London Annual Seafood Report
AGR Number: UK5075

From: U.S. Embassy, London
To: USDA/FAS Washington D.C.
Country: UK
Year: 1995
Report Code: 54 Post Report Sequence Number: 004
Report Title: Seafood
Report Type: A - Annual Report
Report Subject: Seafood
Approved By: Richard L. Barnes
Drafted By: Richard Ali
Security Classification: Unclassified, Not Official USDA Data
Date Due (MM/DD/YY): 09/15/95

Report Code: UK9554A
AGR Number: UK5075
Page: 1
Seafood

General Summary

Increased demersal and shellfish catches outweighed a fall in the pelagic catch to result in an overall increase of 1 percent in the UK sea fish catch in 1994. Farmed salmon production increased significantly during the year, registering a 31.5 percent rise. In total, the seafood harvest recorded an increase of 4.1 percent in 1994.

Although value growth was not on the same scale as in 1993, the UK market for fish and fish products was valued at an estimated BPS 2.4 billion compared with BPS 2.3 billion in 1993. Lower consumption of canned tuna was responsible for    eduction in overall UK seafood consumption in 1994, but there was a general improvement in the market for other fish and fish products during the year. Household consumption of fish (excluding canned) rose by an estimated 1.9 percent in volume terms to around 208,000 mt, while catering usage is put at 157,000 mt.

In general terms, consumer preferences shifted away from fresh and chilled fish and canned fish during 1994 toward frozen value added seafood products. This trend is likely to continue, driven by lifestyle changes and the demand for cosmopolitan flavors. Groundfish, especially cod and haddock, remain extremely important to the British consumer, but salmon, which has become more competitive and is widely available, is now the third most popular fish. Interestingly, the salmon industry has yet to exploit consumers' desire for coated, chopped, shaped and flavored seafood.

Trade in seafood products continues to be important to the UK. Imports, buoyed by strong demand from processors, increased by 3.8 percent to 458,182 mt and were valued at BPS 1,016 (USD 1,625) million in 1994. Although the export volume of fresh/frozen fish fell due to tight supplies, total export value, increased by 3.9 percent to 378,562 mt, valued at BPS 688 (USD 1,100) million.

The UK total commercial catch is expected to increase by around 4.3 percent in 1995 primarily because of good fishing conditions and a further increase in farmed salmon production. Fresh and frozen
production is therefore expected to increase in parallel with raw product availability. Imports are likely to fall slightly during 1995 in response to increased domestic production, while exports are expected to rise. The sea fish catch is then likely to fall back to more normal levels in 1996, which will reduce total landings and fresh/frozen production, and lead to higher imports and lower exports.

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Seafood

General Summary

Domestic consumption is forecast to increase by around 1.6 percent during 1995. Household consumption of frozen seafood and canned fish is expected to increase but the decline in household consumption of fresh/chilled is forecast to continue. Catering usage of fish is expected to register a further increase during 1995. These trends are likely to continue in 1996, although canned consumption is expected to be relatively static.

Notes

1. According to both industry observers and the Ministry of Agriculture, Fisheries and Food (MAFF), illegal or "black" fish, are being landed by UK fishermen. These fish do not conform to policy regulations; being undersize, outside UK quota limits, or out of season. As the extent of these landings is not quantifiable and differs between species, no estimate for these undeclared landings has been made in the data in this report.

2. The rate of exchange used in this report is USD 1.6 = BPS 1.

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Seafood

Total Edible Fishery Prods.

Production

General

The UK sea fish catch totaled 631,797 metric tons (landed weight) in 1994, an increase of 1 percent on the previous year. The salmon harvest is estimated at 64,924 mt, the trout harvest at 6,500 mt and the farmed shellfish harvest at 1,000 mt. This gives a total UK seafood harvest of 704,221 mt compared with 676,566 mt in 1993; an increase of 4.1 percent.

Based on current data, the UK seafood harvest is expected to total 735,000 mt in 1995. Part of this increase will be due to the fact that the Ministry of Agriculture, Fisheries and Food is no longer recording landed weights, but rather live sea fish weights. Readers are therefore advised to note this statistical change for 1995 figures onward.

