European Fish Auction DataNet

Transcription

1 REPORT June 2005 European Fish Auction DataNet an EC supported trans-national innovative action PARTNERS CCI Quimper Cornouaille European Association of Fishing Ports and Auctions Visafslag Den Helder & Den Oever Zeebrugse Visveiling

2 Contents Executive Summary 1 Conclusions 2 Recommendations 3 Fish Auctions of Europe s Atlantic Coast & North Sea Historic Development of Fish Auctions 5 Current Fish Landings & Auctioning Western Europe 7 National fish sales practices and auctioning Overview 12 Norway 14 Denmark 18 Germany 21 Netherlands 22 Belgium 24 France 25 Spain 27 Portugal 29 United Kingdom 31 Ireland 34 Inter-Regional and cross border Comparisons Ownership and governance 35 Services 36 Auction Operational elements 37 Technological application 40 e-auctions 41 Charges 42 Challenges Activity Reduction 43 Price & Cost Factors 46 Imports 47 Marketing 49 Traceability Overview and Requirements 50 Developing value adding traceability 58 Auction Quality label branding 60 examples Boxes 63 Information Exchange Practical limits 66 Pilot 76 Appendices List of Fishing Ports and Auctions EU Atlantic & North Sea 79 Questionnaire (see also for results) 86 National Statistics 95 Examples of Price Information Published by Auctions 103 EEZ Demersal Catch Trends (see Presentation to Seminar (see PP.ppt) 110 Conclusion: e-auction development by Dominique OUDIN 111 Conclusions: Le Système des Criées en Europe: Marc-Vincent FUHLHABER 112 First sale prices at 2004 prices for different species 115 Examples of quality labels applied to fisheries (and aquaculture) 116 Expert Visits 117 PAGE

3 Executive Summary The project has identified some 330 first sale fish auctions located on the Atlantic and North Sea coast of the EU 60% more than had been estimated before the study. However around 80% of the marketed fish passes through a fifth of that number and this centralisation is likely to continue due to commercial pressure and the need for critical mass in both supply and demand. The specialised fishing ports and auctions are in a critical financial position having experienced a fall in activity and income in excess of 40% over the past 15 years. Economic reality and changing market pressures exacerbate the need for rationalisation and cooperative actions. Auctions have a long history within communities and change has socio-economic implications. Port fish auctions provide a wide range of support services beyond simple sale of fish. Auction is confirmed as the producer s method of choice in selling their catch. In four of the countries included in the study it is in fact mandatory. Thus port auctions play a critical and central role in the marketing of fish this fact is not recognised in the Common Organisation of the Markets (COM) in Fishery and Aquaculture Products (2002). We consider that such omission should be rectified at the earliest opportunity and the role of auctions should be an explicit inclusion. Although there is recognition that information exchange is desirable and could be of use in stabilising market supply and prices, there is an underlying reluctance to participate that owes much to protectionism and perceived self-interest. Thus, although the pilot data-exchange demonstrated that it is feasible to consolidate and exchange data on supply and prices in an automated way, the benefits of this need to be demonstrated over time and include main core participants. The Fish Market is globalised and Europe s auctions are affected by this. The legal requirements on traceability are met by auctions. Wider traceability concepts (i.e. beyond the legal minima) have not been widely adopted although it is recognised that these link with quality and labelling issues. When examining traceability we concluded that these added value aspects should only be embraced where there was clear potential to increase earnings (fish prices) as a result. This requires a sound marketing strategy (as exampled by Celeiro). The establishment of a species based EAN codification under EAFPA is desirable. A clear message arising from the study is that, to survive and thrive, the fish auctions of the western seaboard of the EU must capitalise on the quality and diversity of fish that are landed. Quality, of which freshness is a major but not the sole element, must not only be there but be demonstrated and accredited. Actions to establish fresh EU captured fish as high value, desirable products need to be initiated now to stem and reverse price erosion in the face of alternatives from around the globe. These have to deliver resultant price increases to producers not just add profit to food retailers. Cooperation between ports and auctions should be encouraged and a pan-european approach to aspects such as logistic management could produce industry benefits. Auctions, as the principal provider and distributor of reusable boxes, could play a role in reducing the use of environmentally unfriendly single use polystyrene boxes. As users they should be leading the development of box (lot) identification systems such as RFid. The financial straits that auctions are currently experiencing inhibit participation in such developments. Nonetheless it is considered that such programmes should involve the auctions, perhaps through their trade organisation EAFPA. To build upon the outcomes from this project it is hoped to extend it to include the Mediterranean, Baltic and EEA partners of the NE Atlantic Ocean. Identifying common problems can lead to innovative proposals and common solutions: funds permitting. 1

4 CONCLUSIONS The Atlantic seaboard (including the North Sea) is well provided with fish landing places and active port fish auctions of varying size and degrees of sophistication. o They are dispersed on the littoral and, with the fishing fleets that they serve, are often the main centres of employment with an important socio-economic role. Reduction in activity threatens their viability which is often, at best, fragile. Fleet decommissioning has been supported under Fishery Funds Specialised fishery ports and auctions do not have this option Location mean limited scope for alternative use of infrastructure A major part of the cost is fixed (i.e. not activity based) o This can not be recovered from a reducing fleet Where auctions, and their fishing ports, are no longer viable they require o Assistance to enable sensible rationalisation and possible change of direction This could be closure, consolidation or transfer of the auction activity Including combining with others in a single entity (possibly dispersed) Retaining necessary functions and services locally Seeking new areas of operation and diversification within the industry Auctions provide a range of essential services not just the sale of fish o These are necessary to the producer activity whether the fish is auctioned or not The cost of such services is often hidden within the auction fee o Economies and efficiencies could be achieved by the adoption of common tools Non recyclable boxes replace reusable auction boxes after the auction sale EAFPA members have an inter-auction box management protocol o This would allow extended use of reusable fish boxes Auctions are the principal owners and providers of reusable fish boxes Lot identification is currently by (loose) printed ticket o Integration with logistic management schemes is possible Supermarkets and others specify box identification Auctions must be (at least) an equal party in a solution Changes in market circumstance are creating additional tensions within the industry o Globalisation and centralised buying make auctions susceptible to demand swings Supply difficulties have resulted in buyers increasing imports Price capping applies for volume market supply o Prime quality products can command higher prices Quality accreditation is limited to niche markets Auctions are the method of choice (by producers) for the sale of fresh fish o Auctions undertake the organisation of the market and sale of the catch Auctions are de facto held responsible for quality by the buyer The dynamics between supply and demand have been weakened by supply instability o Auctions have the potential to establish strong cross border supply mechanisms A counterbalance to (inter)national corporate buyers is currently lacking Port (first point of sale) fish auctions perform a vital role in the marketplace. Auctions recognise that the industry is now globalised and are responding to this: new challenges emerge and auctions must continue to meet these and adapt accordingly. The cost of doing so from a reduced income base is an issue but the cost, to the industry, of not doing so is critical. 2

5 RECOMMENDATIONS The role of auctions should be made explicit within the revision of the COM o This should include de facto marketing role of auctions o EAFPA, as the sector s representative, should have a substantive seat on ACFA The price obtained for EU captured fish must be improved o This can only be with positive, cohesive and directed marketing across Europe. o It should be promoted as quality products from a natural and sustainable source. EAFPA, as the representative of port auctions, should take a lead in this. PO s should be natural allies and partners in such a programme o The EC should participate in and fund such an initiative A generic quality labelling scheme should be established that: o Identifies EU captured fish as a quality product That has been captured by an identified fleet Landed and distributed through an accredited port auction EAFPA should establish a species based EAN code structure o This should then identify the port auction as a source Support for diversification and redirection of port and auction assets is needed o A European strategy for fishery infrastructure and marketing is required Networking of landing ports and auctions into viable units should be assisted Ports and Auctions should be more widely involved, as an entity, in the industry o EAFPA should take on this role at the European level Through active participation in Regional Advisory Council s and ACFA By undertaking initiatives that promote the interests of the sector In particular through actions that improve marketing potential o Raising fish prices through quality programmes Working with other sectors of the industry to common cause In cooperation with the European commission An integrated reusable box management scheme should be extended to all users: o This should include establishing box designs suited for use from ship to shop Unique numbering or identification should be explored using technology Due to the potential ecological benefits EU funding should be available EAFPA, as a not for profit organisation, should be the coordinator o Actions should be integrated with marketing and trace/tracking RFid and EAN bar codes should be included The information gathered in this project should be maintained, updated and extended o The EFAD study should be extended to include The non EU countries of the EEA Norway, Faroe isles and Iceland The countries of the Baltic and also the development of markets there The Mediterranean both EU countries and 3 rd country exporters to EU The function and role of inland wholesale markets and major import zones 3

6 European Fish Auction DataNet A core objective of the project is to improve the understanding of the role of fishing ports and auctions on the Atlantic and North Sea coastline of the EU and to place this in context within the capture fish industry of Europe. To do so the location and number of fishing ports, and their associated fresh fish auctions, has been established [appendix 1]. Hitherto, in marked contrast to the fishing fleet itself, there was no register of fishing ports although national legislation may prescribes certain ports of landing for specific activities (e.g. for the landing of cod, pelagic species or other controlled group, or to govern times of landing for monitoring purposes). Certain statistical data on fisheries must be compiled by member states. Indeed most states publish annual reports on fishery activity but this does not always include analysis by port of landing or information on the method of sale: only the quantity of fish (weight) and first point of sale value. Nonetheless the information published by national bodies, both governmental and private, provided reference data and the FAO databases were a valuable source of background data on catches. At the outset it was thought that across the 9 EU countries having coastlines on the Atlantic and North Sea the number of fishing port auction locations would not exceed around 200. This estimate proved to be quite inadequate the actual number being considerably more with 330 identified locations where fish is landed and sale organised, even if at another location. In addition there are numerous small landing places from which artisan inshore fishermen operate day to day often with static gear. Although important to individual fishermen these are not fishing centres, have limited, if any, resources and can be considered as outstations of local ports and harbours: as such they have been omitted from the port list. Like the rest of the industry, fishing ports and auctions have experienced a sustained period of change and this continues. Centralisation of effort in more powerful vessels, the growth in imports of fish and fish products, changes in the retail process and instability in Total Allowable Catch (TAC) levels all impact upon port and auction activities. Two factors remain fundamental: fishing vessels need a suitable place to land their catch and the auction process is the principal method of sale for fresh fish and establishment of market prices. Challenges exist and shall continue to arise - it is the opinion of the writers that by embracing these and adapting to them that the fishing port structure and associated fresh fish auction system can, and should, continue to be a foundation stone for the industry. As a sectoral study we have looked at general trends and actions. Individual auctions have been considered only to illustrate practices. Future actions suggested or recommended herein are also where, acting in concert, the sector (auction) should initiate actions or participate in joint ventures and research. Given the global nature of supply, and the influence of centralised buying, these need to be both coordinated and transnational. 4

7 FISH AUCTIONS OF EUROPE S ATLANTIC COAST & NORTH SEA Historic Development of Fish Auctions Fish auctions developed and have a form today that is affected by history. Fresh fish auctions were associated with the fortunes of their home fishing ports (or vice versa). Changes in production methods, supply globalisation and the influence of the EU have spawned many changes that impact upon this fundamental precept. Generally the emergence of auctions for fresh fish, as opposed to a simple forum where local fishermen sold to local people, occurred over the past years and was the result of a combination of (i) improvements in transport that enabled fresh fish to be moved from coastal regions inland to the populous cities and (ii) the growth in catch levels of demersal species as fishermen switched from pelagic fishing where the fish was for canning or salting. Fish Grading for salting circa 1900 The basics of an auction hall: display, individual purchase of lots and a fish exchange. These are as relevant today as 100 years ago. The fabric has changed but not the fundamentals. Fish Market (Blyth England) circa

8 The development of a mixed demersal fishery meant that instead of large volumes of a virtually homogeneous product that would be processed on being landed (e.g. the salting of herring in barrels, production of klipfisk or canning of sardines) there was a wide variety of fish. Rail links from port to city enabled fish to be supplied fresh to the consumer. As a consequence the relatively few merchants that had traditionally dealt with the blue fish were supplemented by many, many retail fishmongers. To regulate such trade fishermen needed to organise how they sold their catch. Drawing on the experience of the agricultural sector the auctioning of fish was almost universally adopted. In some countries these were institutionalised with a legal status but elsewhere they stem from cooperative action by the fishermen. Of course the ownership and management of fishing ports and the physical assets therein often affected the establishment of auctions. Different models were established with the harbour auction and related services organised and delivered by single management bodies responsible for all aspects through to multi-corporate structures that, together, provided infrastructure and services. Independently across Europe the selling of fish became a specialised activity. The establishment of the EU and adoption of common standards greatly influenced more recent events and coincided with the emergence of an ever more global market in fish and fish products. With the move to open competition with new markets it was a natural development to invest in fishing vessel construction and fishing efficiencies. Bigger and more powerful boats were introduced and landing patterns started to change. Both required upgrading in port, auction and distribution facilities. Assistance was available under EU schemes (FEOGA and FIFG) in adapting to these changes whilst, since 1983, fleet rationalisation was addressed with a series of MAGP. This process continues and new challenges emerge. At a basic operational level common requirements were not always dealt with in the same manner: for example fish continuing to be sold by the box (of nominal weight) whilst elsewhere the fish is accurately weighed before sale and bought by the kilogramme. Even within the new standards on size, fish is sorted to suit the local market expectation resulting in intermediate sizes. Of course from a marketing position such variations are essential but it can make interregional comparisons difficult. Thus, even after decades of applying the same regulations, it clear that historic practice still influences current procedures and auction models today However these differences are superficial and irrespective of the agency or organisations involved the need for dedicated fishing ports (or facilities within ports) and sale of fresh fish throughout Europe today face virtually the same challenges in a rapidly changing industry. The impact of these are perhaps most immediately apparent where fleet or quota change bites hardest but the real changes are perhaps yet to come as technological and commercial pressures combine and question traditional ways of operating. 6

9 CURRENT FRESH FISH LANDINGS AND AUCTIONING: WESTERN EUROPE By its nature, fishing has developed within communities located close to the fishing grounds. These are (often) remote from other centres of industry and as a consequence fishing is the primary employer and critical to the survival of the community. We have identified fish landing ports and associated auctions and these have been compiled into a contact reference to be extended and maintained (see list.htm). The general location of identified fish landing ports by country is indicated below

10 CONCENTRATION OF SUPPLY Analysis of fish landing by location reveals that although there are a large number of landing sites and points of sale the majority of these either cater for local demand and/or are engaged in selling on contract or exporting for sale (e.g. shellfish in Ireland and UK). Across Europe a relatively small number of ports and auctions act as the main distribution and trade platforms for fresh fish for human consumption caught by the EU fleet. These key locations serve a varied fleet from inshore day boat through to industrial trawler. With greater volume and fishing trips from hours to weeks there are not only more species (usually) to be dealt with but also a wider quality range. As such operational and commercial pressures, and how these are dealt with, can be explored through practices at these key locations. Fresh fish landings at principal ports By looking at a selection of these in more detail, identifying common practices as well as where they differ a better understanding of the interface between the producer and downstream activity is sought. To obtain supplementary information a questionnaire [appendix 3] was issued (by and post) and the responses assisted in identifying aspects that should be further explored. To expand upon this expert visits were made to 5 specific locations: Sesimbra (P); Celeiro (ES); Concarneau (F); Oostende (B); Den Helder (NL). For the majority of fishing activity vessel operators select a landing port and auction as an entity. However where a fleet exploits a fishery that is several days steaming from their base they may well choose to operate from a port closer to the fishing grounds. 8

11 Several examples of this exist and have resulted in sophisticate logistics and even a symbiosis between ports sometimes thousands of kilometres apart. Operating from a base close to the fishing grounds permits the producer to make shorter trips and supply fresher product on a regular basis. Examples of such transference of activity are: Urk registered trawlers landing their catch on the sea coast (e.g. Den Helder) with the catch being delivered by road to the inland auction at Urk. UK vessels landing their catch at ports in NW Scotland and sending the catch for sale at Peterhead (300 kilometres distant) or Grimsby (700 km) Nephrop catchers from Northern Ireland landing into SW Scotland and sending the catch back by road & ferry to their contract buyers. Trawlers from Boulogne and Brittany that operate from NW Scotland (Lochinver) but continue to sell their catch in their home ports. NB the port of Lochinver has more French quota fish landed at it than all bar the largest French ports. Elements of the Grand Sole fleet that land their catch into ports in NW Scotland or Ireland and send the catch back to Pais Vasco or Galicia for sale (by truck up to 3000 km). Spanish vessels landing at Douarnenez in Brittany, France which has also seen Irish and Scottish landings with the fish generally consigned elsewhere for sale. Belgian beam trawlers operating in area VII landing at Milford Haven in Wales or when fishing area VIII into La Rochelle. In the above examples producers have separated the cost and efficiency of fishing effort (adoption of operating bases close to the grounds) from marketing. In the former aspect they have worked with port operations and others to maximise benefits but in the second (selling) phase it is clear that the preferred route is to rely on a known outlet. It is difficult to fault this given the fact that, in virtually all cases, the selected point of sale is a lead auction in that country and for the species being delivered. Although this concentration of supply (for sale) grew from the historic base of fishing vessels the need for producers to secure the best price may challenge this. Reducing catch levels has created a drift towards main centres where there is a sufficiency of buyers to support prices. Fish attracts buyers and vice versa. In a free market economy this would result in winners and losers (auction closure) but socio-economic factors, community loyalty and tradition, influence the process. Undoubtedly there is a need to support the many small fishery dependent communities on the ultra rural coastline of Europe and also to ensure the continuance of safe havens and landing places for the tens of thousands of small fishing vessels that operate in coastal waters. How this can be achieved cost effectively and without, simultaneously, diluting both demand and supply is a problem that must be addressed. There are few ports or auctions that are overtly and actively engaged in attracting custom at the expense of others. Instead they strive to become centres of excellence and provide economies of scale whilst engaged in meeting regulatory and fleet disposition changes. Nevertheless market forces prevail. Where there is geographical closeness (e.g. within a CCI s remit or membership of fishermen s guild) there are some initiatives to combine supply and the auction process. Similarly where there is commonality of management or process and, to a degree, this can even extend to cross regional or international cooperation. The rational, at present, for most of these actions appears to be resource based (systems, management, services and equipment) and not marketing related. 9

12 CONCENTRATION OF DEMAND Demand concentration operates at three levels the most evident, and common measure of an auction s dynamism, is the number of buyers attending auction sales. There is also the concentration, historically linked to past fish landings, of fish processing in specific areas or communities and also, a more recent and largely uncharted phenomenon, the dramatic shift of fish retail sales to a small number of supermarket chains. For an auction to be successful there must be more than one buyer bidding; both experience and theory support the contention of the more (buyers) the better. There is generally a correlation between the number of buyers and the volume and diversity of supply. Therefore as supply diminishes so too will the number of buyers as the expectation that their needs can be met at a reasonable price fades. The more remote the auction is the more rapid will be a transfer of interest by buyers. Historically fish processing became established where there was an abundance of fish. Even after the demise, or curtailment, of the fisheries that supported them a strong processing sector can continue and will draw supplies from elsewhere. Examples of this are the Humber (Grimsby/Hull) in UK that, despite the loss of access in the 1970 s of the Icelandic cod fishery on which fish processing was based, continues to process in excess of 30% of UK s fish [80% into frozen products] with less than 5% of the UK catch landed there. Both Hull and Grimsby operate fish auctions that are based on internal UK consignments and imports. Urk in the Netherlands has a robust fish processing industry that is clustered around what is now, effectively, a land locked auction and Lorient (France) processes three times the quantity of fish that passes through its auction (5 times that landed at the port). Thus auctions can survive and gain strength from a strong local buying presence even without adequate local supply. Of course processing does not always survive changes in fishing and landing patterns e.g. tuna canning in Concarneau. The most dramatic changes resulting from demand concentration may yet be to come. Steadily, over the past 20 years, supermarkets have gained increased share of food retail. In northern Europe supermarkets now have around 70% of all seafood sales (in the UK it is estimated at 87% [SFIA]). At the same time supermarkets have merged and operate internationally: a very small number of chains have a dominant position. Thus far supermarkets have sourced their fresh fish through third parties and there is no direct evidence that they have distorted the wholesale market. Nevertheless it is axiomatic that with a small number of end buyers (i.e. the national and international supermarket groups) setting upper prices to be paid to their suppliers merchants and processors there must be price capping at the auction. Lower prices for the consumer feed back to lower prices paid to the producer. Supermarkets are here to stay. To minimise costs and establish clear requirements with sources of supply it is standard supermarket practice to have as few intermediaries and points of contact as possible between the producer and their organisation. Auctions must recognise this and form their own strategies accordingly. In so doing it must be noted that supermarkets purchase fish (indirectly at present) through many auctions and across national boundaries. Individual auctions are unlikely to be in a position to meet all of a supermarket chain s needs. Solutions and ways of working to maximise benefit for all parties whilst retaining the essential transparency and fairness of the auction may require a pan-european approach. 10

