges, boxes, ice costs all passed back to boats

• Admin burden increase

• Detail required around audit trail requirements

• IT software used by agents, POs, MMO and MS for RBS will need updating

• Cost burden (infrastructure, handling, admin, space)



Ports / harbours / agents



Primary processors / wholesalers • Varies by area - NE & NI see possible opportunities if increased landings

of smaller fish / prawns

• SW - less opportunity in small fish as production cost per kg yield higher

than with larger fish

• NE Scotland processors specialise in smaller haddock and concern that

improved selectivity would limit supply of smallest sizes

• Sector generally quite resilient to fluctuations in supply and fish size

• Most source majority of raw material from local market / port and

therefore have high dependence on UK fleet



Primary processors / wholesalers


5. Results (so far…) Secondary processors / retail / foodservice suppliers • Generally less dependent on UK supplies

• Volume, continuity & quality requirements means this sector depends on

largely on imports as more consistent

• Would import more to make up shortfall (but would price increase)

• Reputation (ethics & sustainability) is important to customers

• Contractually committed to customers (often with fines if breached) and

hence have contingency plans in place (building frozen stock early in year)


5. Results (so far…) Retail sector • Adds further risk consideration to sourcing decision tree

• Despite promotions of British fish relatively small volume (as overall %)

of UK wild caught TAC species sold fresh (salmon, prawns, tuna, farmed

bass & bream etc)

• Reputation and customer perception is important

• Rely on suppliers to build contingency plans (freezing, imports) e.g. early

closure of ray fishery 2014 did not lead to de-list

• tbc


5. Results (so far…) Foodservice sector • Fine dining - dependence on British UK wild caught fish species greater

than retail sector, but have greater flexibility to change menu flexibility to

deal with interrupted supplies

• Size specific - typically larger fillets or plate sized fish

• Reputation and customer perception are important

• Pub / hotel - typically use frozen / processed products and less

dependent on fresh supply chain

• tbc


5. Results (so far…) Transport sector • Well established specialised transport

network connects seafood supply chain

across the UK

• Additional transport capacity available

• Increased volume (marketable & fishmeal)

to transport seen as an opportunity



Fishmeal & bait sectors • Fishmeal provides significant market for fish destined for non-human

consumption market

• Supply to fishmeal could be least costly option (cost neutral)

• Strong demand from potting sector in some concerns but concern over

admin / audit trail requirements (RBS etc).

• Matching supply to demand could involve freezing / frozen storage

• Landfill is a costly (£80/t) last resort for small quantities in smaller ports

that lie outside the established transport network


6. Analysis and reporting (August - September) Conclusions: • Many unknowns - make accurate predictions v difficult • Change will be driven by restrictive access to quota which will intensify

towards 2019 when species with most limited availability added • Severity of potential impacts / risks appear to decrease through supply-

chain (will consumers notice at all?) • Solutions to handling <MCRS discards exist at larger ports but ownership,

engagement & management needed at port level • Strong case for small ports to be exempt based on dis-proportionate costs

(e.g. 100kg per week 100 miles roundtrip from landfill)


Any questions?.. you know Hugh to ask!

Documents

Tegen Mor Fisheries Consultants - Seafish - Seafish retailers, foodservice, fish meal companies, bait suppliers, ice suppliers, box pool operators and administrators. These will be