Wild Catch Production Factors

The main demersal stocks harvested for human consumption in the North Sea (cod, haddock, whiting, plaice and sole) were, according to scientific the assessments carried out in 1993, subject to comparatively high fishing mortality rates. The cod stock seems to have stabilized at an extremely low level. The stock's spawning stock biomass (SSB) was only one third of the

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Seafood

Total Edible Fishery Prods.

Production
level of 150,000 mt, which is considered by the International Council for the Exploration of the Sea (ICES) Advisory Committee for Fisheries Management (ACFM) to be the lowest desirable biological level. Other fish stocks remain under pressure to varying degrees.

At the end of 1993, the UK fleet, including the Channel Islands and the Isle of Man, totaled 11,692 vessels with a gross tonnage of 218,961. The following table sets out the main activities of the fleet for 1993, the latest figures available.

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Seafood

Total Edible Fishery Prods.

Production
Production Mix

Cumulative Production Issues
The most pressing production issue, which will have to be addressed on national, regional and global scales, is the diminution of fish stocks caused by over-fishing and pollution. In the EU, illegal landings are alleged to be adding to the problem as fishermen attempt to maximize their own income at the expense of future resources. Across the EU, modern technology is allowing fleets to catch increased quantities of fish.

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Seafood

Total Edible Fishery Prods.

Consumption
Total seafood consumption was 451,479 mt in 1994 compared with 462,865 mt in 1993. This 2.5 percent decline in consumption is due to an estimated fall of around 20 percent in canned fish consumption due primarily to increased prices for canned tuna.

Utilization Patterns
The household market for seafood (excluding canned) is estimated at 208,000 mt (worth BPS 950 million - USD 1.5 billion). Of this, 63 percent is in frozen form (BPS 535 million - USD 856 million). The majority (78 percent) of fresh fish is purchased by consumers over the age of 45, whereas 35 percent of frozen fish is purchased by consumers between the ages of 28 and 45 indicating a potentially significant shift in buying patterns in the future.

The catering market for seafood (excluding canned) is estimated at just under 157,000 mt. Of this, fish and chip shops are estimated to use around 48,700 mt, canteens 23,500 mt, educational establishments 18,800 mt, hotels and pubs 15,700 mt each, restaurants 14,100 mt and health care 12,500 mt. The remainder is split between cafes, clubs and services.

Total 1994 canned fish consumption is estimated at 86,750 mt, of which tuna has a market share of around 50 percent, red salmon 18 percent, pink salmon 9 percent, pilchards 8 percent, sardines 6 percent, mackerel 4 percent and all others 5 percent.

Cured fish consumption rose by an estimated 10 percent to around 30,500 mt in 1994. Household purchases of smoked salmon fared particularly well, increasing by 20 percent to around 630 mt.

Substitution Patterns
According to Seafish data, household purchases of fresh and chilled fish fell in Great Britain (excluding Northern Ireland) by 4 percent in volume terms in 1994, while purchases of frozen fish and fish products increased by 5 percent in volume terms. Significant increases were seen in purchases of smoked fillets (18.5 percent), battered fillets (46 percent), breaded fillets (8.9 percent) and fish main meals (21.8 percent).

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Seafood

Total Edible Fishery Prods.

Trade

Trade Trends
Total UK imports for 1994 were valued at BPS 1,016 (USD 1,625) million compared to BPS 952 million in 1993. Of this total, 78 percent originated from outside EU-12. Imports of fresh/frozen seafood increased by 11.5 percent buoyed by strong demand from processors. Canned imports declined by 13.7 percent as higher tuna prices, and stock releases in the case of salmon, reduced import requirements. Imports of cured products fell by 3 percent during 1994.