13 IMPORTS AND FISHING PORTS & AUCTIONS The EU imports some 9 million tonnes of fish each year (Eurostat Fisheries Yearbook: 2004) and is a net importer of 3.6 million tonnes valued at just under 11 million euro. As an entity the EU is the largest importer of fish in the world. Most fish imported for human consumption is frozen or processed, although significant amounts of fresh fish are shipped, trucked or even air-freighted in. Although the volume of fresh fish is relatively low it is often in direct competition with fish captured by the EU fleet. Indeed within the European market for fish the fresh captured product overlaps and competes with frozen products and, increasingly, with farmed fish which is often a substitute for fresh fish. The vast bulk of imported fish is pre-sold to large scale processors although important volumes are sold through the inland wholesale markets. Fresh fish imports These are mainly from the EU s near neighbours and members of the European Economic Area. Some auctions have specialised in providing a point of sale for fish from Iceland, Norway and the Faeroe Isles and a few ports receive fish landed directly there by boats from these Scandinavian countries. The bulk of fish coming into the EU from these countries has already been landed in the home nation and is brought in by carrier vessel or via ferry. Because of proximity the port of Scrabster, on the northern coast of Scotland receives thousands of tonnes of fresh fish from the Faroe Isles each year this being landed by both catcher and carrier vessels. Most other Scandinavian fish is shipped by sea container (or truck from Norway) and enters the EU via one of the ferry ports: Hanstholm, Hull (Immingham), Hamburg, Rotterdam. As a result of imports and consigned fish there are significant differences between sales and landings at several main locations. Prices can also differ to a significant degree: the following is a snapshot that does not purport to represent an ongoing relationship but does reveal the extent of price variation across markets for the same species on the same day. prices taken from published data for COD MONKFISH PLAICE NORWAY ICELAND PETERHEAD GRIMSBY HANSTHOLM URK OOSTENDE Mercabarna $= NOK= DKK= = Only part of these differences in price can be accounted for by transport cost, currency exchange rates or handling margins and it suggests that, although global, the market is far from prefect. Better cooperation on marketing between the responsible parties in each country should be encouraged to maximise overall price achievement. 11

14 COMMENTARY ON NATIONAL FISH SALES PRACTICES AND AUCTIONING The European Code of Sustainable and Responsible Fisheries Practices (European Commission 2004) sets out standards of behaviour for the fishing sector to favour and preserve healthy marine ecosystems and to carry out fishing activities responsibly. The Code identifies several aspects (under marketing) that are underlined by this study namely to: give priority to quality; provide advance information on unloading of catches and to give priority to selling or to recording sales at auctions. The extent to which this is achieved varies nation to nation and between different fisheries. Although sale by auction is regarded as the fairest and most transparent method it is recognised that other forms of sale are valid and, in certain circumstances, may even be more appropriate. In the largest fishery sector, white fish, the vast majority of the catch is sold through port auctions. In some countries sale by auction is mandatory Spain and Portugal by statute with Belgium and the Netherlands by industry/ministerial agreement (excludes frozen at sea). Pelagic A large part of the major northern pelagic fisheries have remained outside of the auction system with direct sale to processing factory the norm. This may be by direct negotiation or under contract and may involve auctions as mediator, drawing upon the commercial experience and skills of professional parties, or be undertaken by the Producer Organisation. An interesting development is the pelagic auction operated by Norge Sildesalslag that sells the catch while the vessel is still at sea ( The fact that modern purse seine trawlers may have several thousand tonnes of the same species of fish on board in RSW tanks lends itself to this approach but the principles could be applied to other fisheries. Smaller scale pelagic, for the fresh market, is usually sold at auction. Day and multi-day fishing for anchovies, sardine, tuna and even herring and horse mackerel in fact form the bulk of species for sale at many auctions on the Biscay and Spanish/Portuguese Atlantic coastline and archipelagos. Shellfish The shellfish crustacean sector, in which UK and Ireland as producers have a dominant position within the EU (e.g. Nephrops 70% of the EU catch) has unique requirements namely to deliver fresh (preferably live) to the end markets. Crab and Lobster need vivier facilities, as does live Nephrop, and the logistics of transport are critical. Although there are ports where significant volumes of product are landed a major part of the catch is by smaller vessels, often day boats that operate from many small ports. Sale by auction has largely given way to sale under contract to buyers that collect or even direct sale by fishermen groups to remote markets. Where sold by contract the fisherman is paid a pre-declared price based on the quantity (weight) of each size that the processor achieves and packs. Multi-day catch of Nephrops is usually destined to be frozen by the processor. The principal consumer markets are in France, Spain and Italy. Although 25 years ago sale at auction was common for Nephrops in the UK this day to day pricing fell into misuse and was replaced by factory purchase on contract. The only real auction for Nephrops that operates in UK (Troon) is successful because it offers added value services with specialised sorting, weighing, packaging and despatch from SW Scotland to the buyers 12

15 premises these are up to 3000 kilometres distant and delivery of a fresh, iced product is within 2 days. Fishermen had been selling their catch on contract but transferred to this new auction (opened 1999) as it delivered improved, and transparent, prices. Molluscs are again sold directly to processors where captured in northern countries (where consumer demand is very low relative to supply). Conversely where there is good local demand and a number of competing buyers they are sold by traditional means: in France and Spain there are strong auction sales and cooperative ventures. To ensure maximum quality and saleability shellfish may need vivier, depuration or other specialist holding and distribution facilities. Where these have not been developed by fishermen or associated auctions but are provided by buyers the dynamics of supply and demand is likely to be affected. Demersal In value this represents more than 2 / 3 rds the fish captured by the North Sea and Atlantic fleets of the EU 15 and almost all (estimated at 95%) is sold through auction. If one assumes that the average weight of fish in a box is 40kg this is an average of a million boxes of fish landed every week. As the auction operators are, across Europe, the main provider of these reusable fish boxes this is an aspect that shall be returned to later in the report. Irrespective of species or fishery the public role of the landing place and auction is a key element in achieving comprehensive and consistent registration of landings. The dominant role of auctions in making the commercial interface between producer and processor/wholesaler/retailer attests to its acceptance by both parties (seller and buyer) of its inherent fairness. However it would be naive to assume that, despite its openness, this will necessarily continue. Economic pressures and the impact of technology and commercial trading methods are already threatening this. Thus far exceptions to auction sale have been due to specific factors: Individual boats fishing for specific species on a contract basis (e.g. Greenland Halibut [fletan noir] caught NW Scotland by a UK vessel for a Boulogne processor no local demand) Company vessels ( industrial fleet) negotiating their own sales and/or engaged in vertical supply to their own distributor and supermarkets. Boats fitted out to operate with reduced manpower, storing fish in litre insulated containers with bulk delivery to buyer which will then sort and weigh the catch i.e. this occurs where the norm is for boats to box (60 litre) at sea and there is no history of shore grading and re-boxing prior to sale. No auction available. What is clear is that where there is no independent and open market price making mechanism, many sellers and relatively few end buyers, the opportunity for buyers to dictate prices is increased. Buyers wish to purchase at the lowest possible price (and sellers obtain the highest) and in today s global economy the buyers have the greatest flexibility and so a dominant position. Auctions, where supply is concentrated and buyers forced to compete with one-another, jointly and severally can, and do, redress that imbalance. 13

16 COUNTRY PROFILES Norway Not a member of the EU but a VERY important source of fish into the EU and an important member of the EEA. Fish, for Norway, is a valued national resource. With a huge EEZ and access to important international fishing grounds Norway has developed a very modern deep water fishing fleet for both Pelagic and Demersal species. Many of these are factory freezer ships, trawl and longline. Of course Norway also has a large coastal fleet which produces high quality fresh fish both for local consumption and export - 90% of Norwegian fish is exported. Both pelagic and demersal species are sold by one of the six licensed fish sales organisations: this is generally through an interaction of minimum price mechanism with contract and auction. The minimum price is arrived at through negotiation with the buyers but, if agreement is not reached, the sales organisation has the right, in law, to set it! The auctions in Norway operate under Royal Warrant i.e. they are established, in law, as the first point of sale for fish. When the fish is landed, the sales organisation reports the landed quantity to the Fisheries Directorate which is responsible for maintaining the fisheries statistics. Settlements in Norway occurred by natural harbours and these developed into today s villages and towns. Ports have been subject to government control and regulation for hundreds of years and there was extensive development of fishing harbours in the later part of the 19 th century. Today there are some 750 fishing ports and more than 10,500 fishing vessels of which 20% (2,200 boats) are over 8 metres and these account for 85% of the catch by value. 14

17 Unlike in most of Europe the auction is not a large receiving building where fish is prepared for sale. With a huge coastline, numerous landing ports and few auctions it is a process without a central fish hall and so in many ways is in fact the virtual auction that computerised sales systems aspire to. Without sorting and distribution centres sale of full vessel catch to a single buyer (coastal factory) is a common practice: the factory may then sell on what it does not want. This practice of selling a boat s entire catch as an entity limits the scope for marginal premiums based on specialisation or niche markets. With fewer buyers the salesman must engage in negotiation (arbitration) to ensure best (fair) prices. 5,00 Norge Rafisklag 2004 Halibut /kg 4,00 Turbot eel 3,00 2,00 1,00 Bleike Skate Grenadier Dogfish Flounder Pollock Catfish Monkfish Ling Tusk mixed fish Redfish Black Halibut Salmon cod Haddock Saithe COD 0,00 reproduced from Norge Rafisklag statistics However the cost of transport to main markets (western and southern Europe), volume supply and a relatively closed market i.e. no direct bidding by EU buyers, mean that these prices are considerably lower than in the prime EU first sale auctions. Of course this, in turn, has the effect of constraining the EU market price. Pelagic Fish Auction operated by Norges Sildesalslag, a fishermen s economic interest group, selling the catch of its members (p.a. around 150,000 tonnes of mackerel and 140,000 tonnes of herring plus small quantities of other species say 300,000 tonnes p.a. in total). Today its auction is computerised (bespoke system developed by Schelfhout Computing [now Aucxis Trading Services] but this can be seen as a natural development from Fax, Radio, and Telex. Each catching vessel, when still at sea, reports what it has quantity and quality and its location. This information is available to buyers (Norwegian factories that have their own discharge quays first buyer must be Norwegian unless special dispensation granted) who then bid for the entire catch. The best bid is the highest NET of steaming time to the factory and back to the shoals. 15

18 Demersal Auctions are operated by 3 other agencies operating on an area basis of which two are dominant: Sunnmøre og Romsdal Fiskesalgslag in central Norway selling 250,000 to 300,000 tonnes of fish for around 250 million and Norge Rafisklags in the Northern half of the country (580,000 tonnes for 696 million). Breakdown by main species Norge Rafisklag Tonnes by Species 2004 Turbot eel Bleike Skate Grenadier Dogfish Halibut Flounder Pollock Catfish Monkfish Ling Tusk mixed fish Redfish Black Halibut COD Turbot eel Bleike Skate Grenadier Dogfish Halibut Flounder Pollock Cat fish M onkf ish Ling Tusk Series mixed fish Redfish Black Halibut Salmon cod Haddock Saithe Salmon cod Haddock Saithe COD Most sales are at a negotiated price although efforts are being made to develop dynamic auctions: not surprisingly this commenced with frozen at sea fish which does not suffer from the absolute need to sell on landing. Where auctioned the sale is by rising price and computerised but with phone bids and in cooperation between Norges Råfisklag and Sunnmøre og Romsdal Fiskesalgslag. The auctioning of frozen fish is more widely applied than fresh but increasingly fresh fish is being auctioned. 16

19 Essentially the fish is being bought for export. This could be as whole fish; fillet; processed, frozen, salted or canned. With thousands of kilometres of coastline and many landing ports buyers are remote and buying against a catalogue and this is reflected in the auction system. There are also local markets where fish is sold by inshore fishermen direct to the public or to local fish merchants. The standard of documentation and openness of the Norwegian sale system is very high with detail information on catch and presentation at vessel level and sale result data. Predominantly this study is concerned with fresh fish landings and auctions. Whilst only around 10% of the Norwegian catch is fresh (NOTE: only = tonnes) it represents a major proportion of the European catch in certain species. Also frozen, dried and salted fish for human consumption (1.150 million tonnes) are exported, mainly to the EU, and affect overall supply markets and prices across the entire product range. Norway is, de facto, part of the EU for fish supply and fish markets. This is a very general overview of Norwegian fish sales practices. Further study of the interrelationship between Norwegian and EU fish auctions is called for and should include both Iceland and Faeroe Isles. 17

20 Denmark Within the EU, Denmark, one of the smaller nations (pre-2005), has the largest capture tonnage. Like much of the Norwegian catch a high proportion is used for industrial purposes (fertiliser, fish and animal feed etc). Industrial fish is not auctioned but sold under contract. The Demersal fishery is still important and has a reputation for quality. The Danish fleet boxes its catch at sea and it may be sold in these boxes, without further sorting, when landed. However with the need to achieve maximum return from the catch it is increasingly rare for fish to be sold by the box and not by the kilogramme and so it can be assumed that fish sold without shore weighing has been weighed at sea: today this is done by motion compensating digital scales and a printed ticket will be placed on each box. The majority of the fleet do not weigh at sea and fish is received, sorted (by size, graded for quality) and weighed by a SALMECENTRALER i.e. a company that provides pre-sale services. This can include offloading the vessel through to presenting the fish at the auction (or delivering to a contract or private buyer). Auction sales are mostly traditional shout auctions based on a rising price with the auction company guaranteeing payment to the fisherman and usually holding a bond or guarantee from the buyer against payment. On the North Sea coast there are a number of landing sites. In terms of auction activity Ejsberg, Hvide Sande, Thorsminde, and Skagen are all under tonnes p.a. but fishing related activity may be much higher e.g. Ejsberg with its major industrial and pelagic landings. Fish Landings and Sale by Auction 18

21 Key North Sea AUCTIONS are: Thyboron which was Denmark s the first clock auction and uses falling prices. It operates the PEFA.com system with access to remote buyers. Fish from Thyberon is regularly bought by Breton buyers who meet the cost of transport and fish box return as an extra cost: they are buying the day fresh catch of cod (or monkfish) at a premium and receive the fish the next day. Fish being inspected prior to sale at Thyberon Hanstholm is Denmark s largest auction (annual turnover > ). Only around 60% of this is landed by Danish vessels. Hanstholm also auctions fish shipped by ferry in containers or by truck from Norway and the Faroe Isles: in that respect it is a second sale bulk wholesale auction. 19

22 Hirtsals sells tonnes of whitefish per annum (for about ) - the tonnes of herring and mackerel landed at the port are sold on contract or on negotiated terms. Skagen, the most northerly North Sea fishing port has around tonnes of whitefish but also receives more than tonnes of herring landed by foreign boats (predominantly Swedish and Norwegian). All of the Danish auctions are well structured with competent back office systems. Prices achieved are published daily (internet) with monthly averages available.. Unlike most auctions in Europe they have an open approach and provide good information on the forthcoming auction, usually starting at least a day ahead and updated regularly right up to the start of auction. Several auctions cooperate in this process 20

23 Germany On the North Sea there are Bremerhaven and Cuxhaven. After many years of indecision on how to modernise its sales procedures Cuxhaven eventually adopted the PEFA auction system - implementing it in Cuxhaven is struggling to recreate itself as a fresh fish auction. In the years whilst it failed to respond to the new and dynamic fish auction in Bremerhaven (owned and operated by an Icelander) customer confidence was lost. Simply installing a state of the art sales system and new management may not be sufficient to regain markets. CUXHAVEN 6000 tonnes p.a. fish auctioned Germany does not have a large fleet that fishes the North Sea/Atlantic and those remaining are mainly freezer trawlers that do not use the fresh fish auction. The major source of fresh fish for sale by auction is in fact Iceland redfish and ling. This is sent by ferry, iced in bulk tubs in 6 metre containers. These are emptied on arrival and the fish sorted, weighed and boxed for sale. The grading is automated with only a few species in large volume, this is very easy to do. In Bremerhaven the auction is a combination of computerised and shout auction. The fish to be sold is on the computer as lots with weight, condition information etc... The smaller coastal cutters provide a mixed variety of fish which is again supplemented by mixed fish from Iceland this tends to be for the Monday auction at which many smaller buyers are present these are buying for mobile fish vans that travel throughout Germany and as far as Switzerland. Buyers can inspect the fish before sale in the auction hall but the actual sale takes place in a sale room where the buyers can enjoy coffee, interact with colleagues (rivals) attend to the sale on-line and signal their bid to the auctioneer. Bremerhaven saleroom 21

24 Netherlands Dutch auctions are highly structured, and regulated, in their system for the sale of fish which is through auctions. The origin of auctions goes back to medieval times. Auctions were a Government (National, Regional and Local) activity to ensure fishermen got a fair price with payment secured. The number of fish auctions was dramatically reduced in the closing decades of last century and government involvement ended. Today, the eleven remaining auctions are all privatised, either as cooperatives owned by fishermen or as independent stock companies. Being private companies frees the auctions from the sort of constraints that public bodies have with regard to risk taking an essential feature in marketing All use computer clocks falling price with bidding in a sale room separate from the fish hall. For remote selling two main systems are being used: the EFICE system which originated in Urk, is being used by Breskens, Vlissingen, Den Helder, Den Oever, Harlingen, Urk and Lauwersoog; Colijnsplaat, Stellendam and Scheveningen (United Fish Auctions) use the system developed by PEFA in Zeebrugge, Belgium. The auction system is essential in the very strictly controlled Dutch Fisheries. In a successful attempt to restrict black fish and unrecorded sales after a government crackdown in the 1980 s, a management system was developed with groups of fishermen.. By agreement between fishermen and government all whitefish fish must go through the auction which is held responsible for its correct recording and reporting. Fish is boxed on board to preserve quality but sorted, re-boxed and weighed before sale (by kg). The Dutch fleet fishes for a maximum 5/6 days before landing. 22

