Q360 Chairman: I think that is a
very valid point that you have made. I think it would be helpful
to us if you could answer the questions on an industry basis rather
than a specifically Young's basis.
Mr Morrison: There were about four questions
specifically directed to Young's Foodvest and whilst I was going
to give you a specific answer on them I was also going to broaden
it out to an industry perspective.
Q361 Chairman: For example, there
is a question on discards and that could be very much an industry-wide
type question rather than specific to Young's, if that is okay.
Are you happy to go straight into questions?
Mr Morrison: Yes.
Q362 Chairman: Just to set the scene
if you could for us, could you give us an outline of the number,
range and scope of companies that are involved in the organisation
that you are a part of. What is their share of the EU market fisheries?
Mr Morrison: I was going to express it in terms
of the UK market, but I can provide you with further information.
I have done written responses, so if I read these and then I can
answer questions if that is okay.
Q363 Chairman: Surely.
Mr Morrison: As you will be aware, the FDF is
the principal voice of the food processing industry in the UK
with links to our European sister organisations via the CIAA in
Brussels. The CIAA represents FDF equivalents across Europe. The
Seafood Group is a specific sector within the Food and Drink Federation
and has links directly with an organisation called AIPCE-CEP,
which is the European Seafood Processors and Traders' Association.
That is also based in Brussels. AIPCE has 13 Member State organisations,
the equivalent of the FDF Seafood Group if you like, and as associates
we have Norway and Morocco. They can only be associates because
we are members of ACFA as well, the Advisory Committee on Fisheries
and Agriculture and, therefore, we receive some subsistence from
the EC. There are 13 Member State organisations. We are able to
represent our industry both at the national level with DEFRA,
DFID, the Food Standards Agency and the devolved administrations.
We do a lot of work with the Scottish Government. At the EU level,
we work with DG Mare, as they are now called, and DG SANCO. As
I have just said, as AIPCE we have seats at the ACFA, Advisory
Committee on Fisheries and Agriculture. Our Seafood Group membership
comprises of 30 companies, including the major secondary added-value
processors and brand owners, many of which co-produce for the
retailers and the food service companies. We also have some primary
processing interests, particularly in Nephrops, the langoustine,
although other white fish sectors have tended to close or redirect
their businesses over the past few years. In fact, I think we
have probably lost four or five members in the primary processing
sector over the last five years as they have either gone bankrupt
or just closed. As you will be aware, Nephrops is the largest
UK fishery and our members represent something like 85% of the
UK processing industry, so we have a long-established sector dealing
with this with its own chairman. More recently, we have also created
the tuna, salmon and aquaculture sub-groups, all of which are
chaired by our members. Our members include the largest fish canner
in the UK, that is IFC International, which packs mainly pelagic
fish for most major brands. We also are very much involved with
frozen and chilled foods. Some of our largest members, in alphabetical
order, include Alfresca, Birdseye-Igloo, Dawnfresh, Foodvest,
which is Young's and Findus, and the Icelandic Group. So we are
represented across all key processing sectors. You will recognise
the brands, such as Lyons, Dawnfresh, Birdseye and Young's in
particular but, as stated, our members also pack for all of the
retailers and food service companies. We estimate that our members
are responsible for about £2 billion of seafood products
in the UK. Depending on how you estimate the value of the industry
as a whole, that is certainly 50, 55% or more of the total market
in the UK. However, a number of our members do have wider European
interests as well. For example, Alfresca, which is an Icelandic
company, is represented here by Lyons and Farne Salmon, in the
north-east, and in France they have Labeyrie also majoring in
salmon. Birdseye, of course, is well-represented on the continent
via the Igloo brand and the Icelandic Group as well, which is
Seachill here, has a number of interests in France and Germany,
in Germany as Pickenpack which is a very large secondary processor.
Foodvest, who I work for, of course, on a part-time basis, has
a total turnover of £1.1 billion and approximately £600
million of that is in the UK with the Young's brand and what they
pack as well for the retailers. Then they have £500 million
in Scandinavia and France, and that is with the Findus brand.