UK exports, boosted by the competitive value of Sterling especially against other EU currencies, reached BPS 688 (USD 1,100) million in 1994 compared to BPS 460 million in 1993. Exports to EU-12 accounted for 90 percent of total UK exports. Despite this increase in value, the volume of fresh/frozen exports actually fell by 4.9 percent because of relatively tight supplies on the domestic market. Canned exports (mainly re-exports) increased by 56 percent, but remain a relatively minor component of the UK's export trade. Cured exports also increased, by 54 percent, but also remain minor in volume terms.

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Seafood

Total Edible Fishery Prods.

Trade
Factors Affecting U.S. Trade
U.S. exports of seafood products to the UK were valued at BPS 46.8 million in 1994 compared to BPS 84,738 in 1993. This significant fall was primarily due to the 43 percent fall in the value of canned salmon to BPS 30.5 million in 1994.

Future U.S. trade is likely to be affected by the increased import requirement for canned salmon in 1995 and by currency fluctuations as the dollar is presently strengthening against Sterling.

Stocks
Total stocks of seafood products were estimated to be around 85,000 mt at the end of 1994.

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Total Edible Fishery Prods.

Policy
Resource Management Policy
UK fishing policy is determined by the operation of the Common Fisheries Policy (CFP). Within the CFP, Total Allowable Catches are set each year by the Council of Ministers following scientific advice on the levels of fishing that stocks can support. The TACs are then allocated as quotas to member states. CFP regulations also include technical conservation measures. Opportunities for the UK fleet to fish in third country waters are also secured through the CFP.

Producer Organizations (POs) established under the CFP allow groups of fishermen to manage allocations of some whitefish stocks in some areas of the North Sea and the West of Scotland.

The UK operates a number of grant and assistance measures to support acquaculture, fishery harbors, the marketing and processing of fish and the promotion of safety on fishing vessels. MAFF expenditure (excluding administration costs) for 1994/95 was: On the conservation of sea fish stocks - BPS 185,000; on decommisioning and related structural measures BPS 25.3 million; and on fish farming and shellfish production BPS 254,000.

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Seafood

Total Edible Fishery Prods.

Policy
Production Policy/Price Support
The CFP gives POs the option of operating market support measures to match their member's supply with market demand. POs may adopt minimum (withdrawal) prices, and if a buyer cannot be found for their member's catch at, or above, these prices, the PO must withdraw that fish from the market. Withdrawn fish is then used for purposes other than human consumption.

If the withdrawal price adopted by the PO is within 10 percent of that set by the EU, the Intervention Board (which administers EU CAP and CFP support funds in the UK) can provide partial financial compensation for the cost of the withdrawn fish provided that no more than 14 percent of a POs annual production is withdrawn. The CFP also provides for a system of private storage aids, but these are rarely used in the UK.

There are also capital grants for processing available from the EU. These payments are budgeted at around BPS 2 million per annum between 1995 and 1998, of which approximately 80 percent is reimbursed from the EU.

Export Subsidies
The EU export refund system for fish was abolished in 1992.

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Seafood

Total Edible Fishery Prods.

Policy
Tariff Policy
Tariffs relating to seafood and seafood products are set by the EU Commission. Details of the EU Uruguay Round GATT commitments for various products can be found under the separate commodity headings. (A full list of EU tariffs can be found in UK4043).

Non-Tariff Barriers
Seafood processing plants must have EU approval to be able to export to the UK. Seafood and seafood products fall under the EU Veterinary Checks Directive (90/675/EEC), which governs the border inspections to be carried out by customs authorities. Ports of entry must be approved to handle fish and fish products.

Prices
Fish lost some of its competitiveness during the year with pork, bacon and poultry meat all falling more in price as can be seen from the following table.

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Total Edible Fishery Prods.

Marketing
Seafood often faces heavy marketing competition from rival proteins in the UK food market. The Sea Fish Industry Authority's (Seafish) marketing budget for the year ended March 1994 was BPS 2.8 million compared to the Meat and Livestock Commission's total marketing expenditure of over BPS 15 million. However, Seafish believe that it can benefit from the many problems facing the meat industry by targeting its resources.