25 Auctions in the Netherlands are amalgamating in four groups based on regions and ownership structure. Only Lauwersoog, a private stock company owned by local fishermen, local traders etc, is not joining with others. Four groups so far, but possibly the Netherlands will end up with two or three groups of auctions. Breskens, Vlissingen, Colijnsplaat, Stellendam, Scheveningen and Ijmuiden: all are public stock companies whose shareholders are local authorities (100%) except Ijmuiden which includes pelagic operators and an association of local fishermen as well as local and regional government. Den Helder and Den Oever: owned by cooperatives of fishermen Harlingen and Urk: both owned by cooperatives of fishermen Lauwersoog The largest of the auctions, Urk, has an interesting history being born out of necessity following the closing of the Zuider-Zee. The fishermen of Urk, to survive, upgraded their boats to beam trawlers, started fishing the North Sea and sent their catch back to Urk overland. Today they have a very strong fleet including a number of vessels that form part of the UK and Belgian fleets these also sell through Urk or sometimes one of the EFICE group such as Oostende. It is worth noting that EFICE has recruited auctions in UK (Hull) and Belgium (Oostende) and this can be seen as recognition that there are benefits of scale. Indeed without sufficient turnover the auctions can not meet ongoing running costs and certainly not upgrade or invest for the future. There is a belief, often denied by individual auctions but nonetheless present, that only the larger auctions (or groups) will survive in the future. It is acknowledged in Holland that there are too many auctions and this is affecting the viability of all. However no-one is willing to close. Nonetheless as private companies they no longer have access to public funds from the municipalities and so, in time, there should be a rationalisation. How to manage and finance such rationalisation is a vexed question. Substantial assistance has been given to first modernising and then downsizing the catching sector to meet total allowable catch levels. No such finance is available to ease the corresponding reduction in support sector areas and yet the auctions live in symbiosis with the catching sector. 23

26 Belgium With the smallest fishing fleet of the EU-15 coastal countries and only some 60 kilometres of coastline Belgium still manages to have 3 auctions. All three use electronic selling with a clock Zeebrugge, which handles between 60% and 70% of all landings employ the PEFA system and Oostende and the coastal fishing port of Nieuwpoort use the EFICE system. Zeebrugge European Fish Centre (Auction) Fish is landed in boxes then sorted and weighed ashore (by the auction) and sold by the kg using a falling price system. Sales are held in a separate chamber the fish is in the (chilled) hall and can be inspected before sale. Zeebrugse Visveiling is a wholly private company created in 1988 and taking over the functions of fish selling in the port of Zeebrugge from the municipality. Oostende recently moved part way towards this example by the Municipal authority forming an operating company for the auction that has its own management team. The most important catches are flatfish Dover Sole and Plaice and the fleet of around 100 vessels fishes distant grounds for these species. This has important economic implications for the fishermen and the catch. Belgium s third fishing place, Nieuwpoort sells local day caught products from a seasonal fleet of 14 small boats. The Regional Government of Flanders requires that fish landed in Belgium by its fleet passes through one of the three auctions as first point of sale. 24

27 France There is a well developed infrastructure of both fishing ports and auctions. The ports are government managed facilities, either national or local, with the public auction facilities generally provided and managed by Chambres de Commerce et Industrie (CCI). The nature of the market in France has, in common with the rest of Europe, seen considerable change. Most notable has been the emergence of the grande surfaces (supermarket chains) as the dominant retail outlet. Indeed this has been taken a stage further with the Intermarché retail group having acquired a significant stake in the catching sector of the industry. This has added an additional element for change with centralised management concentrating what were individual vessels or fleets operating from a number of ports in one administrative centre. The port/auction sector of the industry in France is notable in the level of investment in direct and indirect value adding, facilities e.g. Concarneau, a National harbour, where the CCI as auction and services manager has not only upgraded distribution and sale facilities but has recently constructed a dry dock to complement the existing ship lifts and vessel construction and maintenance yards. The auction is modern, chilled and computerised: but fish landings and sales are falling. However as public institutions the CCI auctions are constrained in the actions that they can take within the marketplace. This has given rise to two modifications on the public ownership model. The first of these is the port auction of Boulogne-sur-Mer (No 1 in France: 60,000 tonnes of fresh fish) where although the CCI is the provider of the main facilities, manages the port and registers activity the actual sale is organised by private auction. These are operated by the fishing vessel owners (Le Garric and Nord Pecheries, 2 large trawler companies), the fishermen s association or their nominated sales agent. In fact the port of Boulogne has a key role as a crossroads for fish with 300,000 tonnes of fish (five times the quantity landed at the port) being handled and redistributed through its landward facilities each year. photo: Gare de Maree Boulogne sur Mer The other example of a different approach is that of Lorient (No 2 in France with sales through auction of around 30,000 tonnes). In the early 1990 s the diminishing fleet and catch tonnage, coupled large elements of the fleet transferring to base avancée(s) to offset escalating operating costs, prompted a review of the auction operation in Lorient. 25

28 Imports were seen to be of increasing importance and, to allow flexibility, the franchise for operating the auction was transferred to a mixed capital company involving local government and fishing interests. This, in turn, employed a professional organisation (itself now a part shareholder in the franchise holder) to manage and develop the auction. Despite some initial tensions the broad objectives have been met with a significant proportion of fish sales now landed remotely by Lorient vessels, and brought by truck to the port. Trade has also been developed with overland imports from UK and Ireland - occasionally Scandinavia brought to the port to go towards meting the excess of demand over supply (Lorient is a major fish processing centre handling up to 100,000 tonnes per annum). This fish is auctioned and available to all registered buyers and as such is more flexible than the traditional import by a processor for own use only. The fortunes of port fish auctions are precarious as producers seek to minimise costs and relocate to more favourable locations either with France or to a port closer to the fishing rounds. Nonetheless France remains a major market for fresh fish with many small processors, fish restaurants and a consumer base that still buys unprocessed fresh fish and shellfish. Auctions are well placed to exploit this. There is potential, due to common management responsible for several auctions (e.g. CCI Quimper), for the formation of auctions clusters sharing supply and buyers across common networks. Administrative support systems and equipment are already dealt with in a corporate manner but many buyers resist opening their market to outside interest. The wish to exclude transient or predatory buyers is seen as being reasonable as their intervention, as opposed to participation, in the local market could be destabilising. As procedures and securities are found to provide safeguards on this aspect it is expected that first district and then possibly regional clusters will be formed. A number of processing companies that are buyers on their local closed markets also participate in remote auctions over internet connections and so the principle is established if, at this time, unidirectional. 26

29 Spain Spain has a long history of selling through organised auctions with these holding a special place in the fishing communities. Cofradia are similar to trade guilds and formed by fishermen within the community management is democratically elected from associated members and these bodies organise the sale. The port and usually the auction building are provided by the state or regional public bodies. There are exceptions to this for example Celeiro where the fishermen have formed a holding company which has constructed a purpose built auction hall, associated facilities and a cluster of service companies and the new auction at La Coruna is also commercial. All fresh fish landed in Spain must be sold through the auctions. Spanish fishermen operating in NEAFC waters (the Grande Sole fleet) place their catch in 20-25kg capacity boxes this fish is kept on ice for sale when landed. As the fish is usually covered with a plastic sheet and ice applied on top of this both the sheet and ice can be removed on landing and the fish weighed without ice and without disturbing the fish. Spain differentiates between methods of capture line caught is usually considered superior to trawl and gill net caught and the price paid reflects this. Bidding is down, although studies are being carried out at present to explore other possibilities that will make the price formation process dynamic. Auctions range from traditional simple voice (but perhaps not simple for the observer to follow e.g. Vigo where perhaps 20 sales going on simultaneously!) to sophisticated electronic sale carried out in a chamber. With Europe s most numerous fishing fleet (largely inshore) it is not surprising that almost every coastal community has an auction - about 90 - on the Atlantic coastline (i.e. more than France, UK, Belgium and Netherlands combined). Cofradias Vilanova la Geltru Celeiro Vigo, the largest fish auction port in Europe, operates separate auctions for its coastal and deep sea fleets. The home port of most of Spain s factory freezer trawlers it also receives large volumes of frozen fish as reefer cargo: this is not auctioned but has to be landed and registered through authorised points. The port of Vigo owns the auction facilities, licenses and regulates the selling agents. The Fishermen s cooperative provides some services such as fish boxes. As well as selling fish landed there Vigo is an important 2 nd sale auction for bulk catch that has been landed elsewhere and indeed may already have been sold by auction for example fish caught in the Azores, sold in their local auction and then sent, via Lisbon, to Vigo for onward sale and from there to Mercamadrid where, still in the original state when landed in Azores, it could be sold for the 3 rd and maybe even 4 th time... Although all fresh fish landed in Spain must be sold through auction it would be wrong to think that the auctions are not under threat there as elsewhere. Spain imports a vast volume of fresh 27

30 fish from the rest of Europe and indeed from all around the world (particularly South America and South Africa) by airplane: Vitoria airport is the biggest port of landing for fresh fish on the Iberian Peninsula. This fish can, and is, sold in a less regulated way with obvious impact on the prices for the landings of the European fleet. As Spain is very much an importer of fish with strong demand against supply the price structure there is relatively strong. It is therefore a sign of the pressures within the selling environment that auctions are talking of forming sales clusters indeed they are even starting to implement them albeit on a regional basis initially: The main fishing regions are in the process of upgrading their auction systems with the Galician Regional Government promoting the introduction of electronic selling (the Basques region has claimed to be doing so for several years but it has not yet really materialised). Below is an extract taken from the Xunta of Galicia s web site. - WHOLESALE COMMERCIALISATION Around 6,700 Galicians work in wholesale commercialisation, which packs the fish in the port and then ships it to the markets. Wholesalers and exporters form part of a highly dynamic industry, in which around 700 companies operate. The amount of unloaded fish, both fresh and frozen, is growing more and more in Galician ports, especially in Vigo, which is the European port with the greatest movement of fish. On the other hand, we have to take into account live shellfish storage plants and shipping centres, which specialise in the marketing of seafood. Galicia s 140 live shellfish storage plants keep crustaceans caught in the rias alive until they are marketed. The shipping centres, which number around a hundred, are in charge of processing molluscs (especially mussels), which, after being purified and cleaned, are sent to the markets. One of the commercialisation sector s main assets is the prestige enjoyed by Galician fish and shellfish in all markets. One of the best ways of reaching new clients with these products is the recognition of quality brands. The first of such brands was the product classification Galician Mussels, which was the first quality classification awarded by the European Union to a product that is not cultivated on land. At present, the Xunta de Galicia is promoting the complex process involved in obtaining quality classifications for the goose barnacle and sea urchin. The first step in the commercialisation of products is their auctioning in the fish market. Galicia has 63 such establishments employing around five hundred people. In the markets, buyers bid for the lots from a maximum price that, during the auction, decreases until the first offer is made. The Galician Administration has the priority objective of modernising fish auctions in order to attain three goals: reducing the time of sales, automating the process to enable remote bidding, and interconnecting the different markets. The objective is to satisfy customer needs more quickly and increase competitiveness in the auctions, in order to increase the fishermen s profits. To that end, the Xunta is computerising fish markets, which is a step forward that has already been introduced into 33 establishments (with more to follow soon). This new, more dynamic system, designed by the University of Vigo s Advanced School of Telecommunications, does away with voice-controlled auctioning, since buyers use remote controls. This technology also enables remote buying and remote bidding in real time. 28

31 Portugal With a very strong and old tradition in fishing Portugal has, for several decades, reinforced the control and commercialisation by the mandatory sale of fresh fish through auction. All continental auctions are operated by the state owned company Docapesca. This ensures a structured approach and an effective way of engaging in commercial activity for fishermen and buyers who can use any of the auctions all along the coast there are 19 main auction ports and a further 40 small fishing harbours/communities with local outlets. Since 1986, an electronic sales system (falling price), developed by Docapesca, has been used for auctioning the fish in the main auctions: operating with infra red command and integrated with electronic scales and automated conveyor systems in the larger auctions. In important fishing ports there are different auctions for: seine (pelagic) - where the sale is made by sample; trawl (demersal); and for coastal and local fish. In some cases these run simultaneously, allowing buyers to buy in both at the same time. The fresh fish sold by contract* must also pass through the auction and the sanitary control. Docapesca assure the payment to the fisherman within 3 days, and provides other services related with the selling of fish such as boxes (30 litres: 10-13kg of fish or kg of cephalopods), ice, chillrooms At five of the most important fishing ports Matosinhos, Lisboa, Sesimbra, Setúbal and Sines Docapesca has full management responsibility for the harbour management and other activities in addition to the auction. 29

32 The auction operator (Docapesca) also provides a range of services for the fisherman and merchants near the other auctions. Associated activity by Docapesca in support of the industry are: a fish resale market in Matosinhos, 3 cold storage warehouses (96.377m 3 ) with 31 chambers and 2 deep freezing tunnels, 40 chillrooms (2.179m 3 ), 334 merchants premises (55.394m 2 ), 348 fishermen s stores (13.003m 2 ), 79 offices, 9 banks, 13 restaurants/bars 9 points of fuel-oil supply. The importance of auctions is clear from the close relationship that exists between Docapesca, the ministry and its agencies and the fishing community at large. Predominantly a day fishery the auction process is geared to supporting the catching sector and ensuring a smooth flow from vessel, through a regulated and transparent sale to the buyers. *all demersal fish must pass through the auctions. Bluefish (pelagic) is slightly different with contract supply to canners etc but there is still influence exercised at the point of landing by Docapesca. On a smaller scale this close supportive role is mirrored in the Açores and Madeira: in the Açores islands with unique logistical problems being spread over a thousand kilometres of the Atlantic. This is illustrated by the following table: 41 landing sites over the 13 islands of the Açores. Only nine have more than 100 tonnes of fish landed there per annum. 30

33 United Kingdom The UK has a diverse mix of ownership and service provision. Most services are deregulated and provided by private companies that operate for profit. Generally the fishing ports, infrastructure and superstructure are provided by the port authorities. These are a mixture of public bodies and private companies. Selling is carried out by representatives of the boats private companies that provide their services, usually procurement and administration in addition to sales, to the vessel owner but also may be shareholders in the vessel itself. Peterhead, the UK s largest fishing and auction port is in this mould. A Harbour Trust (Public body with an elected Board) owns the harbour and buildings, including auction building. It regulates fish arriving into the market and polices hygiene compliance. However independent, private, agents sell the fish (7 at Peterhead) each selling their boat s catch in the order of landing. This is a shout auction based on rising price all fish of the same species, size and grade from a boat is offered and bid for (price per box). Most boxes of fish are not weighed but deemed to have a nominal weight, although this is changing, slowly. It is now prevalent for high value species such as Monkfish (and of course the mandatory weighing of cod). The highest bidder has the choice of how many boxes he wants to take from one to all and the other bidders can then agree to buy the remainder at the same price or the balance is auctioned again. Private companies provide ice, and boxes. Fish is generally sold as landed and there are no facilities for the sorting, grading or repackaging (boxing) of fish prior to sale. There are scales in the auction building that allow check weighing but compliance with the need to weigh 1 / 3 of cod landings would be stretched if cod formed a high proportion of what comes through this market. As the main UK markets for cod are on the Humber (Hull and Grimsby) cod landed in Scotland is often sent directly to those auctions for sale. The ports of Hull and Grimsby (and a number of other important fishing harbours) are owned and managed by ABP a private company. At Grimsby the auction building is owned and managed by a private company. This company does not engage in selling the fish - sales agents carry out the actual selling operation (shout auctions, more than one simultaneously) but has delegated (contractual) responsibility for the fishery quays within the port. Grimsby has an Aucxis clock electronic selling system but the salesmen have not yet agreed on its use. Boxes are supplied by different private companies, ice by the auction building company and fish is mostly overland from other auctions (so 2 nd sale) or (the majority) consigned for sale from Iceland, Faroe or even Norway. Although there are almost no direct landings of fish from vessels at Grimsby it is England s largest wholesale fish auction with fish trucked from all points as well as freighted from Scandinavia. Fish, usually fillets, is even flown in from Iceland by the planeload to meet local demand 31

34 Hull the auction building is privately owned (Icelandic/Faroese partnership) and the selling is in a chamber by computer clock system. Although some fish is landed directly at the port the vast bulk of fish sold through Hull is from Iceland, Faroe or Norway. It is shipped by ferry to the adjoining ferry port of Immingham (in bulk tubs) then trucked to Hull, sorted, graded, weighed and boxed before sale. Plymouth was the first auction in UK to get an electronic bidding system into operation. The Port owners (a private company) own the fish hall and the sales system but have granted the franchise to carry out the auction to another private company the largest sales organisation that previously worked at the port. This mixture of ownership and service provision, even when all parties are private companies, carries across into the grading where the machinery is owned by the harbour but grading is a separate contract between the boat owner and self employed fish graders/re-packers. There are a number of important landing ports which either do not have an auction or the auction serves only a small proportion of the fish landed there e.g. Milford Haven in Wales and in Scotland; Lochinver, Scrabster and Ullapool.. In combination almost 100,000 tonnes of demersal fish is landed at these ports each year. Much of this fish is landed by French and Spanish boats plus Belgium in Milford Haven and Faroese and Icelandic vessels in Scrabster and Lochinver. What happens after landing depends on vessel nationality and fish species. Fish from French vessels is trucked back to France for sale; most Spanish fish is sent by road to Spain (although some is sold in UK); Icelandic and Faroese fish is predominantly for the UK market and despatched to Hull or Grimsby (occasionally Peterhead) for sale or is a direct sale to merchant or processor. At Lochinver the fish may be graded, weighed and re-boxed before being sent on to another location for sale (Peterhead, Grimsby, Lorient, Boulogne or even Bremerhaven). Everything is done at these ports of landing EXCEPT auctioning. Even crew changes are made. Troon in SW Scotland auctions Nephrops (langoustine) and carries the grading operation to a new level. It boxes whole, fresh day caught, langoustine in 3kg boxes packed in ice and actually sells them in this format. Thus the buyer is buying a product that can be delivered direct to his customers without further action. The product (sorted, selected, presentation packaged and sealed) is bought by remote buyers none actually present at the auction based on the guarantee of quality and security of packaging. Buyers from France, Spain and Italy represent 85% of purchases with the balance local UK and Irish traders who will often sell on to continental Europe. 32

35 A premium charge applies for this level of service with the fisherman paying 6% to have the fish graded then sold and the buyer an extra fee for the packaging. In fact this is not an additional activity in the product cycle but transference of the sorting and packaging downstream: this allows the producer/auction to add value prior to sale and improve the economic balance within the product chain. Transport is arranged by the auction to the buyer s premises the most distant of which is 3000 kilometres away. The UK is a major importer of fish, notably cod (100,000 tonnes per annum) but is also an exporter of many species of fresh fish to continental Europe and particularly France, Spain and Italy. That many ports no longer have a viable auction is not something that can be reversed: continuance of the remaining auction centres must be seen as a priority. Although sale by auction is not a requirement in the UK it is the chosen method of sale for most fresh demersal fish. The United Kingdom has legislation restricting the ports of landing to designated ports # where fishery inspectors are present and a system of registration for auction sites, fish sellers and buyers. The landing of catch and recording of sale is heavily regulated. In the guidance to this legislation is the following at most auction centres or markets in the UK responsibility for the sale of fish rests with the sellers operating within the auction or market, rather than the auction centre or market itself thus indicating a fundamental difference in the industry sales (auction) structure in UK from practices in continental Europe where the sales organisation and the owner or operator of the physical auction facility are the same. # In the UK, vessels over 15 metres (10 if landing cod) in length landing whitefish (demersal) are currently required to land into designated landing ports (DLPs), within specified times, or to provide 4 hours notice of arrival in port (to allow for the deployment of enforcement resources and vessels to be inspected if necessary). Separate DLP arrangements apply to pelagic vesels. 33

36 Ireland Auctions developed to serve as a mechanism between sellers and buyers. This implies many of each. In Ireland, with a small population there has never been a balance between these two forces and so the amount of fish going to auction was really only that for local consumption. The result is that sale under contract or consignment to remote auction (UK was the traditional destination) have become the norm. Auctions do exist but, as a fisherman s coop reported for less than 10%. Today fish is sold direct to buyers in UK, France and Spain and also sent for sale at auction in the same countries. When sold at auction the buyer is sometimes the sellers agent who then trades it on. The Irish Fish Marketing Board (Bord Iascaigh Mara) has been trying to encourage the development of fish auctions and promoting electronic selling with its potential for remote buying as a way forward. Only Union Hall, in the south of Ireland, has bought into this with the PEFA.com clock selling system not yet operational and intended as local sale only. The Irish fishery has grown steadily since entry to the EU. Although situated amid rich grounds (see map below showing productivity in Irish waters) and having a strong tradition in inshore fishing it was the combination of access to a wider market and grants to assist in vessel builds, modernisation and new shore facilities that enabled this to be converted to a modern fishery. Indeed Ireland is the only one of the EU15 that has experienced growth in fish catch. Ireland: Demersal 100,000 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10, tonnes source: seaaroundus.com (FAO statistics) The rapid growth in the fishery was not matched by the development of auctions and their infrastructure. Producers had to find outlets and expert became the norm. The reality is that it was simply easier to export the fish to more populous markets although processing and value adding has increased. With a remote customer base Ireland is ken to improve catch values by developing quality procedures and the cooperatives, aided by the BIM, are actively exploring this aspect. 34