Whilst the UK, the Young's brand, is 100% seafood, the Findus
brand on the continent is 75% seafood and there are some other
frozen interests as well. Of that £500 million, £400
million is in the EU and the Findus brand in Norway is £100
million. It is £1 billion of turnover in the EU and then
£100 million in Norway. It is a big company. Total seafood
purchases by Foodvest are approximately £360 million, of
which 32% originates from within the EU and that is £71 million
from wild capture and £42.5 million from aquaculture. Globally,
we have estimated that 45% of fish consumption is represented
by aquaculture products. You will be aware of the importance of
carp and tilapia in Asia, for instance. Carp dominates aquaculture
in the world as a whole, although it is not important in Europe
any more and certainly not in the UK. However, in Europe the proportion
of aquaculture is significantly less than this 45% but is growing
quickly and we would estimate at the moment that it is somewhere
between 35% and 45% of all seafood. Obviously this will vary from
company to company. If you take Lyons, for example, they are major
producers of shrimps and a high proportion of what they do is
from aquaculture. Seachill, which is part of the Icelandic Group
in Grimsby, are major packers for the retailers and are heavily
into salmon, all of which is aquaculture, of course. Overall,
38.5% of Foodvest's seafood purchases are from aquaculture and
that is predominantly salmon and shrimps, although they do have
interests, as other companies do, in sea bass and sea bream from
the Mediterranean. I think it is worth mentioning at the moment
a species called Pangasius, which is a catfish species that is
principally grown via aquaculture in Vietnam. That is currently
undergoing exponential growth. It has gone from just a few thousand
tonnes to last year I believe it was 1.1 million tonnes. It is
literally going up like that. Although it is catfish, when it
is filleted the skinless fillets look very much like a sole and
it is becoming a very, very popular species because it is quite
bland, very white, and is now seen as a potential substitute for
a number of the maritime white fish species. I think you will
see a lot more of that over the coming years.
Q364 Baroness Sharp of Guildford:
Sorry, could you say the name of the fish again?
Mr Morrison: Pangasius, P-a-n-g-a-s-i-u-s. It
is sold here as Basa. A number of companies are currently selling
it as Basa in the UK. Just as a slight aside, under the marketing
regulations of 2004 each Member State is required to officially
register the names of species and if new species come along they
have to establish a species name. The Food Standards Agency has
an expert committee, and I sit on that along with scientists and
people from the industry as well, and there was a big debate on
what we should call Pangasius, because that is the Latin name.
It is known locally as Basa in Vietnam and it is called that in
Australia as well, so after a big debate we decided that is what
the name should be here. That has now been drawn up into UK legislation.
Just as another slight digression, all of this gets rather complicated
because if you think of Nephrops, norvegicus langoustine, the
official legal name in the UK is scampi, and langoustine is a
small lobster, of course, but if you go on to the Continent, Greece,
Germany and various other countries, the name scampi is used for
large shrimps. We do not have uniformity across the EU and it
can be complicated.
Q365 Lord Plumb: Is there any danger
of Basa being sold under another name?
Mr Morrison: Somebody created the name "Vietnamese
sole" and I got very concerned about this, so as part of
the steering group I actually had that name taken off the UK food
labelling legislation. I had that taken off because, one, it is
not a sole and, two, when it is filleted it looks rather like
a sole and there was a very good chance of substitution. I would
suggest, particularly when you are in Brussels, if you have sole
and the price does not seem right you look carefully.
Lord Plumb: That is exactly what I was thinking.
Q366 Chairman: My impression is that
the variety of fish that is coming onto the market now is much
greater, it has grown enormously from even a few years ago.
Mr Morrison: Absolutely. One of the reasons
for this, of course, is the British public fly all over the world.
When I started in the industry it was cod, haddock and plaice
and they would not divert from that. Now they go to the Mediterranean,
they see the snappers and the langoustine there, most of which
has come from Scotland, and they are becoming very much more adventurous.
Companies like Seachill, as I have mentioned, and Young's that
supply into the chilled market, if you look in Sainsbury's, Tesco
or Marks & Spencer, they can pack 62 different species over
the course of a week and because they have relatively short runs
they can do as many as 30 species in a day of chilled product.
The chilled market is huge in the UK compared to the rest of Europe
and it is very much based on fresh products, well-prepared products
of a whole range of species, and many of these are flown in. The
snappers, for instance, will be flown in. Tuna loins, which I
will mention later, are flown in on a daily basis as well.