The UK seafood sector continues to develop new products to satisfy consumer demand for convenient, ready prepared foods. Recent examples of this include flavored nuggets (made from surimi) and fish coated in ethnic flavors. Many of the developments in the seafood sector are mirroring earlier innovations in the poultry sector.

Market Development Opportunities
Opportunities for U.S. seafood exist throughout the sector. However, consumers are increasingly drawn to innovative value added products. This may be an area in which U.S. seafood companies would have a competitive advantage, introducing new products to the UK market, possibly utilizing a generic "American Seafood" logo or stylization.

Marketing Facilities
With the introduction of the EU Single Market regulations in 1993, all fish entering the UK/EU must do so via a border inspection post approved to handle the product. In the UK, the major international airports of Heathrow, Gatwick and Manchester are all approved   The container ports of Harwich, Felixstowe and Liverpool are among the seaports with approval.

Marketing Channels
For an in-depth examination of the fish trade in the UK, please see UK4043.

The multiple supermarkets have continued to expand their share of the retail seafood market. It is now estimated that supermarkets account for around 78 percent of frozen seafood sales, 59 percent of fresh/chilled sales and 48 percent of wet/smoked sales. However, supermarkets still face fierce competition from other outlets. For example, freezer centers are estimated to have increased their share of the frozen market by around 1 percent to 16 percent during 1995.

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Seafood

Total Edible Fishery Prods.

Marketing
Competitor Activities
Seafish's aim is to increase the total consumption of sea fish in the UK. As the organization's income derives partly from a levy on imported fish, Seafish's generic promotional activities help raise consumer awareness of all seafood products. National branding usually takes place in the higher value products, such as fresh and canned salmon, where consumers perceive a quality difference.

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Seafood

Salmon, Whl/Evisceratd

Production
General
Scottish farmed salmon production totalled 64,066 metric tons in 1994 (valued at USD 320 million), an increase of 31.5 percent on 1993. When estimates for Northern Irish and wild production are included, total 1994 UK production is estimated at 64,925 mt.

Total salmon production for 1995 is presently estimated at 68,200 mt, an increase of 5 percent over 1994. A further increase of around 5.5 percent, to 72,000 mt, is expected by the industry in 1996. It is interesting to note that the Scottish industry feels that its production capacity, assuming no disease constraints, would be around 140,000 mt.

Acquaculture Harvest
The number of ova laid down for hatching in 1993 increased by 21 percent to 68.7 million compared to 1992. Increased survival rates and improved growth rates are thought to be behind the drop to 46.7 million ova laid down in 1994.

It is estimated that 23.1 million smolts were produced on 113 Scottish sites in 1994 compared to 21.0 million smolts in 1993. Marine Harvest McConnell, owned since November 1994 by Booker, accounted for around 20,000 mt of farmed salmon production.

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Seafood

Salmon, Whl/Evisceratd

Production
Producers forward estimates anticipate an annual increase of 9 percent in smolt production in 1995 and 1996 (27.4 million smolts).

Production Technology
Scottish salmon farmers are increasingly using photoperiod adaptation to control smolting outside natural smolting times. Adult salmon generally spawn during the period October-December, with ova from these spawnings hatching around 12 weeks later. The smolts from these spawnings are put to sea a year later in the following Spring. (The standard terminology for smolts having spent 1 year in fresh water is S1 and those spending 2 years is S2). Natural smolting is driven by seasonal patterns of temperature and light. By light manipulation (photoperiod control) smolting may be advanced outside the natural smolting times. Using this method, smolts are available for relocation to sea water as early as 6 months after first feeding.

The advantage of using photoperiod adapted smolts in conjunction with normal smolts is that harvest schedules are made more flexible by allowing a continuous match of fish size with market demand. Although production period and feed costs in photoperiod adapted smolts may be reduced, additional costs for lighting and heating may be incurred.

In recent years furunculosis, a systemic infection, had been a major cause of mortality in salmon at sea. In 1994 a total of 20.7 million smolts were vaccinated against the disease. Sea lice are now the major disease problem facing salmon growers, but the industry expects a vaccine to be produced in the near future.