37 INTER-REGIONAL AND CROSS BORDER COMPARISONS Ownership & Governance The pattern of responsibility and investment varies between countries (and indeed within) but there are prevailing model within national borders. In general ownership, governance of and investment in Ports is a public function. This can take a number of forms from the national (state owned) port, through Regional or Municipal government to the UK s public Trust ports. Exceptions do exist: some may be legal distinctions such as where the port s owned or managed by a publicly owned company or agency with separate legal status; there are also ports owned by private organisations such as the ABP in UK. Within the port area and service provision therein there is much more variation in practice. Fish Landing may be by the fishermen themselves; labour hired by the fisherman from an organised pool or simply as available or labour hired from the auction. The practice of mandatory employment of regular dock labour under restrictive agreements has now virtually disappeared. Fish Grading and Boxing prior to sale is usually undertaken by employees of the auction. Exceptions to this are in landing places where the fish is not auctioned e.g. base avancée where it is by private grading companies working for the fishermen and in Denmark where the grading company is between the fisherman and the auction. Boxes are normally provided by the auction this may be seen as binding the fisherman to the port but in reality does not. In the UK the boxes are hired to the fishermen by specialised box management companies. Boxes owned by the fisherman are also becoming more common as fishermen opt for capital outlay as opposed to recurring hire charges. Box washing is part and parcel of box management but, in the UK there are also independent box washing companies that service a number of box ownerships. This mixture applies through the range of services The degree to which the auction acts as service provider pre and post sale is broadly measured on the chart opposite. The UK and Irish activity both pre and post sale is relatively light due to the high level of involvement of private companies in service provision. The auction s sales process is not as integrated as in the continental auctions. In France and Portugal the auction operators are also engaged in providing a number of other support services: from banking in Portugal to dry dock in France Relative Activity Range of Auctions DK DE NL BE UK IRL FR ES PT country This is a necessarily subjective assessment of multiple factors considered for auctions collectively within a country: there are different levels of sophistication at all stages in individual auctions. 35

38 SERVICES At the major fishing ports a wide range of services is generally available. A modern fishing port is in many ways a specialised an activity as a container terminal. Some are operational (e.g. the need for separate landing and lay over berths for fishing vessels often of differing construction requiring some separation or particular care). Others are concerned with the specific nature of the product being dealt with fresh fish for human consumption and a combination of health, hygiene and commercial concerns. Small fishing harbours may consist of little more than the berthing quay but in practice they do not exist in isolation but are supported by hub fishing ports and distribution centres (auction) even though these may be many kilometres distant. As the catching sector has upgraded so have its needs developed and enhanced handling and care of the catch brings with it many added features. Most of the key port and auction operators have responded to these changes by direct investment in facilities or through actions that have enabled the private sector to provide the service. By examining the range of facilities and services provided a hierarchical structure of fish landing places and auction distribution centres could be derived. This could provide a basis for exploring future developments on a district, regional or wider basis: this would need to be tempered with the socio-economic considerations including the existence of reasonable alternatives. What is clear is that without the existence of specialised fishing ports and their associated fish handling and sale activity the needs of today could not be met. Fish, as a fresh food product, does not mix well with commercial goods either for discharge or handling. Sanitary standards simply do not allow fresh fish to be treated as ships cargo. Designated landing berths for fish, holding storage (cool, often chilled), clean sorting and grading facilities, clean packaging, scales for weighing, ice to maintain quality, inspection facilities, a distribution centre et cetera and all dedicated to fish The auction process itself can be simple (traditional shouted bids) or highly sophisticated and computer/internet based with local and remote bidders. The more widespread the supply base and buyer location the more sophisticated the selling system will be. Fishing vessels have their own special needs from a suitable berth to dry dock. Even fuelling has its own peculiar demands as a large number of boats tend to wish to bunker and return to sea in a short space of time. The degree to which the panoply of services is cross-subsidised within the port/auction charging structure is worth considering if only to question whether users of these services who do not sell through the auction may be being undercharged. This is addressed in the section on charges. 36

39 AUCTION Operational Elements The auction process starts with notification by the vessel of the catch that it has on board. Initially this will be provisional and pre-advice can be from 3 days before landing/sale to immediately before landing. The latter is the more common event making it difficult for the auction to set the market. On arrival a fish landing berth is allocated and offloading will occur to suit local auction conditions e.g. discharge from the boats chill fish hold just prior to auction or offloaded on arrival and taken into storage prior to shore grading etc. Fish offloading: Almost all fish caught by EU boats is boxed or containerised at sea and this makes discharge relatively straightforward. Fish, in boxes, will normally be offloaded by the boat s crew, perhaps supplemented by shore workers for the placing of the fish into storage or on the market floor. Where the vessel is in port only to discharge and then return to sea the discharge may be carried out by shore labour: Fish reception: A tally of the boxes being received and placing on the market floor, if for imminent sale, or into holding store is usually by auction staff ensuring that the boxes labelled as to vessel a copy will be given to the skipper and a provisional entry made for the auction catalogue.. Sorting: Except where fish is sorted on board the vessel (where it may also have been weighed at the point of capture) fish will be size graded before sale. This operation is generally organised by the auction although there may be a separate company provide the service. Since the sizes for each species are clear measurements of length there can be no ambiguity. Grade (quality): A problematic area as grades can be subjective. The EU grades E, A, B, C are used for compensation purposes and as this is managed by the PO s it is usual that they allocate or agree the grade. De Facto, where fish is sorted after landing for presentation on the market it is the auction that applies the quality grade. However as there is an increasing commercial requirement for more specific grading # this is now starting to be formally undertaken by trained auction staff. # e.g. QIM, specific quality schemes Weighing: Weighing on shore is the normal practice where fish is sold by the kilogramme weight i.e. throughout continental Europe. The auction takes responsibility for this, providing scales, usually electronic with automatic ticket production, through to sophisticated conveyor size sorting and weighing systems. Shipboard weighing using motion compensation scales is becoming more common, particularly on larger vessels. Weighing at sea is more common where the auction is selling by the box i.e. UK and Ireland. By differentiating their products producers that have weighed their fish are making more from their catch (SFIA). Where at sea weighing is done auctions that sell by the kg may reweigh or check weigh to safeguard their position. If weighed at sea the weight is when captured not when sold.. From a buyer s viewpoint weighing a few hours prior to sale is preferable to weighing at sea as he will not have to compensate for water loss over several days. Weighing on shore is the normal practice where fish is sold by the kilogramme weight i.e. throughout continental Europe. 37

40 Boxing; Fish boxes (reusable plastic kg sizes) are most commonly supplied by the fish auction for a small hire fee although individual vessels may own their own boxes or, as in UK for example, participate in box hire scheme with a private company as the box provider. Boxes are provided for use on board the vessel but, where shore sorting/grading/weighing occurs, the fish is repackaged prior to sale. Assuming 30 kg of fish per box the average volume of fish landings in a week from the Atlantic/North Sea can generate in excess of 3 million box movements a week. All of these have to be cleaned and re-circulated. Storage: Fish stored before sorting/grading and after but before sale may be held in chilled chambers. Ideally fresh fish will be held at the temperature of melting ice i.e. 0-2 o C. Indeed the fish, even when placed in temperature controlled conditions, is packed in ice as other wise quality can be affected by the fish drying out. Te provision of such holding chills is an example of the type of recent cost that auctions are bearing generally without recompense. Presentation: Well presented fish will be perceived as of better quality (without bruising, exposure, melt water) and sell better. Where fish is sold as it comes from the boat or is boxed by the fishermen after weighing it can be very well presented. Where all fish goes through a common grading process there will not usually be any differentiation on presentation. If auctions wish to promote quality this may have to change particularly if it is conceived that the fish will progress through the chain in the same box (as is starting to happen with some fish in Spain and France). Sale: Whether a traditional auction (voice, shout) or highly technical with radio transmitter and internet bidding the auction is an open forum in which the price of the products are set by competitive offer. Bids may be rising, falling or a combination of both. Distribution: After the sale is made the box(es) of fish are identified to the buyer and assembled for collection or despatch. The coordination of this aspect is best managed by the auction but may be by the buyers with resultant overlap of activity. Records: Auctions retain precise records of fish receipts and sales for fiscal and often statistical purpose. Indeed in certain countries the sales recorded through are a specific input to the national statistics. Payment: It is normal for the sales organisation to receive payment from the buyer and make payment to the fisherman. These actions are separate and payment of the fisherman is not dependent on receipt of payment from the buyer. The auction guarantees payment to the fisherman and usually makes this, net of auction and other fees, within a few days of the sale - sometimes the same day and in advance of receiving payment from the buyer. In Brittany an unusual situation exists whereby the buyers, through their trade organisation (Association Bretagne des Acheteurs des Produits de la Peche- ABAPP), makes the payment to the fisherman directly and pays the auction fees to the auction operator. 38

41 process flow fleet landing at a base avancée Lochinver UK and selling at Concarneau France Element Analysis Lochinver UK Landing Remote Sale KEY PRODUCER AUCTION SERVICE COMPANY Other Concarneau Auction Armement Dhellemme 05/08/2005 Producer Port Authority CCI Private 1 Producer Private 4 Auction PO CCI Merchant Auction Infrastructure / Superstructure Harbour EC Registered Buildings receiving hall / gare de maree / grading hall/ holding store / auction hall / distribution area / merchant premises Equipment Crane Grue Grading Weighing Boxes IN TRANSIT Grader Fork Lifts Auction chariots Box washing Activity - Manpower Boxes Capture ice Quay Berth Discharge Sort Grade Weigh Box Transport Receive preview Check % Regrade Store SELL Move repack transport Producer / Crew Port Crew Independent Grading Company Auction Haulier Auction Producer Merchant Other Services Ship Lift Dry Dock Engineering Gear Storage Bunkering Net repair Box Services ICE Bureau Welfare Transport Distribution platform Marketing Training other In this example the vessel has discharged its catch at port [A] where the fish has been graded and repacked for transport to a remote auction [B] for sale. It is also selling some of the catch directly. Some, or all, of the catch could have been graded and weighed on board, alternatively the catch could be sent, without being graded, to the sales auction. 39

42 TECHNOLOGICAL APPLICATIONS Grading: This general term usually encompasses a number of concurrent actions. Sorting the fish according to species (if this has not been done on board), grading for size within species in accordance with EU and (or) local size variations, selecting on quality, boxing and weighing the fish. Manual: for mixed fisheries where a large number of species have to be dealt with the grading process is predominantly a manual operation of selection. Mechanical: aids such as conveyor systems may be employed to assist in manual grading and even conveyor tare weighing within the cycle. However some very sophisticated, and expensive, size and weight auto-grading systems are used where the volume of individual species warrants this. Quality is not automated but remains the province of the experienced operator. QIM: is a structured quality measurement system that is gaining acceptance. There are variants under development to speed the process and its limitations are perhaps in regard to the fresher catch. Other systems do exist but quality assessment must have regard to the fishing method, on board handling regime and other factors such as point of capture. Chills: Fish is usually stored in ice after capture and often in a refrigerated fish hold - other forms of preservation are generally only used with shellfish (e.g. cold mist systems and vivier) although RSW is used by modern pelagic vessels and by farmed salmon harvesters). When the fish is removed from the hold it is now normal for it to be held in a chill room if it is not to be sold within a few hours even auction halls are often chilled so the cool chain remains unbroken. Investment in this is fairly recent generally within the past 15 years or so. Halls where grading and other work is done are also chilled where ambient temperature dictates. Handling of Boxes: Fish boxes, when full, weigh between 20 and 60 kilogrammes and with this in mind mechanical handling is now widely used to comply with safe lifting practices. Unlike in other industries the necessary workforce numbers have not fallen relative to the number of boxes. Automatic washing machinery with auto-stacking represents a major investment. Distribution: Fish auctions not only sell the product but physically handle it and as such are major logistics centres. Expertise in this has not been exploited and auctions only provide such services to the fish sector and within the specific confines of their port area. 40

43 e-auction In the application of IT to auctioning the fish auctions have been to the forefront. As a fresh and perishable product fish must be sold quickly. With perhaps more than 100 parties wishing to bid there is little doubt that IT solutions with wireless or infrared signallers offered a means of ensuring fairness. The objective of e-auctioning must be to make the process more efficacious. Buyers have progressively used telephone, fax and more recently mobile phones to keep a check on prices and their customer s requirements. Auctions use computers for administration and in large measure the e-auction simply bridges these technologies. Of course the more open approach that e- auction permits, particularly when allied with the internet, offers scope for added services and a more dynamic sale process. This aspect of auctioning was looked at in some detail during the course of the project [appendix 7]. Management par les Technologies de l Information et de la Communication Some historical milestones and recent events are: Holland is generally credited with the first auction clocks - these were mechanical devices that were in use at the beginning of the last century (1902) and as technology allowed these to become more sophisticated it is not surprising that it developed into electronic auctioning of flower, vegetables, fish etc. Docapesca, with responsibility for all of continental Portugal s fish auctions, developed and implemented an electronic auctioning system more than 20 years ago it is still in use today. In 1998 PEFA developed auctioning over the internet in real time. Based on this it went on to arrange shared buyers and central payment settlement across user auctions, frontiers and currencies. Junta de Galicia is today in the process of implementing a regional model developed by Vigo University and the industry. This envisages linked auctions. One of the original development companies ATS (formerly Schelfhout Computing) now provides systems worldwide but fish is its most numerous user (60 systems). In 2004 Aucxis Trading Solutions was acquired by key clients from 3 sectors flowers, vegetables and fish. In Spain the principle electronic auction provider is Autec which has 40 Iberian users and during under the EC Fifth Framework Programme (FP5) developed MASFIT which automates buying fish through several participating auction markets. Integration of auctions into local cluster and wider regional virtual auctions is happening as a reaction to falling supply levels and the wish to offer both buyers and sellers greater choice. Installing an e-auction can be part of a traceability programme and general marketing. The system in the port of Looe in South-West England where a day boat fishery operates is an example of this and also demonstrates that it can be successfully implemented in smaller auctions. Interconnection and development of concepts such as demonstrated by the data exchange pilot within this project point the way to continued application of technology to responding to marketing challenge and the achievement of concentration of supply. 41

44 CHARGES The level of charges applied, and to whom, are important when looking at the economics of fish landing and sale. Differences in practice may be indicated and comparisons drawn. It is apparent that for the area covered by the project the principal basis of charge is usually related to the product value (ad valorem) and not to tonnage of landing or vessel size. This contrasts sharply with other port operations - freight or ferry and we believe reveals the symbiotic relationship that exists between the producer sector and their shore operations. This partnership approach (sharing good and bad times together) has been put out of balance by EC and Government actions on fleet capacity reductions. The need for imposed catch limitations (TAC) and other pressures on the fleet to seek economies in operational costs and improved efficiency have altered landing patterns and catch levels have generally diminished. Many of these changes have occurred over a short period of time and the port/auction sector, with long term investments, can not respond in a natural way over time but are faced with the immediate consequences. With large fixed and semi-fixed cost elements it is clear that as activity levels decline the burden on the remainder increases. Producers, naturally, resist this and may relocate to another port/auction if applied unilaterally. There is in imbalance between port and auction capacity and current demand but although unit costs have increased considerably there is great resistance to increasing charges. P ES F UK IRL B NL Harbour Dues 0.6% 2% 2% 10 tonne Auction - fisherman 2% - 5% 2% - 4% 2% - 3% 7% 3% - 4% 3% buyer 2% - 3% %-1.5% - Boxes rental occasion/week buyer rental Water m month 2.50 Ice tonne Sort & Weigh Fish 1%-2% - 3% 3% Grade Fish de facto PO PO = included in auction fee PO = producer organisation The two main charges are harbour dues and fish sale including any preparatory sorting, weighing et cetera. Although the split may differ the combination of these two elements is between 4% and 8% with the cost of sorting and weighing taken as being of the order of 3% where this is undertaken. It should also be noted that, with the exception of the Uk and Ireland where fish is not normally weighed prior to sale although some vessels will have weighed at sea quality grading is, in practice, undertaken by the auction and that sometimes this is to a more precise level than the basic EABC (e.g. QIM). It would be expected that scale economies would enable the larger auctions with higher throughputs to apply lower charge rates and although this can be seen in France, which has a large number of auctions of vastly different size and other indigenous factors that affect the usage of a port, this does not appear to be so in other countries. Indeed it appears that auction, and harbour, charges are at a threshold which can not be breached by individual ports. To do so may hasten the departure of elements of the fleet to competitor landing sites and auctions. The application of charges (that may previously have been subsumed) for additional and added value services is therefore not surprising. The transparency that this produces may create some initial friction but can be of benefit to management and user alike e.g. charges for box usage over time. 42

45 CHALLENGES ACTIVITY REDUCTION Catch levels in the NE Atlantic by the EU 15 fleet have reduced dramatically since the middle of last century is a fact that continues to trouble the industry. As infrastructure is generally financed over years the long term trends and prospects are particularly significant to the port / auction sector. Demersal Catch: North Atlantic Portugal Spain Ireland United Kingdom France Belgium Netherlands Germany Denmark Produced from Data extracted from FAO capture production statistics The demersal catch by the EU Atlantic fleets, already down 50% from a peak at the end of the 1960 s (largely due to the closure to it of Icelandic waters) has fallen to only 55% of the 1980 tonnage. Over the same period the demersal catches of Norway, Iceland and the Faroe Isles have increased by similar quantities (from under 0.8 million tonnes in 1950 to approaching 2.5 million tonnes today). Norway has produced the major part of this growth. In fact, for the past 40 years, the overall European Economic Area demersal catch has been relatively stable at around 10 million tonnes Nordic Atlantic Demersal Catch Trend Norway Faroe Iceland 43

46 CATCH TRENDS With the notable exception of Ireland all 9 western coastal states have experienced massive catch reductions (from 30 to 80%) over the past 30 years. 50 YEAR CHANGE Portugal % Spain % Ireland % UK % France % Belgium % Netherlands % Germany % Denmark % 20 YEAR CHANGE Portugal % Spain % Ireland % UK % France % Belgium % Netherlands % Germany % 30 YEAR CHANGE Portugal % Spain % Ireland % UK % France % Belgium % Netherlands % Germany % Denmark % 10 YEAR CHANGE Portugal % Spain % Ireland % UK % France % Belgium % Netherlands % Germany % Denmark % Denmark % These are total tonnages and as such mask even more dramatic changes in particular fisheries. Because catch levels and fleet size (numerically and latterly in capacity) has reduced, the need for rationalisation within the ports and auction sector has accelerated. For some harbours diversification was (and remains) possible: notably the growth in leisure boating has provided an alternative area of activity. Table 6.1 European Union Fishing Fleet by Vessel Length Group as at 31 December 2003 Overall Length Unknown 0-5.9m m m m m m m 42+m Total Belgium Denmark Finland France Germany Greece Ireland Italy Netherlands Portugal Spain Sweden United Kingdom Total

47 TEN YEAR TREND: DEMERSAL CATCH DENMARK GERMANY NETHERLANDS BELGIUM FRANCE UK GB&I IRELAND SPAIN PORTUGAL PORTUGAL SPAIN IRELAND UK GB&I FRANCE BELGIUM NETHERLANDS GERMANY DENMARK 45