Q367 Lord Cameron of Dillington:
When you say that 35-40% of the EU is aquaculture, your definition
of aquaculture is both ranched fish and farmed fish, is it?
Mr Morrison: Yes. Salmon obviously dominates
here. It will include some mariculture as well. Just to finish
on this question. In terms of wild caught fish, the white whitefish
species, such as cod, haddock and Alaska Pollock, dominate here
in the UK and flatfish species are also very important. Herring
and mackerel used to be very important here in the UK but as those
stocks declined popularity never came back, in particular as the
herring came back. I was just going to mention the exotic species,
but we have dealt with that. That was my response to question
one.
Q368 Chairman: Thank you very much.
What aspects of the Common Fisheries Policy are most relevant
to your interests?
Mr Morrison: The most important aspect of the
CFP is the implementation of effort and stock management to ourselves
and regimes to ensure conservation and sustainable harvesting
of commercial fish stocks that should be managed within safe biological
limits. Of course, part and parcel of all of that is good control.
You see all of the headlines in the papers about fish stocks declining
and over-fishing, illegal fishing, et cetera, and the first point
of contact on matters like that would be the retailers or the
major brand owners. Interestingly, in these days when many of
the companies are owned by venture capitalist and banks, it is
very often the investors coming on the phone asking, "What
is the state of stocks? Are they in a perilous condition and what
does this mean for our companies?" Not only do we have the
consumer concerns but we have the financial investor concerns
as well. It is sustainability and making sure that the fish is
legal.
Q369 Chairman: Pressure from your
venture capitalists is actually to say, "Make sure that we
have sustainability of stocks"?
Mr Morrison: Absolutely, sustainability, making
sure it is legal, and is the fish here tomorrow as well. A company
like Young's, or any of our major companies, has got a long-term
investment in seafood and we need to make sure that it is here
for tomorrow as well as today, which is why we put so much effort
into trying to promote sustainability and legal catch.
Q370 Chairman: What is your judgment
on where we are in terms of controlling illegal landings?
Mr Morrison: I think it has got very, very much
better. I know that the first-time buyers and sellers controls
should have come in in 1992, the Directive, and as the UK we did
not bring them in until 2005. At the time we were heavily in favour
of bringing them in as quickly as possible even though a number
of interests wanted to put it back. There were all sorts of things
being said, such as "It'll be the death of the industry",
et cetera, but now everybody is saying what a great success it
has been. Prices have gone up as well. There is less fish being
landed, but the fish that is being landed is getting a much better
return. I think everybody now feels much more confident. I think
that the UK is pretty okay now. Not all Member States have yet
put this legislation in place. Some have, Germany and the Netherlands,
where it has been in operation for some time, but not all others
have put it in place or are policing it as effectively as we are
now.
Q371 Chairman: Would you care to
identify them?
Mr Morrison: It is probably to best not.
Q372 Viscount Ullswater: In some
of the figures that you gave us, I think you said that only 32%
of the processed fish came from the EU and about 68% was imported,
therefore the catching and the processing are interlinked to that
extent. Is the volume of processing increasing and where will
the increase in volume come from? Will it come from imported fish
or more aquaculture, or do you see the EU catch increasing? Perhaps
you could help us with employment numbers and that sort of thing
as well.
Mr Morrison: Okay. I can go into some detail
on that as well. If I read what I have here and if you want to
put specific questions I can come back. An interesting general
statement that can be made is that we export what the UK fleet
catches, and perhaps this is not always understood, and we import
what we eat. For example, 90% of all the mackerel and the herring
that we land goes eastwards as far as Japan and much of the whitefish
that is landed in the north-east of Scotland, for example, you
can see in the Madrid market. I was at the Madrid Seafood Market
last year and it was like being in Scotland. So much of the product
is exported and certainly an awful lot of the shellfish from the
South Coast goes straight into vehicles and is exported to France
and Spain. I mention the Nephrops as well. Even though Nephrops
is the major species for us as processors in the UK, we only process
about a third of it and the rest goes to the Continent, to France,
Spain and Italy. It either goes fresh or frozen or as vivier—live—shipped
straight down to Spain in particular. That is why I was saying
earlier that when holidaymakers go to the Mediterranean they eat
the nephrops and they think it is great, but it was landed in
Scotland or Ireland. It is perverse, really.
