Stuck in a low gear
Europeans consume more aquaculture produce than they grow, Vince McDonagh finds.
Aquaculture in the European Union is not in a good place right now as the sector grapples with falling consumption and sluggish production activity.
This is the conclusion of two recent reports covering both fish farming and general fishing.
The most recent is an evaluation from the European Fish Processors and Traders Association (AIPCE-CEP) which shows that the salmon supply to Europe fell by at least 5% last year.
One likely factor is consumer resistance to high salmon prices which persisted throughout most of last year.
Much of the salmon sent to Europe is from Norway, its largest provider, and is sent for further processing. But the overall picture is that Europeans are now both producing and eating less seafood of all types.
The downward trend in Europe follows a similar trend to that in the UK, highlighted by a Seafish study earlier this year, although Seafish has since said there are currently signs of a recovery.
The other report, from EUMOFA, paints a broadly similar picture although its data is based on figures from 2021 when Covid was still widespread.
It says that EU aquaculture production accounted for only 28% of the global total of fishery and aquaculture products (FAPs) production.
Patterns and market trends vary across member states and across species, with markedly higher consumption in some countries.
The EUMOFA report also says that EU farmed products face various market positioning challenges including the need to adapt to climate change, overcoming resource scarcity, coping with increased production costs, and facing up to strong competition from third-country products.
It should also be noted that 12 months earlier the EU suffered an important setback when it lost the world’s third largest salmon producer in Scotland as a result of the UK leaving the community.
So, with the possible exception of Ireland, the EU no longer has a salmon-producing country of note.
Europe: depending on imports
The figures from the European Fish Processors and Traders Association are the most relevant – and the most worrying.
The association says that if all EU aquaculture and catches for food use were retained and consumed within members states, they would account for only 31.3% of total available supply to those states.
But as much of what EU countries produce is exported; in reality domestic supply only covers 14.2% or less than half of overall consumption.
AIPCE-CEP says the EU’s dependence on imported materials for its markets has remained exceptionally high, particularly following the UK’s exit from the EU.
In 2023, this dependence decreased to 62.2%, largely due to stable EU production and a decline in imports from third countries.
Salmon is the most popular fish on the Continent with Norway the largest supplier, followed some way behind by the Faroe Islands and Scotland.
Last year, the report notes, the consumption of Atlantic salmon within the European Union fell by 5% or 65,000 tonnes to 1,327,000 tonnes.
Salmon from Norway mostly enters the EU’s 27 member states by road via Sweden, Denmark and Poland, where the fish are processed for further distribution throughout the union.
Despite repeated calls for Norway to process more at home, forwarding to the “EU 27” remains a more economic option for producers, because labour costs can be much lower.
Salmon has become an essential species for the EU’s seafood processing plants, especially in Poland, Netherlands, Belgium, Denmark, France and Spain. Filleting and cold/warm smoking are the most important processing steps.
The association said: “In AIPCE-CEP, we continue to observe a growing diversity in species, frequency and consumption patterns as innovations in packaging, logistics and access create new opportunities for consumers to enjoy fish more frequently and in varied forms.
“In 2023, inflation across the EU impacted seafood sales. Consumers shifted from more expensive species to lower cost alternatives, such as cheaper fish, meat or poultry.
“Consequently, high-priced seafood stored in cold facilities was often sold below cost price or with minimal margins to remain competitive.
“This led to a decline in financial performance for many companies within the EU seafood sector in 2023. Towards the end of last year, traders and industry players sourced increased volumes of seafood from Russia, benefiting from preferential tariffs under the ATQ [autonomous tariff quotas] regulation.”
ATQs are temporary import restrictions that allow a certain quantity of a good to be imported at a reduced tariff or duty-free for a set period of time.
The AIPCE-CEP report adds: “From 2024, Russia was excluded from these tariff advantages. Additionally, since 2023, medium- and high-risk seafood products destined for the UK must be accompanied by a health certificate.
“Although trade flows have stabilised, trading with the UK now presents challenges similar to exporting to other third countries.
“To ensure continued access to market opportunities, it is essential that the industry is not hindered by unnecessary tariff or non-tariff barriers. “
Maintaining access to raw materials through the ATQ system, without duties, is crucial, it stresses.
Imposing duties increases costs for consumers, potentially leading to reduced sales and putting pressure on EU-based production. This could result in production moving outside the EU, the organisation warns.
The EUMOFA report, as well as outlining the market positioning challenges already mentioned, suggests that the aquaculture sector in the EU is also characterised by a low level of organisation in the industry, which has the effect of limiting its bargaining power and investment capacity.
The aquaculture sector in the EU is diverse. It includes some large-scale operators with the capacity to invest, but it also comprises many small-scale companies with limited resources and these will find it harder to adapt.
Producers must continuously take account of changing consumer preferences and retailers’ requirements, the report adds.
Scotland becoming a key supplier to Europe
WHILE Norway and the EU remain in dispute over the provision of low category production salmon, the UK is becoming an increasingly important source for salmon in general, says AIPCE-CEP.
According to Norwegian law, the fish must have wounds and deformities removed before it is exported but the European Commission has classed this as a trade barrier and is pushing for the restriction to be removed.
The organisation adds: “UK became an important new third country where salmon products were imported from into the EU 27.
“Materials are mainly originated from Scotland mariculture of Atlantic salmon. Some 85% of the 59,000 tonnes imported from UK consisted of whole, fresh salmon,” it adds.
AIPCE-CEP: speaking for European aquaculture
The European Fish Processors and Traders Association (AIPCE-CEP) represents 19 EU National Associations from 12 member states and three national associations in third countries (UK, Norway and Morocco).
It accounts for more than 3,900 enterprises and 128,000 people of which more than 80% are at EU level.
The value of the output of the industry represented by AIPCE-CEP amounts to around €30 billion (£25bn) or about three and a half times the turnover of the entire EU catch sector.
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