48 PRICE and COST FACTORS Fishermen complain that they are being forced out of business through a variety of factors: not allowed to catch the fish that are there; when they do have a good catch the price collapses; costs continue to increase at above average inflation rates Whatever the reasons given it is clear that certain sectors of the producer sector are in economic difficulty. Fishing ports and auctions have traditionally shared the good and the bad times with fishermen. Their income is generally on an ad valorem basis (percentage of the sale price of the catch) and so with fixed overheads it is not surprising that many are depleting reserves and postponing investment. Port income is affected by: Fishermen leaving the industry (decommissioning) Vessel catch levels reducing (TAC fluctuations) Price weakness Quality issues Buyer interest being diverted to more secure sources (imports) Concentration of buyer power (supermarkets) The dilemma for ports and auctions is how, with a reducing client and activity base they can meet their own costs, in large measure fixed, without raising charges and adding to the woes of the producer. Diversification opportunity is limited due to location and indeed would require further investment and probably displacement of fishermen. Fishing ports and their auctions were created to serve the fishing sector and essential for the producer to operate and so this option in generally untenable. Leisure craft, the obvious alternative for non-commercial ports, need to have a degree of separation from fishing vessels and more sophisticated support. To achieve this needs yet more investment The extent of reduction in fishing activity has, in a number of harbours, created surplus protected water but the levels of income derived from what in remote areas is a seasonal activity does not compensate for the loss of prime, year round, activity. Although leisure activities may provide some localised benefits for the port operation, and the community, the auction and multifarious support functions are not suited to such forms of diversification. Even at reduced fishing levels they are necessary to sustain employment in fishing. Auctions, as the marketing arm of the sector, must strive with fishermen and the industry at large to improve income levels by raising fish prices against the reduced catch levels. 46

49 IMPORTS Demand for fish in the countries of the EU vastly exceeds internal production. It is therefore natural that the EU should be a net importer of fish and fish products indeed in 2003 the EU imported 9.1 million tonnes and exported 5.5 million. Per capita fish consumption has risen by 10% over the past decade to some 25kg per annum. However over the same period captured fish (by EU 15) fell by over some 5% to 6.1 million tonnes in 2001 of which 4.2 million tonnes was from the NE Atlantic (a reduction of 12.5% over ten years). This has been compensated for by increases in aquaculture production (up from 0.9 to 1.3 million tonnes) and a net increase in imports of almost 1 million tonnes per annum. Such dramatic changes in supply have had a destabilising affect on fresh fish prices. Processors have turned to alternative sources (imports) to maintain their overall output. Whilst, initially, this was thought to be temporary the continuing crisis in stock levels and resultant lack of EU catch continuity has created a preference in imports. These can be ordered weeks in advance at known prices the result is that real demand for an element of EU caught fish has diminished. FOREIGN TRADE IN FISHERY PRODUCTS (source: EC Fisheries Yearbook 2003) Imports: tonnes and value ( 000) NET: tonnes and value ( 000) In the ten years to 2002 net imports of fish to the EU increased by 892,000 tonnes (32%). Over the same period demersal fish production from the NE Atlantic fell by almost 300,000 tonnes (20%) NET IMPORTS ' tonnes tonnes NE Atlantic Demersal Catch We have included observations on a few import species and the EU capture fishery that is affected. 47

50 COD With the main fisheries for cod being in Scandinavian water there has been reliance, since the 1970 s on importing cod from Norway and Iceland. The EU15 imports around 200,000 tonnes of cod per annum 5 times as much as we catch with our own fleet. Iceland, Faroe and Norway re more than 40% of this (and with Russia the North Atlantic provides 2 / 3 ). However even cod is brought in from around the world with 15,000 tonnes from the USA and China over 22,000 tones (up from 10% to 12% of all imports in a year): source: Eurostat. For example Canadian cod (frozen) at 2.80kg (headed, gutted and tailed). Processors have also taken in substitutes such as Alaskan Pollock* and Pacific Hoki (Australian Hoki - headed, gutted and tailed frozen -at around 1.90kg + shipping costs) making EU captured cod (138,000 tonnes) a marginal product overall. * now with MSC accreditation as a sustainable fishery with a 1.5 million tonne TAC TILAPIA Not only does the EU fisherman have to compete on a global basis on species that they capture but new species are entering the EU shopping basket. Tilapia is one of these new species on the market both wild and farmed is being imported from Indonesia, Thailand, China, Vietnam, Malaysia, USA, Zimbabwe, Uganda Production has increased tenfold in 25 years (mainly through aquaculture), to some 2 million tonnes and although capture appears to have stabilised aquaculture growth continues by ,000 tonnes per annum. Even this low cost import is being superseded by even cheaper alternatives such as catfish from the far east in particular Vietnam following denial of the US market to its producers. TIGER PRAWN These large shrimp compete directly with Nephrops but other shrimp also have an impact as they replace scampi. The EU is the world's largest shrimp importer with around 450,000 tonnes bought per annum. Shrimp farming really grew from 1980 onward as Pacific and Indian Ocean countries entered this field. For example Bangladesh only started shrimp farming in 1980 but today has almost 150,000 acres of cultivation ponds. price per tonne Nephrops Price Trend

51 MARKETING The marketing of fresh fish at point of landing has, traditionally, been a local forum where a large number of producers (fishermen) presented their catch before a large number of buyers. The supply itself was sufficient to generate market interest. Supply and demand was reasonably balanced and also accommodated (on the part of the buyer) the purchase of alternative species. Although this model remains accurate for small, localised markets where fresh fish is in demand the advance of the GMS (supermarkets) to a position of dominance in retail sale has altered the buyer dynamics and, when coupled with uncertainty of supply has contributed to real marketing difficulties. Whilst fish withdrawal (on price) has almost been eradicated from the system the failure to exploit the combination of increased consumer demand (fish consumption up almost 10% since 1993) and lower production levels (EU captured white fish down 20% since 1993) is a real cause for concern. The sale of fish through an open and transparent means (auction) is recognised as fair and effective. Other factors have resulted in the average prices for 14 main species out of 21 falling in real terms* since 1990 [appendix 9]. It is clear that action must be taken to reverse this trend and so ensure that an endangered species, the EU fisherman, has a sustainable future. *based on UK average prices (DEFRA) taken to 2003 price base using RPI index The role of auctions in addressing this is critical. Historically auctions have provided a neutral platform in which all sellers have equal opportunity as do buyers. Although auctions have been active in caring for the fish and ensuring that it is well presented they have, essentially, adopted a passive role with regard to general marketing. Of course as changes in demand have become apparent auctions have reacted and moved to meet such emerging factors. By definition this means that actions lag behind retail or consumer expectations as a consequence it is almost inevitable that some market share is lost. The crisis on price and turnover (volume reduction factored up by price stagnation, or fall) that has been identified as pertaining across virtually all fresh fish landing ports and auctions is such that positive action is necessary. This calls for a proactive role being taken by the auction sector and this must engage producers and consumers (or at least their surrogates the retail sector). Looking forward the volume of captured fish (in EU waters) is not capable of increase, at least in the short term. The process of matching effort to resources will continue and fleet sizes will probably continue to decline. A few ports and auctions will be running against the trend as they increase their share of landings and some species important to that locale may have appreciated in value (and even volume). Individual fortune does not alter the underlying negative position and ongoing trend. If the solution does not lie with increased volume and it certainly does not then one must be sought through improved unit price. This can only be achieved by supplying a better (fresher) and consumer acceptable (sustainable) product. Delivering it is only part of the problem convincing the consumer to pay more is essential: without a consumer premium for EU captured quality fish viability is not improved. 49

52 TRACEABILITY Following upon food scares in recent years EU legislation applying to the entire food sector was drafted in 2002 and came into effect on 1 st of January Member states have implemented this through National legislation. The legislation and its implications have ramifications for fish industry both captured and cultivated - perhaps to a greater extent than initially appears. In the intervening years since the concept was first proposed much debate has occurred on the meaning and value of traceability when applied to fish and there is no absolute and clear guide beyond the legal minima. This has led to individual organisations, often retailers, or software and hardware suppliers promoting their own unique solutions. However, lacking demonstrated benefit, general inertia has been the norm. As a result although the now statutory information and record systems are in place through the chain there is no common approach and few changes to practice. Regulation, EC/178/2002 (effective from 1 st of January 2005), is straightforward and below is the official EC summary: DG Health & Consumer Protection General Legislation The identification of the origin of feed and food ingredients and food sources is of prime importance for the protection of consumers, particularly when products are found to be faulty. Traceability facilitates the withdrawal of foods and enables consumers to be provided with targeted and accurate information concerning implicated products. Regulation EC/178/2002 defines traceability as the ability to trace and follow food, feed, and ingredients through all stages of production, processing and distribution. The Regulation contains general provisions for traceability (applicable from 1 January 2005) which cover all food and feed, all food and feed business operators, without prejudice to existing legislation on specific sectors such as beef, fish, GMOs etc. Importers are similarly affected as they will be required to identify from whom the product was exported in the country of origin. Unless specific provisions for further traceability exist, the requirement for traceability is limited to ensuring that businesses are at least able to identify the immediate supplier of the product in question and the immediate subsequent recipient, with the exemption of retailers to final consumers (one step back - one step forward). 50

53 The text below is extracted from the regulation which, when compared with reality i.e. the actual information to be provided and how it is maintained) demonstrate how laudable objectives have been diluted. Protection of consumers' interests Food law shall aim at the protection of the interests of consumers and shall provide a basis for consumers to make informed choices in relation to the foods they consume. It shall aim at the prevention of: fraudulent or deceptive practices; the adulteration of food; and other practices which may mislead the consumer. Article 8 Food and feed imported into the Community Food and feed imported into the Community for placing on the market within the Community shall comply with the relevant requirements of food law or conditions recognised by the Community to be at least equivalent thereto or, where a specific agreement exists between the Community and the exporting country, with requirements contained therein. The information that must be present on packaging is of little practical value as a basis for consumers to make informed choices. Apart from the species one is informed that it is from, for example the NE Atlantic and was captured, but not how, by whom (national fleet) or indeed when. Not stated are: producer, capture method; actual area of sea, perhaps even the bank fished; date of capture; on board treatment; date of landing, etc... Lacking this information can a discerning buyer make an informed value choice? By the time the fish is presented to the consumer the fish (fillet) may be in a sealed packet and so even smell, the traditional test of freshness is denied. Inclusion of the establishment of origin s approval number is, of course, of technical benefit in tracing but of little value to the consumer. In any case that reference will be the last establishment in the chain. How many fish products show the first point of sale auction establishment reference? Imports have the same limited requirements. Against this background we looked at the potential to establish some standards that could be applied at Europe s fish auctions. These could form a foundation for guidelines to be developed as the basis for best practice. It is clear from this project s findings that, at present, there is no common basis for recording and retrieving data on fresh fish landings in a structured manner that will facilitate a standard approach. Accordingly we believe that there is merit in further researching the operation of a central secure database to maintain common information and traceability records on behalf of members. We (through EAFPA) shall work with systems suppliers and others in establishing common, Europe wide, codes and recording criteria. It is considered that a starting position would be for EAFPA to take the lead and establish a standard, proprietary (i.e. EAFPA s) EAN GTIN s for species, presentation and premises (auction). 51

54 STANDARDS FOR AUCTIONS As a crucial player in the fish chain it is essential that auctions establish their position in the specification of systems and not have other parties attempt to thrust their solutions upon them. EAFPA, as the trans-national representative of auctions, believes that fish landing ports and auctions should exercise a key role in the implementation of traceability from the producer through point of landing, first sale and into the hands of the buyer or his representative (e.g. transport company). There are separate but, we believe, parallel aspects to traceability, Health is the progenitor but Marketing plus the potential to enhance Sustainability are taking on an importance that is also extending the scope of traceability beyond its initial limited area. HEALTH This is the primary driving force which dictates the legislative minima. We must ensure, as far as is reasonably practical, that the fish sector avoids the type of problems which were occasioned by, for example, BSE. Traceability does not, of itself, prevent such outbreaks (or the presence of pollutants). However it does improve the formal controls and record keeping (audit trail). Thus quality assurance procedures are strengthened and management is provided with better control data. If a problem does arise the existence of sound traceability procedures and accessible records can ensure that the impact is localised. Traceability also provides retailers and others in the chain, with a means whereby they can improve customer confidence and also reduce liability insurance costs. A not inconsiderable benefit where large groups (supermarket chains) are involved and the potential cost of litigation could be considerable. This can be an important motivator with major customers (supermarkets) demanding that traceability be implemented as part of their downstream risk management. Traceability, or its lack, impacts on profits. For this reason many systems have been developed by retail and distribution groups to meet their corporate requirements across a wide range of products. Compatibility at a common level is often required. Current Fish Labelling legislation only requires: The Commercial Designation (species common name* / Latin name optional) The Production Method (captured at sea- fishing method not required) The Catch Area (e.g. NE Atlantic [FAO 27]) more detail is optional *the common name should be that used in the country of sale not origin. Therefore the scientific (Latin) name, FAO code or similar common identifier is necessary. The addition of a country of origin only applies if the fish is from fresh water or has undergone some processing. The establishment reference number shall also be shown. What changes? Not a great deal based on current definitions except that, since January 2005 it has been mandatory for each party in the food chain (e.g. the auction) to be able to: identify the supplier that the product batch (lot) came from and the buyer to which it went. So is traceability a basic task for auctions not a problem... 52

55 It is obvious that this is how most auctions view the Traceability rules and it is how it appears to be except that now the information has to be duly recorded, both for receipts and issues, with the records retained and searchable. Other questions are: How long are records to be kept for? Is the information output in a user friendly form? Would client buyers benefit from EDI? Is it readily translatable between countries? Does it meet the needs of the auction s customers? As has been suggested the data that must be attached to each supply (and available to meet health & hygiene requirements and/or comply with legislative needs) is actually quite modest: the product source, its description (species and condition whole, gutted, head off etc.), quantity, that it is captured (or cultivated), and from one of the FAO areas (such as NE Atlantic). To meet the one step forward, one step back rule the buyer need not even be advised of the producer for the auction, with its approved premises number, is the buyer s source. Of course this makes the auction responsible in law. The auction must be able to link back, through any processes that occurred after receipt of the fish, to the boat or other supplier*. For example any sorting, primary processing and or repackaging carried out after discharge from the vessel and before sale/delivery to the buyer should form part of the chain. In addition, as has been suggested earlier, the auction may be the de facto custodian of the boat s records. *where fish is not delivered to the auction direct from the boat, but through a carrier or intermediary (who may now be the owner of the fish), the auction should be duly prudent and reasonably satisfy itself that a link back in the chain exists and that the supplier is not a man of straw. That is the limit of the auction s responsibility. It could be argued that most auction systems already provide the necessary information through the sale process and this is generally true [responses to the EFAD questionnaire, our own experience and observation confirm that this is the generally held view]. There is a tally of fish received from the vessel, the catch is sold in lots that are cross referenced back to the landing for settlement purposes and a sales invoice normally goes to the buyer. However to simply assume that existing practices suffice is to risk: failing to meet the full requirements of the legislation not maintaining linked records of processes between the landing of the fish from the producer vessel and uplift by the buyer being required by buyers to complete separate documentation meeting their individual traceability requirements missing an opportunity to enhance product marketability and hence prices. Certainly where major client buyers have particular requirements every reasonable effort should be made to accommodate these. However this should not be in a manner that disadvantages other potential buyers and any pre-sale information should be available to all buyers and players in the market. 53

56 Of course it could be argued that if the EAN standards are followed then there is commonality but that is not necessarily the same as equitability of data flow. Implementing a system based on EDI and EAN codification assumes a level of sophistication that may not exist. Inevitably when large projects (such as Tracefish Concerted Action) are undertaken the participants are representatives of large organisations. With hundreds of Auctions and tens of thousands of suppliers it is important that we do not lose sight of the need to cater for small and medium enterprises as well as the large GMS, processor, distributor or e-auction group. A good starting point for each auction is to review actual events and products handled and match it against the guideline for captured fish that emerged from the TraceFish concerted action and have subsequently been adopted within an EAN UCC standard. the following diagrams are extracts from this lengthy document The figure above shows the Supply Chains Models for Captured and Farmed Fish. Note that the last links of these Supply Chains Models i.e. from Processing to Consumer are common. In the supply chain for captured fish it is necessary to trace fish or products made from them all the way through the supply chain from the vessel that landed the fish to the point of sale to the consumer. 54

57 GLN GTIN - Global Location Number - Global trade Item Number The fact that EAN codes are processor structured appeared somewhat anomalous as it implies that the product only becomes unique (valued) when it achieves a brand identity (e.g. Carrefour cod cutlets ). We consider it important to identify the product as the principal object with the port/auction a key secondary element. Packaging (boxes) may have their own identifiers for trace and tracking purposes and a means of integrating these two features would enable standardisation of EU fish important in developing a generic marketing strategy. 55

58 As we are concerned with the process from capture through to receipt by the first buyer our concern is primarily with the first two elements. 1. Information to be received by the auction from the vessel. VESSEL IDENTITY Method of Fishing Fish Treatment on board Fish Storage method on board VOYAGE START DATE Fishing Start date Fishing Stop date Landing DATE CATCH Unit FISH BOX TUB TANK or Batch VOYAGE Fish SPECIES SIZE PRESENTATION QUANTITY Location FAO area ICES area BOX No Bank or Grounds When DATE of capture SHALL SHOULD MAY provisional Label - This will include the auction as supplier plus all relevant data. Producer (vessel identity) AB Species Skate.. sub species Trip (date landed) weight Where caught (FAO area) NE Atlantic Where the auction sells exactly as received this can be passed through to the buyer however if any sorting or other change of contents takes place then a separate label must be produced. The catch date shown here is not mandatory. 2. Information to be passed to the buyer by the Auction. This assumes that, as occurs in the majority of auctions, the fish is sorted, weighed or otherwise processed after receipt from the catching vessel and prior to sale. 56

59 AUCTION SHALL SHOULD MAY Auction Identifier Vessel Batch/Unit Identifier Trip length Date of catch Method of fishing Date of landing Transport Regime Date of Despatch to Auction FAO Area of fishing ICES Area Grounds Treatment on board Treatment pre-auction Species (common name) scientific (Latin) name Quality Weight Size Grade Presentation Date of Receipt by Auction Date of Sale Date and Time of Collection/delivery If existing systems contain the above.mandatory information. and this key data is transferable and accessible then the legal obligations are met. Is that considered sufficient? For Health purposes yes. For market development (and price enhancement) probably not. 57

60 TRACEABILITY AS A MARKETING TOOL DEVELOPING VALUE ADDED ASPECTS It is important to recognise that traceability provides customer confidence. Whilst this is formally addressed through the legal framework it can be projected as a positive action by publicity and promotion. Of course to be effective it will undoubtedly require more than the bare essentials as otherwise (your) products are not differentiated in the marketplace. Doing more than the legal minimum should have a commercial reason. The benefits should (more than) offset any additional costs involved. As there is an unavoidable cost in complying with the legislation, even if nominal, it may be that value enhancing information could be gathered at a marginal rate. Depending on the species and the demographic group being targeted the information collected and, more importantly, included with the product packaging will vary considerably. When the package is perhaps an entire fresh fish, a fillet or other select but unbranded item this presents particular problems: farmed product shares the same difficulty but capitalise on regional production characteristics or production differences. This form of labelling creating an identity for the product rather than the packager is an approach that could perhaps be better exploited for capture species. For the auction, selling to wholesalers, distributors and processors it is an issue that must be carefully considered. Perhaps it raises role issues concerning the auction as a player in the marketing of fish: passive or proactive. If passive then buyers shall specify what additional information, if any, is required by them. This is the normal situation auctions providing a responsive service. By being proactive the auction can offer its buyers product information that could be used by them to command higher prices in select markets. That not all buyers will exploit this may be a reflection of their chosen market area and not, of itself, a reason not to look at better product labelling. Simultaneous to improved product identification the auction could focus on developing a reputation for high quality fish. In this way the auction can actively participate in market development and by so doing may, over time, enhance product definition, quality and demand leading to improved primary prices. The EFAD project has identified that fishing ports and auctions (most of which derive their income from the value of fish sales) are facing some fundamental problems that go beyond the current TAC issues. Foremost amongst these is that the EU fresh fish sector appears to be under attack from imports and alternative products and this is reflected through prices achieved at first point of sale. The market for fresh fish and strategies to counter rising costs and falling incomes are subjects that warrant further detailed study. However it is beyond the scope of the EFAD study to research these. Commercial value (adding) is the principal force in establishing what, if any, additional data beyond the legal minimum should be provided. Different product groups suggest different approaches to implementing traceability. From the following it can be seen that, as is to be expected, commercial imperatives greatly affect the approach that may be taken to implementing traceability. Also the nature of the fishery being serviced dictates aspects such as batch size and supplemental information that is attached to that batch. 58