Consumption
Utilization Patterns
Consumption of fresh and frozen salmon totaled 24,148 mt in 1994 compared to 19,062 mt in 1993. Revised estimates from the smoking industry suggest that a further 24,000 mt went to salmon smokers. The final slaughter of salmon due to the MV Braer oil spill at Shetland in January 1993 accounts for the remaining 1,852 mt in the "other/loss" category.

UK household purchases of fresh/chilled salmon are estimated to be around 6,600 mt in 1994 compared with 5,500 mt in 1993. Whole salmon  accounts for around 36 percent of household purchases of fresh/chilled salmon. In the industry's opinion most of the rest of the large increase in domestic salmon

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Seafood

Salmon, Whl/Evisceratd

Consumption
consumption is accounted for by the catering sector, where salmon is a favorite. Industry sources confirm that no salmon was discarded during the year.

Substitution Patterns
Salmon continues to increase in popularity in the UK because of its widespread availability, its versatility and its falling price. Salmon is now estimated to be the third most popular fish after cod and haddock and is thought to be increasing its market share at the expense of other fish and other protein-complex foods, especially, according to the industry, beef.

Trade
Trade Trends
UK salmon imports at 9,140 mt were 10.8 percent higher than in 1993. The Faroe Islands, a minor supplier in 1993, was the largest supplier in 1994 at 3,543 mt. All of the Faroese salmon was fresh/chilled. Imports from Norway fell by 36.5 percent. Imports of U.S. salmon, all except 205 kg of it frozen, fell by 11 percent during the year.

Exports of UK salmon increased significantly by 32.8 percent as a result of increased domestic production and the competitive value of Sterling. Exports to France, which is by far the UK's most important market, increased by 20 percent, to Spain by 118 percent and to Belgium-Luxemburg by 39.6 percent.

Preliminary figures indicate that imports of salmon are likely to increase slightly during 1995, while exports, driven by increased supply are expected to rise by around 10 percent. Imports are thought likely to increase in 1996 because of increased Norwegian supply throughout Europe. Exports are also expected to increase as Scottish production rises again.

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Seafood

Salmon, Whl/Evisceratd

Trade
Factors Affecting U.S. Trade
Fierce competition from domestic and third country salmon are the major factors affecting U.S. penetration into the UK salmon market. U.S. frozen pacific salmon, with a customs valuation of USD 2.43 per kg, does have a price advantage over frozen Norwegian farmed salmon at USD 5.7 per kg. The customs valuation for fresh/chilled Faroese salmon in 1994 was USD 5.4 per kg. This would suggest that U.S. wild salmon is not well known in the UK market. It would also suggest that value added products should be directed at the UK market rather than expend promotional activity in a satiated sector.

Stocks
Stocks are estimated to have increased by 21 percent during 1994 to 1,150 mt or 2.4 percent of consumption. Absolute stock levels are expected to increase slightly during 1995 but maintain their proportionate levels.

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Seafood

Salmon, Whl/Evisceratd

Policy
Production Policy
The Scottish Salmon Growers' Association (SSGA) has repeatedly called for the UK Government to support its demands for the formation of a European Forum of Producer Organizations (POs). SSGA had proposed joining with its sister organizations in Norway, Ireland and the Faroes. Under the CFP, POs may be established with the aim of achieving agreement to control the production or marketing of salmon. A recent report on the Scottish Salmon Industry by the Scottish Affairs Parliamentary Select Committee stated that POs were not in the best interests of the industry. However, the Scottish Office has indicated that it will approve the establishment of POs, provided membership is voluntary.

Tariff Policy
The tariff on most imports of fresh, chilled and frozen salmon is 2 percent and is 13 percent on smoked salmon imports. There is also a minimum import price mechanism which has not been used since 1994. This was directed at imports of farmed, as opposed to wild, salmon.

Prices
The Scottish salmon industry expects prices to decline from October onwards as Norway increases its salmon slaughter rate. If a glut occurs on the European market, the Scottish and Irish industries are expected to call for the imposition of minimum import prices.