Q373 Viscount Ullswater: Can you
just go into the economics of that? I am not quite sure how I
understand the economics of it. You must be able to import fish
cheaper than it is landed in Peterhead.
Mr Morrison: Yes, but one of the issues that
we have—and we had a lot of debate about this in Brussels
at ACFA and with DG Fish a few years ago—was that they were
saying, "Everything we're doing with respect to cod, and
the price is going down. Why is this?" Nobody could understand
it. The answer, effectively, is that there is not enough cod landed
now—it started in the UK or in northern ports—to make
it worth our while to process it economically. It is small volumes
and it is landed on a regular basis. This has changed massively.
When I first started in the industry, we had block producers.
You are aware that fish fingers are cut from fish blocks by highly
specialised, mechanical processes. You therefore have to make
a fish block that weighs something like 7½ kg. It is made
by layering the fillets in a frame; that is plate-frozen under
pressure so that you get a very regular block; and then you can
cut it. Virtually all of the cod that went into the processing
industry used to be made into blocks. There were several block
production facilities in Hull, Grimsby and also across Scotland.
There were lots in Norway, lots in Denmark in particular, and
in Germany. All those have now gone because there is not the cod
available, landed locally, to be able to use. The last one in
the UK I think went three years ago. I was doing a study with
the Food Standards Agency, looking at fish content of fish—analytical
methods—and we started off in one factory, which went bankrupt.
We had to move to another and another, and the last one that went
bankrupt was the last one; so we could never finish the study.
It was terrible! The only block production company left now is
in Poland. I think that there are just two in Poland, and the
rest have gone. It has all gone to China. I have completely gone
away from my script now, but never mind.
Chairman: It is absolutely fascinating!
Q374 Baroness Jones of Whitchurch:
Is China using cod? Is China doing blocks of cod or different
sorts of fish?
Mr Morrison: There was never that much cod actually
landed from the North Sea that went into processing. There was
an awful lot from the Baltic, because the Baltic at one time was
a huge fishery at 350,000 tonnes; but that has gone down dramatically
over the years, just as the North Sea has, and the Baltic was
a major source of cod for cod blocks. What has happened with the
fish that is left is, because there is not enough for us and it
was not worth our while buying it, the Scottish Government and
Defra had strategy meetings and a whole programme to look at how
we could best utilise UK fish. Our position was, "There is
not the volume here. We can't buy it to go into bulk processing
as we used to do. What we should do as an industry is land high-quality
product at a lower volume, move that into niche markets and let
us market it. If we want to put it into the chill chain, into
the retail chain, and there is sufficient of, say, Scottish cod
or whatever, if you can supply it on a regular basis we can develop
a specific line for a specific retailer and market it that way".
Q375 Chairman: Is that happening?
Mr Morrison: That happens, yes. Certainly the
attitude of the UK catchers has changed dramatically. It is now
all about, "Yes, let's maximise the value that we can get
from our product"; but, of course, it is not good for secondary
processors, who need the volume.
Q376 Chairman: Could I follow this
up a little? When I had any contact with the industry at all,
which is over ten years ago now, one of the problems seemed to
be that there was very little dialogue between the catchers and
the processors.
Mr Morrison: It has changed dramatically. We
work hard on that, from both sides.
Q377 Chairman: The catchers were
going out and their emphasis was on quantity, and the processors
were saying, "It's all right having that, but the quality
is so poor that we don't want it".
Mr Morrison: Exactly. That has changed dramatically.
Q378 Chairman: That is very important.
Mr Morrison: Of course, we do not take much
of it now, as I say, because there is not the volume there; but
they recognise the need for quality. Seafood Scotland plays an
important part in that and Seafood Cornwall also plays an important
part. Seafood Cornwall has developed this Cornish mackerel and
they are also working very closely with retailers to develop markets
for their pelagic fish. Yes, it is a massive change. I never thought
that I would see it, but it is very encouraging.
Q379 Baroness Sharp of Guildford:
Does that also mean that all the fish fingers we have in Britain
today come from China?
Mr Morrison: Yes, indirectly.
Baroness Jones of Whitchurch: People do not
eat fish fingers any more, do they?
Baroness Sharp of Guildford: No. Now that my
kids have grown up, I do not!
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