61 DESCRIPTION MINIMUM ENHANCED PREMIUM Post capture Fishery producing a homogeneous catch Batch by boat Treatment and e.g. mackerel or herring fishery and Trip storage Fishery of lower value (i.e. volume capture) fish 7 day or more trips. e.g. haddock, whiting, grenadier Under a week trip Day Boats High Value Species Quality Defined Capture Method Freshness Treatment Batch by Boat, Trip Number Batch by Boat and Trip duration Batch by Boat and DAY. Batch by Boat and Trip Identify fresher catch through the chain Individual boxes by date of capture Treatment and presentation Box by DAY of capture Individual boxes - day + catch location Individual boxes - day + catch location Selected Select FISH by DAY of capture Through each of the above there is a core of essential information and although vessels may always land and sell at a single port the nature of fish trade is such that increasingly fish may be sold through more than one first sale auction. In such circumstances the transfer of primary data can be simplified by reference to a common database. We have selected examples of how traceability is being applied by fish auctions and these are summarized below. Should auctions, or others, wish further information they should contact EAFPA. To aid consideration of how to implement traceability we believe that there is benefit in constructing a simple decision tree in conjunction with producers and buyers. This could assist in determining what elements of the traceability model should be adopted. EAFPA will be taking this idea forward with its partners under a Leonardo da Vinci project which will develop training modules on traceability for quality and marketability. Registration of Landings and Sales The concept of port auctions being the points of entry for all fish is increasingly accepted as a means by which data collection could be standardised. This would ensure that fish landed into the EU was traceable from the ship whether catcher or carrier. Currently the practices differ across Europe: all fresh fish landed in Spain, Portugal, Netherlands and Belgium must be sold via the auction; elsewhere this is not required practice although the majority of demersal fish is sold in this way. Of course with large volumes of fish being imported by road, sea and air it is clear that port auctions are not the sole points of entry. Also there is a strong trade in resale of fresh fish, unprocessed (but perhaps sorted and of mixed origin) some of which could even go through a second, or third, port auction. Here the auction is only required to trace the product back one stage, to the merchant or trader putting the lot on the market. The port auction is in the same position here as the inland wholesale markets of municipalities. Some auctions have been asked to provide information back a stage, or more, before the trader or merchant putting the fish on the auction floor. This is impractical and unreasonable it is for the authorities to obtain such information, if required, from the merchant. 59

62 Quality Label Branding Setting the health aspects of traceability to the side the provision of information to differentiate products from alternatives and with the need to maximise the return achieved from a diminished resource (EU captured fresh fish) there is an opportunity presented by incorporating traceability features with an eco-label, sustainable fishery et cetera. The application of this form of branding has historically been driven by the processor or retail sector. Although such schemes are generally beneficial if they do identify a superior product (or even if they only increase consumption) the lack of information carried forward from primary source (producer and landing/auction) make it likely that these actions are more concerned with marketing hype and the transfer of consumer choice rather than increasing the overall quality and consumption levels. Individual local schemes are operated by local fisheries and although these have limited impact on the overall catch they are useful initiatives to consider and learn from. A selection of schemes is: line caught hake from Celeiro; inshore fisheries in Normandy; line caught mackerel, Dunmore; Loch Torridon nephrops [appendix 10]. General schemes such as that of the Marine Stewardship Council (MSC) have the benefit of being open to all and they do use a common standard of assessment. It is regrettable that the EU fisheries tend to be fragmented to a degree that, as yet, the MSC label has been adopted by competing major fisheries (Alaskan Pollock, Alaskan Salmon, South African Hake, New Zealand Hoki) and so could, through circumstance, be considered as acting against EU captured fish. The only EU accredited holders of the MSC label are small scale inshore fisheries. The Scottish farmed salmon industry (200,000 tonnes per annum) has successfully created an enhanced image as against other salmon production groups. This has been achieved at two levels: the general production (Scottish Quality Salmon) and as a premier selection within an already accepted superior product those that bear the Label Rouge. Can this be emulated for captured fish? It would appear that, if approached in a considered and fishery wide basis it can be e.g. Ireland has an equally successful branding for wild (captured) salmon. We believe that establishment of certified fisheries coupled with promotion of healthy, home caught fresh fish from EU waters could create recognition for fresh fish from the EU fleet that command a premium price. This would be similar to successful campaigns for other foodstuff such as free range eggs, organic beef and vegetables. This would develop the concept of EU fresh fish being different from imported and within this there remains scope for even higher valued niche market products that have a further uniqueness attached to them. Traceability and other informative labelling can, together, differentiate fish captured in EU waters, landed at EU ports and dealt with in a chain that distinguishes and rewards quality. Of course we need the consumer to be willing to pay for this if we are to bring about this last part. Ports of landing and auctions have an essential role in the development and application of any such schemes which, with multinational producers, require a controlled and coordinated mechanism to brand the produce. 60

63 Traceability Examples: ACTUAL MODELS implemented VESSEL BASED SYSTEM Fish is gutted, washed, sorted, weighed and boxed in ice on board at point of capture. When landed it is either sent to a remote auction for sale or sold directly to a processor. In both cases it is presented with the ticket from the boat on the box showing species, weight, zone of capture etc. Data can be transferred electronically (EDI) to the buyer or auction by the vessel which operates a proprietary traceability system. These systems are being pushed by software (and hardware) producers that see the potential for large volume sales. As such they often have many (additional) features as they have to appeal to a wide range of clients and their customers. C-Trace, WiseFish, AUCTIONS Example A A mixed fishery with vessels working short trips (under 1 week), boxing on board in ice and landing to the auction where the fish is sorted, size graded and weighed. Species are low to moderate value with a small proportion of high value. Sale is by the kilogramme. The auction receives basic data from the vessel at point of landing; some of this is static in the system e.g. fishing zone (NE Atlantic), vessel name and number. The number of boxes by species is the variable. The auction grades and weighs the fish and so establishes the landing and sales tally for that vessel trip. This is linked to the lot reference. Each box is sold (price per kg) and the buyer recorded. A paper transfer of data is made by the auction to the buyer in the form of a sale note/invoice which meets the minimum requirements of the traceability regulation. EDI is possible. The recipient can then translate the information into their own data format as it is in the auction system format (not in the EAN coding structure). As this forms part of the accounting record it is retained for a number of years. Example B Very similar to the above in practice but the number of species is far more and vessel trips range from under 24 hours to over 14 days. Fish is sorted, graded, weighed and re-boxed (with ice) or, if to be sold within a very short time after this in chill store, with the information entered into the auction system. After sale all of this data, which fully meets the traceability requirements and includes some additional information, is downloaded by the buyer. As a back up it is also included on the sale ticket that goes to the buyer. 61

64 Example C Although the vessels landing to this auction are working distant waters, and indeed sometimes land at remote ports, there is a very strong ethos of caring for the catch and providing information to their buyers. Here traceability has been implemented as part of a wider marketing programme and a bar coded label is produced and goes to the buyer. The fish is handled as little as possible from capture and will remain in the same box (iced and re-iced as necessary) through the auction transport and remote inland market process to the retail outlet. This is an example of traceability being applied to add value to the product, in this case line caught Hake, each of which are individually tagged and carry a guarantee of quality and freshness. By such actions it is clear that auctions can actively develop and stimulate the market and so achieve a higher return for the fishermen (and in turn for the auction). Example D Embracing the concept of traceability is a small auction specialising in ultra fresh fish from the coastal day boat fleet. Here the objective is to be able to assure buyers of the quality of the product. Fishermen themselves weigh the fish after landing and each box receives a ticket identifying the boat, date, time of landing (weighing), weight, species, size and quality grade (in this case E or A). Although data transmission (EDI) can be used to speedily move information on purchases from seller to buyer there is no guarantee that the fish transferred is strictly in accordance with this. The normal method of marking the source of the fish (boat) is by a paper ticket placed on the top of the fish and the buyer is similarly identified by a loose ticket, or tickets, dropped on the box. In some auctions this is by the buyer himself where the auction takes place on the floor of the auction hall but where the sale is in a remote chamber it will be by auction employees. Although disputes are rare this method does create a potential weakness in the trail. As part of the EFAD project we have looked at automating the identity of batches and lots in connection with traceability in its broader aspect. The type of identifiers includes RFiD tags, Bar Code, and Hologram. Although many different parties are looking at labelling and associated badges it is evident that these studies have, thus far, been within a controlled loop. It is necessary to take such tests to a volume commercial testing before conclusions can be soundly established on their suitability for the capture and port auction sectors. It is considered that the box is the lowest likely unit that can be adopted as a standard and a box could contain but a single fish. 62

65 BOXES Although the practice by merchants and processors has been to repackage fish after purchase, even when onward sale / supply is as whole fish without primary or secondary processing, this adds no real value and the additional handling of the fish could be a point at which quality is compromised. The boxes used by processors are most commonly of polystyrene (for its insulating qualities) or waterproof lined cardboard both are single use and the former represents a major environmental cost. Labels are printed and attached so providing the traceability link. Auction boxes are reusable polyethylene and used from capture through to the processor, and sometimes beyond: this sets some performance criteria for labels associated with the physical environment and cycle of use. NB for high value fish it may be that the unit will be individual fish in which case the label (usually a tag) will be unique and used only once. This is not dealt with in this section. Tagging systems could be beneficial in the management of boxes. Indeed the improved security in any billing and credit system, coupled with distribution and collection, could ease the adoption of reusable boxes in place of polystyrene. If the auction box were the primary means of transport of fish, and fish product, then it is believed that a significant environmental and financial savings for the industry would accrue. To be so adopted it may be that the box has to be adapted and a key aspect in this, with regard to traceability and logistics management, would be each box bearing a unique identity that could not be tampered with. Track and trace is only part of the challenge also food safety, a major concern of supermarket chains with complex distribution chains. With literally millions of boxes in circulation and a significant volume of fish being transported interregionally and internationally (i.e. by multiple carriers and through a number of distribution centres) any identification system needs to be simple, common, accurate and quick. A unique number on each box achieves the first two criteria but is prone to human error and is tedious (reading and writing). Different options exist for box identification systems and each has its strengths and weaknesses. 63

66 CHARACTERISTICS Bar Codes have been around for a long time and may appear the safe option. Certainly they are accepted in supply chain and used extensively. Their use is most commonly associated with processed, or repackaged, product entering the retail chain. This generally requires the label to contain a range of information and the EAN 128 character structure is designed to handle this. TEMPA, a Galician fish-box manufacturer and box rental company, is using a bar code on their boxes that is printed at point of manufacture an example of the container being identified not the contents. Bar codes are read by optical scanning and a clear line of sight is necessary. Hologram tags are an updated form of bar code and can be rapidly read but they are restricted in the data that they hold mainly used where authenticity of goods required rather than lot or batch identification. It could be used to achieve a simple, and rapid, count of units through a portal but is not thought to be suited to individual box identification. RFid has advanced considerably in recent years and is being adopted as the new standard by organisations such as Wal-Mart and Tesco whose suppliers will be required to use RFid. Tags (smart chips) are available with a wide range of capabilities. From static information (read only) to those capable of being updated with information as it passes through the chain (read/write). In addition the tag can be passive, where an external reader must poll the tag or it could contain its own power source. The attractiveness of RFid is enhanced as anti-tamper locking can be achieved and also temperature monitoring. RF tag systems offer an advantage over bar-coding inventory and monitoring systems because lineof-sight access to the tagged items is not necessary. However to be read the boxes must either be individually radio scanned or, as would be necessary when thousands of boxes are involved, pass through a portal. RFid, embedded in fish tubs, is used in Iceland to identify and manage the flow of product from landing through to the processing factory. Here it is a simple identifier that is used in conjunction with readers on fork lift trucks and factory line receiving units. SeaFish, and partners, in UK has been conducting tests with RFid for some years and has demonstrated that they can be used with weighing at sea systems to place an electronic label in the box, holding information on the contents including date and time of capture. Where the catching vessel has stored data on a computer the need to actually upload onto the chip that is fixed to the fish box may be redundant. If the box has a unique number permanently encoded then data can be transferred by EDI linked to that box and the control process is much simplified. This equally applies to bar codes. Of course some standards are necessary to ensure that any system can be used by a wide range of parties. EAN, perhaps coupled with XML offers such a solution and has the advantage that it would allow either bar code or RFid to be the data carrier. 64

67 Taking this forward The auctions, as the main box provider, user and distributor should be the developer of any standard on boxes. This would need to take account of both upstream (producer) and downstream needs both current and future boxes have a life of up to 10 years. The downstream aspects, including box recovery and management through to retail usability are critical. Box design has altered little in years. Where stack only boxes are in use it is generally because of the need, when they were introduced, to be able to offset them when stacking in the fish hold and so follow the curvature of the hull. This is no longer really an issue as holds are, today, refrigerated or at least insulated and of regular shape. Factors such as stability when stacked and compliance with size standards for road transport are today important: as is the density of packing when empty. As the basic packaging for fresh fish a review of box criteria based on current and future anticipated (or potential) applications from ship to shop is possibly overdue certainly relevant. Of course experience has shown that if this is not coordinated multiple solutions occur. The ideal would be for a European fish box standard based on a few fishery related designs. EAFPA has established a box management protocol between its members and this could be the vehicle to develop such a standard. This should be on both lot (box) identification and general design: a programme is required to take this forward to its next stage. With millions of fish boxes currently in use no auction, or other box provider, can simply scrap their existing investment so a transitional approach is likely. Even the ability to retrofit or adapt existing boxes with bar coding, tagging or other identification system is an issue and one that could prevent adoption of a standard approach. A few of the box types in use today 65

68 INFORMATION EXCHANGE We are in a Global economy and fish is very much part of this. As such we recognise that the fragmented nature of fish selling (auctions) in Europe potentially weakens marketing effectiveness. In any exchange (stock, grain or fish) knowing what is occurring elsewhere is always commercially beneficial. Individual auctions may have sophisticated reporting systems but there is no central clearing house. Could such a facility be achieved pan-european - at low cost and without large investment? The determination of this was an objective of the EFAD project. A pilot exchange of information was undertaken between auctions using different systems and in different countries. For the pilot although the data was received in the auction s own language it was translated to English (fish names) for publication: an ongoing system would be multi-lingual. Our conclusion: it can be done at modest cost and the questions remaining are does the industry wish to receive this information and who will bear the cost, modest though it is. EAFPA could provide the platform. There were several phases to this element of the project and three areas of information were considered: Catch Preview: information on fish coming to market Auction List: actual fish being presented for sale Market Demand As shown by Prices paid Buyer Needs or wish list what the buyers have a market for The first of these, catch preview, has been the subject of many initiatives: by individual vessels via their shore agents; vessels in cooperation with single auctions; fishing groups; Producer Organisations and even as National plans. All (except perhaps the private fishing company that auctions its own catch) are notable in that they have, to greater or lesser degree, failed. The reasons for this are worth consideration and further discussion. We looked afresh at the perceived benefits that may flow from structured information on catch levels and a preview of forthcoming landings. From the auction s viewpoint (i.e. the market-makers?) the objective must be to allow actions to be taken that will result in the catch achieving a better price. In considering this the market is taken as having a European dimension. Nonetheless fish is landed at a physical location and it is (usually) sold at that local auction. How to reach a wider buyer audience is a practical issue and further study and solutions should be sought. 66

69 Catch Preview Perceived Benefits Enables Marketing by the Auction Advising normal Buyers of what will be available Recruiting additional Buyers Deferring (or advancing) catch landings Cooperation with other Auctions for common cause Pre-selling part of the catch (guaranteed supply) Allows Buyers to find customers Or large customers to find supplies Alternative supplies can be sought Demand can be balanced against supply Fishermen can respond to likely market conditions Species can be better targeted (quota permitting) Catch value can be maximised Trips can be extended or curtailed Perceived Risks Advance notice of catch and landings may: Benefit the buyers and not the sellers Let buyers go where there is a glut and abandon local supplies Enable buyers to buy direct from the boat Breach fishermen s traditional secrecy Be unreliable as Fishermen will give misleading information Only be used when there is a surplus Encourage fish to be sent to a remote market Encourage foreign buyers to bid against local buyers Hasten the demise of small auctions Promote a quantity not quality based (commodity) market 67

70 What are the experiences of previous and current schemes? France: National: there was (is) a programme for the advance notification of catch but, significantly, the auctions were not part of the loop. It was/is therefore more as a control measure than a marketing one. W-Fish: has the facility to provide a preview of landings for several days in advance. However it is not widely used and the reasons for this are unclear. In fact only two ports (Loctudy and St Guenole) routinely placed information on the Telemer system and the species data is limited langoustine, monkfish and divers (mixed). An (occasional) user of the more detailed features (Armament Nicot) is controversial as the sales may by-pass the auction (and be sold through a private auction). However this does demonstrate that there is some perceived value in a preview system. Other auctions provide limited pre-notification of landings (e.g. Cherbourg, La Rochelle and Lorient) but all appear to suffer from the fisherman s hunter attitude that encourages secrecy and misdirection the truth but not all of the truth. e Fishing Companies: the 3 companies that operate fleets of deep sea trawlers (Intermarché, Le Garric and Nord Pecheries) all operate a catch advisory system and this information is used to sell, sometimes pre-sell, the catch. All 3 sell their catch direct to buyers (Le Garric and Nord Pecheries 100%) although Intermarché still places a proportion of its catch on the auction. Advance information on catch (or remote landing) is sent out to select buyers who then bid. Belgium Advance notice of fish being brought to auction is given at both Zeebrugge and Oostende where, with 3 auctions per week, details of the fish coming is often available 2 days ahead. freely available at and This is partly facilitated by the fact that the Belgian fleet operates in distant waters landing into Milford Haven or La Rochelle. 68

71 Netherlands: Advance notice of landings is only hours before the landing is made. However with auctions operating Monday, Wednesday and Friday provisional information is accumulated in the days prior to the auction. Only after sorting and weighing is the actual data available. The fact that the fleet operates short trips makes advance notice of landings less likely as the boat has few options open to it. A pre-notification system, with presale as a possibility, was tried but individual fishermen attempted to play the system. Of course this was self defeating as buyers lost faith with the information being provided. Nevertheless there remains support for a robust and extensive catch notification system. Forward supply by Denmark The auctions of Denmark display the intended landings for up to a week ahead and expected landings at a number of auctions can be viewed simultaneously This has been operating for a number of years and so one must assume that both sellers and buyers benefit from the information. Denmark s structured approach to information provision allows buyers (and fishermen) to view forthcoming landings at the major ports and its progress towards sale - regularly available up to 1 week ahead. UK 69