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Seafood

Salmon, Whl/Evisceratd

Marketing
Market Development Opportunities
The bulk of salmon purchases in the UK are of fresh product. Therefore, for U.S. non-canned salmon to have a larger share of the market it has to engage in product differentiation. According to a recent survey, 73 percent of UK consumers thought Scotland as the source of "best salmon". One percent of consumers placed the U.S. in top position.

Canned salmon was the original convenience food. Innovations in food processing now allow salmon to be transformed (like poultry meat) into a range of convenient, consumer-friendly products. Market development should therefore focus on added value products such as salmon nuggets and salmon burgers. Such products are ideally suited to both the retail and catering markets.

Presently, except for smoking and some ready meals, farmed salmon is not being further processed in ways that other fish are. The U.S. industry therefore has the ideal opportunity to develop a new and potentially large market.

In illustration of this point, the following extract is from the Scottish Affairs Committee report:

"There may have been an understandable shudder among Scottish Salmon Growers' Association witnesses at the mention of the prospect of "Salmon McNuggets". But Scottish industry representatives appeared reluctant to accept the need for a strategic shift in marketing beyond fresh whole fish, or fillets and steaks in portions, or smoked salmon and towards the concept of high quality added value products. ...We...recommend that Scottish salmon producers seriously consider innovative product development".

Competitor Activities
Since the early 1980s the primary focus of the salmon trade associations (Scottish Salmon Growers' Association and Shetland Salmon
Farmers' Association) has been on building the salmon market and on creating and developing a brand position for Scottish salmon. This has been achieved through the Scottish Salmon Board (SSB), which has utilized its "Tartan" quality brand mark in the UK and the "Label Rouge" in France. Both of these quality schemes have been managed by Scottish Quality Salmon and Shetland Seafood Quality Control.

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Seafood

Salmon, Whl/Evisceratd

Marketing
Funding for the SSB has come, almost equally, from voluntary subscriptions from salmon producers and Highlands and Islands Enterprises (a government agency). Marketing expenditure in 1994 was around BPS 2 (USD 3) million.

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Seafood

Salmon, Canned

Production
There is no canned salmon production in the UK.

Consumption
Utilization Patterns
Total consumption of canned salmon was static in 1994 at an estimated 23,815 mt compared with 23,810 mt in 1993. Around 90 percent of this is thought to be consumed in the home. Competition from other fish, especially frozen and canned has meant that retail canned salmon prices have had to be competitive to maintain sales. Consumption has been assisted by the increase in the price of canned tuna, which made canned salmon more attractive.

Based on present data, consumption is expected to fall by around 3.8 percent in 1995 and by a further 1.8 percent in 1996. This is due to the maturity of the canned salmon market in the UK. Most industry observers suggest that changes in the variables (competition, demographics, price, etc) affecting the canned salmon market are likely to reduce, rather than increase, sales.

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Seafood

Salmon, Canned

Consumption
Substitution Patterns
Tuna continues to be the most popular canned fish in the UK, accounting for approximately half of all canned fish sales by weight. Tuna dominates the UK market because of its competitiveness and versatility and because of the high degree of value added innovation.

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Seafood

Salmon, Canned

Trade
Trade Trends
The major suppliers of canned salmon to the UK continue to be the U.S. and Canada. In 1994, total UK imports amounted to 19,163 mt compared with 24,928 mt in 1993. This fall in total imports was due to a large domestic stock release as opposed to a fall in demand. In 1994, the U.S. had a 54.7 percent share (65.4 percent in 1993), and Canada had a 38.4 percent share (28.8 percent in 1993). Up to June 1995, the U.S. had a 70 percent share of British imports and Canada a 24.1 percent share.

Imports are expected to total around 23,830 mt in 1995, higher than in 1994. But following the declining historical trend, a further fall is expected in 1996.

The UK re-exported canned salmon to 16 countries during 1994, with 57.3 percent going to the Irish Republic and 23.1 percent to the Netherlands. Exports are expected to remain minor.