72 The Humber auctions (Fishgate Hull and Grimsby Fish Market) provide advance notice to select buyers of forthcoming quantities. This is sent out by . Both of these auctions sell imported fish i.e. from a remote landing port, or as 2 nd sale auction and so have early notice of most arrivals (predominantly from Iceland, Faroe Isles and Norway) as the catch was actually landed in these countries some days prior to the sale. Other auctions may know the day before the likely tonnage but more often this is only known the night before the sale when the vessel arrives to discharge its catch. Preview of sale is therefore restricted to a few hours before the auction commences. The fish to be sold at auction is updated as it is known in the hours prior to sale this is may be available as a recorded telephone message (Peterhead, Fraserburgh ) Ireland The port auction system never developed as the prime point of sale and most fish is sold by negotiation through the fishermen s Cooperative(s). This requires prior knowledge of catch and when the landing will occur. However there is no evidence that information, for individual boat(s), improves the salesman s negotiating position. Indeed lacking an overview it is more likely that a lot of fish being landed at the same time forces surplus onto a remote market of choice potentially producing price collapse at that port auction. Spain Although little better than other countries in achieving advance notice of supply the market benefits from being one in which demand generally outstrips supply and where fresh fish enjoys a premium over imports. Some auctions do have good advance notice of fish coming to market (certainly from the Grand Sole fleet) and use this information to advantage. However this is the result of local initiatives and does little to influence the European marketing position. Portugal With the vast bulk of the fresh fish catch netted relatively close to shore the advance notice comprises of hours and does not have a major bearing on activity or actions. Norway The Norwegian scheme for auctioning pelagic species (mackerel, herring) is based on sale at sea and so is de facto based on advance landing data. A major part of the demersal fleet comprises factory ships and again the catch can be marketed before landing. With a local (national) buyer protected from direct foreign competition combined with what is essentially an expert trade the Norwegian experience is worthy of study. However this project is restricted to the EU (2003) countries on the Atlantic coastline. Iceland Has a history of selling the catch whilst at sea. Like Norway, Iceland is not included within the scope of this project. 70

73 Auctions have, for many years, advocated advance notification of catch levels as being critical in better organising the market. However how this would be used to produce price advantage has been unclear other than the buyers could be apprised of availability at that auction. It is suggested that only by adopting a cohesive approach involving the main auctions and PO s spanning national borders would the potential benefits be realised. Positive marketing of availability of product and direct interaction with principal buyers (processors and retailers) would be an inevitable result of such an initiative. There is a cost associated with collecting and distribution such information. Can the price (of fresh fish) be enhanced sufficiently to make routine and regular catch reporting by producers and subsequent analysis and publication by auctions (through a central agency EAFPA?) worth the effort? This is an unknown but should be seriously debated and evaluated. The SHEEL project (e-logbook) was established as a monitoring and control. EAFPA is monitoring the development with the objective. If such a scheme is introduced there could be value in gaining access to the summary data for marketing gain. 71

74 Sale List All auctions produce a list of fish to be sold prior to the sale. Availability (public or restricted issue) and details may vary but it will usually identify the catching vessel, species, size and quality grade, weight (and or number of boxes). This information is made available to buyers. This could be in the form of a simple printed list, over the internal database/intranet or, less frequently, as a publicly published list on the internet. The feasibility of combining such information into summary information (national, regional or commercial) was explored as a desk exercise and the techniques for automating (or not) this process is part of this project. We considered the following. Stage 1 Evaluation what information is or could be available prior to landing prior to sale during sale post sale As identified in the preceding section the accuracy and coverage of data prior to landing was considered inadequate at this time. Equally the period of time between when the catch is known (after landing) and before sale is short and whilst data collection and publication could be undertaken it is beyond the scope of a pilot to achieve the necessary discipline: this also applies to updates during the sale sequence. Post sale is, currently, the only solid data available. When it should be provided frequent ongoing (hourly?) update daily (and if so at what time) three days prior to landing at the end of the fishing trip With different time zones and auction times it is important to have regular updates to ensure that information is current and as complete as possible. If it is of potential commercial benefit (value) Increase buyer presence Offset against other species Reduce imports Offer alternative sources Balance supply pattern Reduce operating costs The general feedback is that the availability of information would be beneficial. It proved beyond the scope of a desk study to establish the impact on buyer actions and it is thought that only an empirical study would do so. 72

75 How it could be presented at participating auctions Species Overall Total Auction Total Individual Vessel Quality Days since capture Fishing method Fishing Grounds If pre-landing data was presented it is considered that the confidentiality of vessel catch should be preserved and so although both vessel and catch would be displayed they would not be linked. Who should have access to the data? Buyers registered at participating auctions Fishermen landing through participating auctions Producer Organisations Public Information should be public but if it were necessary to fund the production this may require subscription and so it would become a restricted service. After consideration it was considered that the existing time frame between information being available and the actual auction was such as to make impractical the production of a definitive schedule. MARKET DEMAND Prices Perceived wisdom is that interaction between supply and demand set prices and in the perfect market this is true. However fish is not a single commodity but comprises of dozens of variants and imperfect knowledge. Local demand for a product may be particularly strong (or weak) and local supply a variable. Buyers do take soundings at other supply centres but with hundreds of these they concentrate, of necessity, on a few key locations. Of course the fact that markets tend to sell early morning further complicates matters. As a result buyers will tend to use the previous day s prices at auctions as a reference and update this during the course of an auction through interaction and by external information from associate buyers elsewhere. Even so the predominant factor will be how much fish they require and what they can sell it for. The fact is that despite falling production from the EU fleet fish prices have atrophied or even fallen in real terms. Through globalisation it has become a buyers market and the fresh fish auctions have to find a way to get the buyers interacting in a more positive way. 73

76 Demand Forecasting If buyers could be encouraged to provide their requirements, and prices that they would pay, then it is possible that demand driven fishing could be developed. Of course fishermen can only catch what is there (and they have quota for) but a more targeted fishery could develop. As the prime motivators in this are the giant supermarket chains, and promotions etc that they run, a sound dialogue needs to be established between players. Such is the preponderance of fish sales passing through what is ultimately a handful of retailers it is unlikely that individual auctions can establish a balanced dialogue (and agreement) with these chains. Auctions should explore how they can form interesting trade groups possibly under the umbrella of EAFPA. Aspects that should be considered in such an initiative are: Fish species landed or in demand at the participating auctions The species should be subject to market difficulty Shortage Low Price Over supply Price instability Imported (or substitute imported) Not sold through the auction DATA COLLECTION The degree to which automation can be economically developed was considered in establishing the scale of the pilot. As we could not rely on Catch Preview information being available for entry into the respective systems it was decided to restrict the pilot to post sale data as this was known to be accurate and available. To allow the data collection process to be open to a wide a range of subscriber auctions it was decided that it should be in the form of a simple EXCEL spreadsheet. This would allow future suppliers of data to simply type data in and then send the file for incorporation in overall statistics and reports. Automation, from computerised auction systems, required programmes to be written to extract files from the auction catalogue and post sale prices against these in excel format. These were ed to the project coordinator, saved on the receiving computer and by running macros the information was standardised, summaries created and these uploaded to the project web site The information forms a test bed between partners (and associates) for promoting marketing concepts. It is not part of this project to produce a full working scheme but to pilot the concept. Nonetheless it is foreseen that certain aspects may be retained and continued by EAFPA on behalf of its members beyond the conclusion of this project. 74

77 The objective of collecting and publishing information is to improve marketing by permitting auctions to act together for mutual benefit without diminishing their local independence. The scheme demonstrates the removal of barriers that may hinder SME s from being effective in the global market i.e. it is an open concept and not designed simply make trade easier for major players. Equally although the pilot was undertaken with major auction groups (EFICE) & Zeebrugge (PEFA) the form of data exchange to be adopted should be supportive of all sizes of auction. In particular it is thought that improved and regularly available information across auctions should address market imbalance and if applied on a broad front would provide an added value service which can be effective in stabilising prices at viable levels in an increasingly volatile market affected by multiple factors from currency exchange through alternate products and new sources (Chilean Salmon) to ecological considerations. Sale of the fish is a mid point in a complex equation: the information source would benefit from the addition of both capture and demand data. This should be a forward objective. Previous attempts to bring data from a number of auctions into a single web published format have relied on extensive reading and writing (i.e. re-entering) of data extracted from individual web sites (e.g. the defunct subscription service This approach proved to be unreliable and expensive to operate. Avoidance of duplication of effort and a seamless with an inclusive and simple approach was sought. A standard for data provision shall be produced and made available to interested auctions. As indicated it shall be in EXCEL format and as such auctions that can export data in a suitable format, or simply enter it manually, should be able to participate in a wider scheme should that prove desirable. The pilot having proved operable a post project objective is to include data from many auctions (irrespective of their system providers) on a non-aligned independent platform (EAFPA web site). Based on the pilot experience it is considered that users the PEFA and Aucxis auction systems can quickly automate output for inclusion in a central database and we believe that the Autec systems (Spain), Galicia s Vigo University based system(s) and Docapesca could quickly and easily affiliate. With manual entry from other systems a comprehensive data reporting system could be provided. Although a number of auctions do publish prices after the auction the lack of an overall comparison makes it a tedious exercise obtaining an overview. In addition some outputs are only available to subscribers to that system. Our piloted approach envisages an open system that bridges a market information gap. 75

78 INTERNET INDIVIDUAL AUCTIONS EUROPEAN MARKET DATA USER various auctions NORMALISED DATA summary data CENTRAL DATABASE In addition to being able to having information from a number of locations available from a single source the data itself would be standardised for product, presentation and currency. Examples of Auction Prices already published on the internet are given in appendix 4. There are several discrete steps in producing the pilot combined information. 1. Each auction must produce an extract of basic information from its system in a form that can be read into an excel file. As can be seen below these, when received, are quite different in appearance and require conversion to a standard. 2. A series of data manipulations are established for each auction and these applied to the data received to reduce the data to a common format. With one of the auction using over five hundred codes to describe not more than fifty species it is clear that local subdivisions on presentation, quality and size are important. 3. The pilot concept is to explore the practicality of combining data and so the highest level, species, has been adopted. Although it is possible to make comparisons across auctions using the EU grade and size classification this has not been done as part of the pilot but may be a future level of information. 4. Using standard scheduling software a routine pick up of auction files is made, for the pilot every hour, the (new) content converted to a standard layout which is sorted and saved. 76

79 5. These standardised files are then combined to produce the multi-auction report which, is automatically uploaded to the web site using FTF. 6. This is published on prices.htm It is intended that the pilot shall run for several months to allow its operation and effectiveness to be evaluated. During this time it may be that other auctions will agree to submit their data for inclusion. Better information could make the market more effective (and hopefully more attractive to buyers). The aim, and measure, of this will be in first sale prices achieved for fresh captured fish sold through auction or by the auction in mediation. 77

80 APPENDICES 1. List of Fishing Ports and Auctions EU Atlantic & North Sea 2. Questionnaire (see also for results) 3. National Statistics 4. Examples of Price Information Published by Auctions 5. EEZ Demersal Catch Trends (see 6. Presentation to Seminar (see PP.ppt) 7. Paper by Dominique OUDIN e-auction development 8. Paper by Marc-Vincent FUHLHABER Le Système des Criées en Europe: Mieux le Comprendre pour assurer son Avenir 9. First sale prices at 2004 prices for different species 10. Examples of quality labels applied to fisheries (and aquaculture) 11. Expert Visits 78

81 Appendix 1 List of Atlantic and North Sea Fishing Ports and Auctions (EU) COUNTRY - REGION PORT Auction DENMARK Nordjylland Skagen Nordjylland Hirtshals Viborg Hanstholm Ringkobing Lemvig Ringkobing Thyboron Ringkobing Thorsminde Ringkobing Hvide Sande Ribe Ejsberg GERMANY Lower Saxony Cuxhaven Lower Saxony Bremerhaven NETHERLANDS Noord Holland Den Helder Noord Holland Den Over Flevoland Urk Zeeland Breskens Freisland Harlingen Noord Holland Ijmuiden Groningen Lauwersoog Zuid Holland Scheveningen Zuid Holland Stellendam Zeeland Colijnsplaat Zeeland Vlissingen BELGIUM Flanders Oostende Flanders Nieupoort Flanders Zeebrugge UK England Amble England Bangor England Bridlington England Brixham England East Looe England Falmouth England Fleetwood England Grimsby England Hull England Kingswear England Lowestoft England Newlyn England North Shields England Padstow England Plymouth England Poole England Portsmouth 79

82 England Scarborough England Shoreham England Weymouth England Whitby England Whitehaven Northern Ireland Ardglass Northern Ireland Kilkeel Northern Ireland Portavogie Scotland Aberdeen Scotland Campbeltown Scotland Castlebay Scotland Eyemouth Scotland Fraserburgh Scotland Kinlochbervie Scotland Kirkcudbright Scotland Kirkwall Scotland Kyle Scotland Lerwick Scotland Lochinver Scotland Mallaig Scotland Montrose Scotland Oban Scotland Peterhead Scotland Pittenweem Scotland Scalloway Scotland Scrabster Scotland Stornoway Scotland Tarbert Scotland Tobermory Scotland Troon Scotland Ullapool Scotland Wick Wales Milford Haven IRELAND Clare Carrigaholt Cork Ballycotton Cork Baltimore Cork Bantry Cork Castletownbere Cork Cobh Cork Crosshaven Cork Kinsale Cork Schull Cork Union Hall Donegal Burtonport Donegal Downings Donegal Greencastle Donegal Killybegs Donegal Malin Head Donegal Moville Donegal Rathmullan 80

83 Dublin Dun Laoghaire Dublin Howth Dublin Skerries Galway Aran Isles Galway Carna Galway Rossaveal Kerry Castlegregory Kerry Dingle Kerry Fenit Kerry Portmagee Louth Clogherhead Mayo Achill Waterford Dunmore East Wexford Courtown Wexford Duncannon Wexford Kilmore Quay Wexford Wexford Wicklow Arklow Wicklow Wicklow Helvick Valentia FRANCE Aquitaine Arcachon Aquitaine Bayonne Aquitaine St Jean-de-Luz Brittany Audierne Brittany Brest Brittany Concarneau Brittany Dournenez Brittany Erquy Brittany Guilvenic Brittany Ile d'yeu Brittany Lesconil Brittany Loctody Brittany Loguivy Brittany Lorient Brittany Quiberon Brittany Roscoff Brittany St Geunole Brittany St Gilles Brittany St Malo Brittany St-Quay-Portrieux Charante Maritime La Cotiniere Charante Maritime La Rochelle Charante Maritime Royan Loire Atlantique La Turballe Loire Atlantique Le Croisac Nord Pas de Calais Boulogne Nord Pas de Calais Dunkirque Nord Pas de Calais Grand-Port-Philippe Normandy Cherbourg-Cotentin 81

84 Normandy Dieppe Normandy Fecamp Normandy Grandcamp Normandy Granville Normandy Honfleur Normandy Le Havre Normandy Port-en-Bessin Vendee Les Sables d'olonne Vendee Noirmoutier SPAIN Andalucia Algeciras Andalucia Ayamonte Andalucia Barbate Andalucia Bonanza Andalucia Cádiz Andalucia Cartaya-Guadarranque Andalucia Conil de la Frontera Andalucia El Puerto de Santa María Andalucia Huelva Andalucia Isla Cristina Andalucia La Línea de La Concepción Andalucia Lepe Andalucia Punta Umbría Andalucia Sanlucar de Barrameda Andalucia Tarifa Asturias Avilés Asturias Bañugues Asturias Candás Asturias Casariego Asturias Cudillero Asturias Figueras Asturias Gijón Asturias La Caridad Asturias Lastres Asturias Llanes Asturias Luanco Asturias Luarca Asturias Ortigueira Asturias Oviñana Asturias Puerto de Vega Asturias Ribadesella Asturias San Juan de la Arena Asturias Tapia de Casariego Asturias Tazones (Villaviciosa) Basque Arminza Basque Bermeo Basque Ceirvana Basque Elantxobe Basque Fuenterrabia Basque Guetaria Basque Lekeitio 82

85 Basque Mortico Basque Mundaka Basque Ondarroa Basque Orio Basque Pasajes de San Juan Basque Pasajes de San Pedro Basque Santurce Basque Santurzi Basque Zierbana Basque Zumaia Canarias Candelaria Canarias Nostra Sra de la Consolacion Canarias Nostra Sra de la Neives Canarias Puerto de La Cruz Canarias San Miguel de Tajao Canarias Santa Cruz de Tenerife Canarias Tazacorte Canaries Agaete Canaries Alajero - La Gomera Canaries Alcalá - Guía de Isora Canaries Arico Canaries Arona Canaries Arrecife Canaries Castillo del Romeral Canaries Corralejo Canaries Garachico Canaries Gran Tarajal (Tuineje) Canaries Icod de los Vinos Canaries Isla de la Graciosa Canaries La Laguna Canaries La Oliva-Fuerteventura Canaries La Restinga (Frontera) - Isla del Hierro Canaries Las Palmas de Gran Canaria Canaries Mogan Canaries Morro Jable (Pájara) Canaries Playa de Arguineguin Canaries Puerto del Rosario Canaries San Andres Canaries San Nicolás de Tolentino Canaries Santa Cruz de La Palma Canaries Tacoronte Canaries Valle Gran Rey-La Gomera Canaries Yaiza Cantabria Castro Urdiales Cantabria Colindres Cantabria Comillas Cantabria Laredo Cantabria San Vicente de la Barquer Cantabria Santander Cantabria Santoña Cantabria Suances Cape Verde Palmeira Galicia A Coruña Galicia Arcade - Soutomaior 83

86 Galicia Ares Galicia Baiona Galicia Barallobre Galicia Boiro Galicia Bueu Galicia Burela Galicia Camariñas Galicia Cambados Galicia Camelle Galicia Cangas de Morrazo Galicia Cariño Galicia Carnota Galicia Carreiro y Aguano Galicia Carril Galicia Cayón Galicia Cedeira Galicia Cee Galicia Celeiro - Vivero Galicia Corcubión Galicia Corme Galicia El Pindo Galicia Ferrol Galicia Finisterre Galicia Foz Galicia Isla de Arousa Galicia LA Guardia Galicia Lage Galicia Laxe Galicia Lira - Carnota Galicia Lourizán Galicia Malpica Galicia Marín Galicia Mera - Oleiros Galicia Miño Galicia Moaña Galicia Mugardos Galicia Muros Galicia Muxía Galicia Noya Galicia O Grove Galicia Oleiros Galicia Pontedeume Galicia Pontevedra Galicia Porto de Bares Barquero Galicia Portonovo Galicia Portosín Galicia Puebla de Caramiñal Galicia Puerto del Son Galicia Raxó Galicia Redondela Galicia Rianxo Galicia Ribadeo Galicia Sada Galicia Sangenjo Galicia Santa Eugenia de Riberia 84

87 Galicia Santa Uxía Galicia Sta. Cristina de Cobres Galicia Vicedo Galicia Vigo Galicia Vilagarcía de Arousa Galicia Vilaxoan Galicia Villajuan de Arousa Galicia Villaneuva de Arousa PORTUGAL Aviero Aviero Coimbra Figueira da Foz Faro Lagos Faro Olhao Faro Portimao Faro Quarteira Faro Sagres Baleeira Faro Sta Luzia Faro Tavira Faro V R S Antonio Leiria Nazare Leiria Peniche Lisboa Cascais Porto Matosinhos Porto Povao de Varzim Setubal Sesimbra Setubal Setubal Setubal Sines Viana do Castelo Viana do Castelo Azores Sao Mateus Azores Praia de Vitoria Azores Praia da Graciosa Azores Velas Azores Madelena Azores Ribeiras Azores Faial Azores Lajes Azores Corvo Azores Vila do Porto Azores Santa cruz - Flores Azores Ponta Delgado Madiera Porto Santo Madiera Funchal Madiera Canical 85

88 National Statistics Landings by Port Appendix 2 IRELAND (source Department of the Marine and Natural Resources) 86

89 United Kingdom (source DEFRA: Sea Fisheries Statistics 2003) 87

90 88

91 Landings by EU (not UK) and EEA vessels into UK in 2003 COUNTRY DEMERSAL SHELLFISH PELAGIC TOTAL Tonnes Value Tonnes Value Tonnes Value Tonnes Value ooo million ooo million ooo million ooo million BELGIUM DENMARK IRELAND FRANCE GERMANY NETHERLANDS SPAIN FAROES ICELAND NORWAY TOTAL Landings by UK vessels to countries other than UK in 2003 COUNTRY DEMERSAL SHELLFISH PELAGIC TOTAL Tonnes Value Tonnes Value Tonnes Value Tonnes Value ooo million ooo million ooo million ooo million BELGIUM DENMARK IRELAND FRANCE GERMANY NETHERLANDS SPAIN FAROES ICELAND NORWAY TOTAL Catch and Landings Fishing Port activity DEMERSAL SHELLFISH PELAGIC TOTAL Tonnes EURO Tonnes EURO Tonnes EURO Tonnes EURO ooo million ooo million ooo million ooo million UK Fleet CATCH LESS landed abroad TOTAL UK FLEET ADD EU+ landed UK TOTAL LANDED UK

92 France 90

93 DENMARK (source Fiskeridirektoratet) 91

94 BELGIUM (source: Ministerie van de Vlaamse Gemeenschap) 92

95 NETHERLANDS (source Newlyn harbour Commissioners 93

96 PORTUGAL (source: Instituto Nacional de Estatística) 94

97 QUESTIONNAIRE Appendix 3 Although 3 levels of questionnaire were produced and issued in four languages (English, French, Spanish and Portuguese) only the top level is reproduced here. Like all questionnaires where response is not mandatory the answers provided were selective with forms returned incomplete or not at all. Nonetheless sufficient responses were received and, in combination with verbal input and expert visits to a few selected port auctions, these provided a rich source of supplementary information that has influenced the production of this report.. 95

98 96

99 97

100 98

101 99

102 100

103 101

104 102

105 EXAMPLES OF AUCTION PRICES PUBLISHED ON THE WEB APPENDIX 4. Denmark Hanstholm Hirtsals Thyberon Germany Bremerhaven user name and password required 103

106 Netherlands Urk user name and password required Del Vissoort +/- Vaartuig Laatste Laatste Kg Gem Min Max Totaal Kg Kab. 1 TX004 6,17 5 6,17 6,17 6,17 5 Kab. 2 + TX038 7, ,83 5,52 7,18 52 Kab. 3 + TX038 6, ,19 5,28 6, Kab. 4 + TX038 4,55 7 3,97 3,51 4,99 62 Kab. 5 - HD004 2,75 9 2,99 2,63 3,11 71 Heek gr HD004 2, ,65 2,65 2,65 18 Heek mi + TX038 2,38 1 2,17 2,17 2,38 59 EFICE user name and password required: Breskens, Den Helder, Den Oever, Harlingen, Urk, Vlissingen, Lauwersoog Vissoort BRE DEN EVO HAR LAU OEV URK VLI Tong Gr 18,71 20, , ,43 20,98 19,89 Tong Grm 16,28 15, , ,20 15,60 15,21 Tong Klm 12,71 10, , ,00 11,03 10,53 Tong 1 9,51 9, , ,22 9,37 8,48 Tong 2 7,62 7, , ,53 7,07 7,14 Tong Grm D , ,80 15,

107 Ijmuiden United Fish Auctions Stellendam, Colijnsplaat, and Scheveningen (view individually) Belgium Oostende 105

108 Zeebrugge UK Article Quality Supplies Unit Price AVG Max Curr COALFISH GT IC NO XX A 72 KG EUR COALFISH GT IC NO XX A 784 KG EUR COD LO IC NO XX A 20 KG EUR COD GT IC NO XX A 2991 KG EUR COD GT NI NO XX E 12 KG EUR HAKE GT IC NO XX A 52 KG EUR HAKE GT IC NO XX A 5 KG EUR LING GT IC NO XX A 186 KG EUR MIXED RAY RO IC NO XX A 135 KG EUR MONK TL IC NO XX A 68 KG EUR NORWAY LOBSTER WH IC NO XX A 323 KG EUR PLAICE GT IC NO XX A 724 KG EUR Peterhead a number of independent fish salesmen operate at Peterhead. One, Caley Fishselling, publishes a daily table of prices obtained and converts the box price to a kilogramme price (GBP). Fraserburgh prices are lowest and highest in GBP per box (nominal 50kg) Grimsby 106

109 France CCI Quimper user name and password required: individual auctions have to be viewed Douarnenez - St Guenole Guilvenic Loctody Lesconil Audierne - Concarneau Inland Wholesale Markets 107

110 Billingsgate UK Mercabarna Spain 108

111 Appendix 5 EEZ Demersal Catch Trends (see 109

112 Appendix 6 Presentation to Seminar (see PP.ppt) 110

113 Appendix 7 Paper by Dominique OUDIN (Université de Bretagne Occidentale) e-auction development 111

114 Appendix 8 Paper by Marc-Vincent FUHLHABER (University of Nantes) Le Système des Criées en Europe: Mieux le Comprendre pour assurer son Avenir Conclusion: 112

115 113

116 114

117 First point of sale fish prices - trends Based on UK DEFRA data and UK RPI indexes Prices have been converted to 2005 January level Appendix Price Trends Brill Catfish Cod Dogf ish Haddock Hake Lemon Soles Ling Megrims Monks or Anglers Plaice Pollack (Lythe) Saithe Nephrops Skates and Rays 115

118 Appendix 10 Examples of Quality branding for fisheries Ecological labels Used to denote that the fishery has been accepted as meeting certain ecological standards such as sustainability, selective fishing practices etc. The most widely known of these are: the Marine Stewardship Council award and Dolphin Friendly. Quality Labels Within the EU the more common type of label is attached to a branded product i.e. one supplied by a particular processor and applied to a product not to a source of fish. A more recent trend is the adoption and application of quality marks by retail groups (e.g.carrefour). Producers and their primary sales arm, auctions, have a few examples in place. Celeiro long lined hake the last days catch Tarragona again freshness is the key Normandie inshore day catch Dunmore East line caught mackerel In the aquaculture sector where Scottish Quality Salmon and Label Rouge guarantee higher prices There are others, some initiatives have faltered (Silver Sealed - Ijmuiden) but it is expected that this is a worthwhile area for development and differentiation of product for more reward 116

119 Expert Visits Appendix 11 Zeebrugge (Zeebrugse Visveiling) - Belgium Zeebrugse Visveiling was built, as a private investment, on a greenfield site as the lynchpin of the European Fish Centre a development area in Zeebrugge dedicated to the fishing sector. Opened in 1993 it replaced the ancient municipal auction hall which was then converted to leisure and other commercial activities, as was the old fish dock which became a yacht marina. As a new build the auction was designed to provide for separation of the fish through each stage (landing, holding storage, sorting and grading and weighing, display prior to sale, auction room, and distribution. Linked to the auction by a chilled corridor is a complex of some 60 processing units. From the outset sale was by electronic bidding and Zeebrugge has embraced remote buying. The auction process begins when a producer notifies what he has on board, when and where he intends to land. With a significant part of the Belgian Fleet s quota in the Bay of Biscay and Irish Sea/Bristol Channel the boats will land close to the grounds (Milford Haven or La Rochelle). The auction will organise transport of the catch from the port of landing to Zeebrugge; replenishment of fish boxes, provisions et cetera. At Zeebrugge the catch, whether discharged by a vessel alongside the auction or trucked from a remote landing port, inevitably enters the auction itself during darkness. A tally of receipts is made and the fish held in chilled storage until graded for the sale. Overnight the fish is sorted, weighed, repackaged and recorded on the auction system. Sorted by species, size and quality each box of repackaged fish being 40kg or thereby. The actual weight is automatically transferred to the auction system computer and a printed ticket placed in each box. 117

120 Zeebrugge applies the QIM quality standard and so provides a level of information beyond the basic EABC standard. Participating in developing QIM since the beginning the auction has trained inspectors. The application of an accredited quality assessment scheme is considered to be important where purchases are made over distance and the time since capture could be from one to ten days. Dover Sole is Zeebrugge s most important species although perhaps 30 species may be sold daily. Following sorting and grading the fish is set out on the sale hall where, if they wish, buyers may inspect lots before the sale. The sale itself is conducted in the auction chamber where data concerning each lot is displayed as it comes forward for sale. Bids are on a falling price basis with the clock stopped automatically by computer signal. Operating over the internet buyers, perhaps a thousand kilometres from the sale, have equal opportunity against buyers sitting in the sale room itself. Although purchase from their own office is possible many buyers still attend the early morning auction. It is a social and business event. Buyers purchase against a bank guarantee (bond). As the sale progresses information on the buyers is relayed to staff on the floor of the auction hall and they assemble lots for distribution and delivery to the buyer. This could be internal delivery to one of the buyers with premises on the site, placing in the distribution area for collection or arranging for delivery to a remote customer. Whilst this has been going on boxes, owned by the auction or in some instances by the boat, have been issued to vessels; received back from buyers, washed and returned to stock. A system of charging for boxes and box services is applied. 118

121 Celeiro (Puerto de Celeiro) - Spain Located on the extreme northern tip of Galicia the community of Celeiro is dependent on fishing and, in 1994, the fishing vessel owners created a company to manage and develop the port, its auction and services. All 65 ship owners participated in launching this company and have created an integrated group of companies from this that take a strategic position and apply commercial management towards medium and long term objectives. Distance from the main service centres has led to the Grupo Puerto Celeiro spawning a number of support companies. It is an example of directed integration. The smaller neighbouring fishing ports of San Ciprian and Foz have decided to associate with Celeiro. Modernisation and upgrading of the fleet was, of course, seen as important but not content with this the continual upgrading of the fleet has been matched by the Group (as opposed to individual vessel owners) acquiring additional fishing entitlement, creating companies and forming partnerships to support activity, undertaking significant investment on infrastructure and embarking on positive marketing actions. Most obvious of these is the new ( ) auction hall more correctly referred to as a distribution centre by Celeiro which has a 30,000 m 2 footprint and is an integrated facility incorporating: 6 refrigerated sale rooms combined area of 4,000 m 2 6,000 m 2 of Merchant premises Chill storage 3 chambers Cold Storage (-25 o C) for 2000 tonnes Distribution logistics area with 10 chill doors Elements of the fleet fish North western waters and land their catch into UK ports (Lochinver in NW Scotland and Milford Haven in Wales) where the fish is received and transported back to Celeiro for sale. This enables vessels operating far from their home port to land their catch at short intervals. 119

122 Fish from the Celeiro fleet is, in common with most of the Spanish fleet, carefully boxed on board after being gutted and washed. The box is half the capacity of Northern European fish boxes and the fish is covered by a sheet of polythene before ice is applied: fish rooms are refrigerated. When the boxes of fish are received at the port the ice is removed (without disturbing the fish by using the plastic sheet) and the fish is then weighed and graded with a ticket produced for each box. Unique numbering of boxes (bar code) is being integrated with information on content to produce a seamless and secure chain of information on the product. Of course the system also provides an enhanced level of security with a check that the purchased box is the one received. This is important in building customer confidence particularly as these can be remote and where the desire to minimise handling of fish is facilitated by keeping the fish in the same reusable box through the supply chain. Ultra fresh hake (last days catch) is selected and individually tagged for sale as a branded product that commands a premium price. In this is a fully accredited scheme each fish is given uniquely numbered tag and this is cross referenced back to the catching vessel, day of capture, area et cetera. Celeiro is proactive in marketing its production. 120

123 Den Helder - Netherlands The auction at Den Helder is an independent company owned by the local fishermen s cooperative and it operates under common management in tandem with the auction at Den Oever. Targeting flatfish the fleet is of beam trawlers, a method of fishing that requires powerful engines. As such the fuel price increases since 2003 have had a dramatic effect on the viability of the fishery with a cost increase that is not compensated by increase in fish prices indeed in 2004 fish prices were weak. Den Helder fish auction is the second largest auction in Netherlands (Urk is No 1) with sales of some 35 million of fish in 2004 (this is, in common with the rest of the Dutch fisheries, down by 45% on the 2000 level). Den Oever, its sister auction, is down from 15 million to 10 million. Vessels from Germany, Britain, Belgium and Denmark use the facilities of the port for landing fish when fishing in the area (sometimes selling through the local auction) and Den Helder is also a main landing port for the fishing fleet of Urk which, being landlocked receives its fish overland. As the fleet landing into Den Helder fishes short trips (3-5 days) the quality of the fish is good and this is maintained through strict control over the cool chain from landing to distribution. Fish is gutted and cleaned before boxing in ice on board and on landing placed into chill chambers until sorted for size and quality before sale. Each box is weighed and ticketed for sale. The auction sells by lot using the Aucxis system and is part of the EFICE network which comprises of nine auctions (7 in the Netherlands) employing the same procedures and with some shared services. Although part of the same electronic selling system as Urk it was noted that the vessels from there, landing into Den Helder, opt to send their catch to Urk for sale this is almost 140 kms by road. On comparing prices obtained at the two ports there was little difference, indeed taking account of transport cost perhaps slightly in favour of Den Helder. The reasons for this are therefore assumed to be social rather than commercial. 121

124 The average price for Dover sole in 2004 was 2% lower than in 2003 (before adjusting for inflation) and plaice fared even worse down in price by over 10% and also suffering a 6% reduction in volume. Indeed overall the value of the catch dropped by some 23 million. millions Netherlands Fish Value Trend Dover Sole Plaice Cod Saithe Haddock Whiting Turbot Lemon Sole Dab This trend shows little sign of reversal and the impact on the viability of producer and auction is serious. The reasons for the fall in fish prices in the face of reduced catch levels are not always apparent. The Netherlands has long been an importer of fish with its own catch only representing between a quarter and a third of the fish processed 80% for export. However it appears that lacking a guarantee of supply from the EU fleet processors have sought alternative, additional supplies from 3rd countries. These need not be straight replacements (i.e. similar fish but simply product that can keep factories operating. The instability that has developed through increased globalisation and in particular the impact of imported alternative species has prompted a review of the market position and an examination of market forces and options. With up to 50% of the operating cost of a beam trawler currently going towards meeting fuel costs this is the most immediate threat to their survival. Over the longer term costs must not only be managed but income maximised. Fuel prices are governed by external factors. The oil price trend over the past year has been irregular but upwards and analysts predict that it is likely to continue to rise. Raising first sale fish prices represents the greatest challenge to the seller and, with Holland s auctions all in (relatively) close, this should be addressed in a coordinated manner. 122

125 Sesimbra (Docapesca) - Portugal With its main fishery only hours offshore the freshness of the fish is paramount and so prompt landing and frequent auction is a feature. Unlike the auctions of Belgium and the Netherlands, which have 3 auctions per week, there are auctions Monday through Saturday: indeed with 2 auction clocks, one of which is for the main species of black scabbard, there are 32 sales sessions per week. The port and auction are vibrant and the number of fishermen is reflected in the fact that at Sesimbra there are 186 fishermen s stores. A varied fishery is undertaken from seine netting for pelagic species to long lining for deep water scabbard. As a result more than 30 species will be auctioned from a single fish to multiple box lots. When we visited the seine fishing fleet was working offshore with support vessels (8 to 10 metres) operating a shuttle between port and their operations delivering ice and returning with fish. Perhaps the most noticeable difference to northern fisheries and auction practices was that, although fish is sold by the EU grade and size, it was not graded on shore prior to sale. Instead the ice was removed, fish weighed and the sale price per kilogramme. Docapesca dispensed with grading by the auction as it was not viable. Fish is generally ultra fresh, inspected by veterinaries for deviation, and size sorted at capture: grading should add value not detract from it by unnecessary handling. Weighing of the fish in its box is by auction staff with automatic entry on to the computerised auction system and a printed ticket placed in the box [Docapesca are the box suppliers and with pelagic and demersal fisheries has two main sizes. The standard size is in fact produced on their own mould - a considerable saving]. With perhaps less capital investment in super-trawlers, acceptance of lower earnings and catch levels not so savagely affected as in northern Europe the Portuguese fishing sector may be better placed to weather current difficulties. These advantages may be short lived as living standards and earnings expectation increase leading to mechanisation. Fish is fickle even without TAC s catch levels fluctuate. Nevertheless it did appear from our visit to Sesimbra that these risks are understood and employment levels should remain high. Sale is an open process with buyers seated on a gallery within the fish hall. They have a view of the fish and bid using a radio button system. Perhaps 80 buyers were present when we attended the afternoon sale with bidding brisk and competitive on all species. After sale fish is quickly distributed to processor, merchant and fishmonger. However, from the aspect of this study, the cohesion achieved through Docapesca in marketing and supporting the catching sector is most noticeable. Its ability to take a strategic view and formulate medium and long term plans is refreshing. 123

126 Concarneau 124

127 (CCI Quimper) France The national port of Concarneau has been associated with fishing since the middle ages. Like many fishing communities it thrived on an extensive blue fishery during the 19 th century when boats from Concarneau set sail to capture sardines. Canning replaced dried and salted fish and Concarneau became a centre for this - at its peak employing 30% of the population. The shift in the movements of sardine shoals at the start of the 20 th century created the first crisis in fishing at Concarneau causing great social hardship. The other mainstay of the port - tuna took on greater importance and ultimately led to Concarneau being the base for today s distant water tuna fleet. However the Dundee s of Paul Signac s 1924 painting (inset) have been replaced by ocean going factory ships that operate for years at a time in the Gulf of Guinea and the Indian Ocean opposite is a rare sight in Concarneau, one of its tuna fleet berthed alongside. Frozen tuna is delivered by y reefer ship. With globalised economics, most of the frozen at sea catch is sent to third country canning factories close to the grounds. Trawling gradually became the dominant activity with the inner harbour being formed to meet the needs of this fleet. This included a fresh fish auction. The Chambre de Commerce et d Industrie de Quimper Cornouaille (CCI), which can trace its origins back to 1882, has commercial responsibility for Concarneau. The CCI has responded to emerging requirements by continuous upgrade of auction facilities, endeavoured to anticipate market demands and generally fostered and invested in support services. The latest of these is a dry dock which can take vessels up to 120 metres overall and complements the ship lifts (2000 tonne maximum) that allow extensive vessel construction, maintenance and painting facilities at the port. 125

128 Ten years ago a fleet of some 28 deep water trawlers (34-38 metres) operated from the port and their catch was an important part of the auction throughput. In recent years this fleet has been cut back and now comprises just over half that number. For a number of reasons the fleet may now land and sell its reduced catch through other auctions, sell on contract or privately. This has had a significant impact on the nature of the auction: from 21,000 tonnes as recently as 2002 it was down to 13,500 tonnes in 2004! Although the port has suffered from fleet reduction and the transfer of vessel operations to base avancée and neighbouring harbours it remains one of France s principal fishery auction ports with fishing still a key element of the economy. Fresh fish is sorted and weighed on arrival for sale at the morning auction by transmitter bidding on a mobile electronic clock system the buyers having rejected the use of a saleroom. Quality is considered to be the key to continued success and with a large number of day boats supplying the market it comes in ultra fresh and that quality is not lost through the auction process. Attention to the cool chain evident. From chilled fish hall, application of fresh ice at all stages, processing and repackaging in adjoining premises, and distribution through a chilled platform (gare de maree). The auction operator (CCI) provides a range of support services has responded to falling fish landings in a number of ways. An example of this is the provision in 2004 of insulated bulk bins for the sardine fishery. These are taken to sea and allow the sardines to be immediately placed in an ice/sea water slurry. Discharge is eased and a fresher product to be brought to market. This improved quality has resulted in increased prices. Operating 7 fresh fish auctions the CCI has invested in electronic auction selling systems at them all and is looking to interconnect them at some point in the future. Buyers can download data on their purchases at the end of sale and indeed transfer it to their own systems using EDI: a paper record is present in the form of the box ticket that is printed and attached after sorting and weighing. This holds all of the information required for traceability. The most important fish to the auction today are: 126