Factors Affecting U.S. Trade
The level of exchange rates and the availability of salmon in the U.S. and Canada are the major factors affecting U.S. trade in canned salmon. Competition from added value canned fish is likely to become a more important factor in this sophisticated market.

Stocks
Stocks of canned salmon are now thought to have declined to around 1,000 mt due to large stock releases during 1994 (see UK 5017). Stock levels are expected to increase during 1995 as companies replenish their inventories.

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Seafood

Salmon, Canned

Policy
Tariff Policy
The 5.5 percent tariff on canned salmon is unchanged by the GATT agreement.

Prices

The above table shows the average landed prices for canned salmon from the U.S., Canada and other (non-EU) countries. Up to May 1995, the average price of U.S. salmon was running close to the 1994 average and was significantly below the cost of Canadian salmon.

The following table gives sample supermarket prices for canned red and pink salmon. It should be noted that retail prices can differ widely.

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Seafood

Salmon, Canned

Marketing
Market Development Opportunities
Varietal development has continued apace throughout the canned fish market, with the notable exception of the canned salmon sector. Tuna, pilchards and mackerel are now available in a wide selection of sauces and added flavors. This increased added value has not only provided the existing consumer with increased choice and convenience, but has encouraged younger age groups to purchase what is often considered an unexciting product. The closest canned salmon has come to this development is the introduction of boneless and skinless canned Canadian salmon by the large retailer Marks and Spencer. This own label product is sold at a premium with distinctive labeling.

With technical developments across the seafood industry providing the consumer with more choice and added convenience, canned salmon is ideally suited to developing added value products. It is believed that focusing market development efforts on these trends will yield substantial results.

Marketing Channels

The UK canned salmon market is dominated by 2 established British brands: John West with a market share estimated between 35 and 40 percent, and Princes with an estimated market share of between 15 and 20 percent. Both John West and Princes are considered to be premium products, with their market position maintained by brand promotion. John West's parent company Unilever, which had been considering selling the business, has decided to remain in the canned salmon business. Industry sources feel that John West will now seek to capitalize on its brand name, which covers all canned fish, through innovation and product development.

The importer, Haigh Castle, continues to have a red salmon market share of around 10 percent. Haigh Castle's product is often sold through discount stores.

The supermarket groups continue to develop their own brands and they are the greatest threat to John West and Princes' dominance. It is estimated that supermarket own labels have a market share of around 30 percent by volume of both red and pink canned salmon.

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Seafood

Salmon, Canned

Marketing
Competitor Activities
The major competitor to Alaskan salmon remains Canadian salmon although Chilean salmon is becoming a more common sight in price sensitive stores. All of Marks and Spencer's canned salmon is Canadian origin and is labeled as such. (Marks and Spencer sells only high quality, own label products).

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Seafood

Groundfish, Whl/Evisceratd

Production
General
Groundfish landings (production) totaled 177,802 mt in 1994, compared to 176,027 in 1993, an increase of 1 percent. Haddock accounted for 45 percent of groundfish landings compared to 31.5 percent for cod.

Based on present data, groundfish landings are expected to increase to around 184,500 mt as a result of good weather during the spring and summer of 1995. A reduction in landings to more normal levels is expected for 1996.

Cross Commodity Developments
Although the total demersal catch was 2 percent higher in 1994 than in 1993, this figure hides some major movements within the sector. Declines were registered in landings of hake (-26 percent), dogfish (-18 percent), plaice (-10 percent), whiting (-8 percent) and lemon sole (-5 percent). These were offset by increases in the landings of haddock and anglerfish (+7 percent), sole (+6 percent), saithe (+2 percent) and cod (+1 percent). Other demersal fish catches increased by 15 percent during 1994.

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Seafood

Groundfish, Whl/Evisceratd

Consumption
Utilization Patterns
Consumption of groundfish in their whole form amounted to 9,874 mt in 1994 compared to 10,573 mt in 1993. This fall in whole fish consumption is thought to be due to the consumer preference for fish in ready to eat forms. Catering consumption is estimated to account for around 60 percent of groundfish consumption in whole form. As whole fish consumption represents such a minor component of total groundfish consumption, it is unlikely that there will be any significant upward shifts in consumption in this sector. It is expected that there will be a contraction in household purchases of whole groundfish, although the restaurant sector's demand for whole groundfish may increase slightly.

Note: The "other use" category includes fish going for further processing, and fish going for non-food use.

Trade
Trade Trends
Imports of whole groundfish totaled 62,072 mt in 1994, an increase of 6.5 percent on 1993. This increase is thought to be due to increased demand from processors. Of these imports, 26.9 percent were of fresh cod and 36.9 percent were of frozen cod. Total haddock imports accounted for 30.8 percent of whole groundfish imports. The rest was made up of a combination of coalfish, pollack and hake. Increased production of groundfish is expected to reduce import demand by around 6 percent in 1995.

Exports, of which 58 percent were of cod, totaled 17,752 mt in 1994, compared with 16,656 mt in 1993. Preliminary figures indicate that exports are likely to fall by around 16 percent during 1995 because of increased domestic demand for processing. A further small decline in exports is expected in 1996.

Factors Affecting U.S. Trade
Whole groundfish imports from the U.S. amounted to 20 mt in 1994 compared to 13 mt in 1993. Of 1994 imports, 308 kg were of fresh cod and 20,031 kg were of frozen alaska pollack and pollack. Customs valuation data shows that U.S. cod had an average landing price of USD 5.19, more than double the average.

This suggests that U.S. cod was filling a niche with quality product. However, U.S. origin pollack, valued at USD 0.56 per kg, compares very favorably to the import average of USD 1.33 per kg. The Dutch were the largest suppliers of pollack with 50.5 mt (USD 0.57 per kg), followed by India with 34.9 mt (USD 2.24 per kg) and Poland with 33.7 mt (USD 0.71 per kg).

Report Code: UK9554A
AGR Number: UK5075
Page: 29
Seafood

Groundfish, Whl/Evisceratd

Stocks
Stocks of whole groundfish were estimated at 6,530 mt at the beginning of 1994 and rose by 7.2 percent during the year to close at 7,000 mt. The stock level is not expected to alter significantly in the short term.

Policy
Resource Management and Production Policy
Aspects of the EU's CFP and TACs are discussed under the Total Edible Fisheries section.

Report Code: UK9554A
AGR Number: UK5075
Page: 30
Seafood

Groundfish, Whl/Evisceratd

Policy
Tariff Policy
The following table shows the EU's GATT tariff reductions.

In addition there are the following Tariff Rate Quotas in operation from January 1 to December 31:

Report Code: UK9554A
AGR Number: UK5075
Page: 31
Seafood

Groundfish, Whl/Evisceratd

Prices

Report Code: UK9554A
AGR Number: UK5075
Page: 32
Seafood

Groundfish, Whl/Evisceratd

Prices

Marketing
Market Development Opportunities
Although consumer purchases of whole groundfish are limited, there are opportunities for supplying major supermarkets with whole fish at times when quality fish is not available domestically. Whole groundfish is also required in the catering sector, but again, in limited quantities.

Most whole groundfish are utilized by fish processors who convert the fish into fillets and other value added products. These companies purchase fish on a combination of price and quality.

Report Code: UK9554A
AGR Number: UK5075
Page: 33
Seafood

Groundfish, Fillets

Production
General
The total weight of groundfish fillets produced in the UK in 1994 amounted to 62,362 mt compared to 63,834 mt in 1993. For the purposes of this analysis, fillet production includes fresh/chilled/frozen natural fillets and further processed fillets such as battered, breaded and fillets in sauce. Smoked fillets have not been included in this aggregate.

It is expected that groundfish fillet production will increase in tandem with increased groundfish supplies during 1995; initial figures suggest an increase of around 3 percent during 1995. A decline in production is then expected in 1996 to around 62,900 mt.

Production Mix
It is estimated that one-third of groundfish fillets by weight are for the fresh/chilled trade. The rest is frozen after being processed.

Report Code: UK9554A
AGR Number: UK5075
Page: 34
Seafood