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Mackerel dispute hits Catch profits

Shetland Catch has seen profits fall from £5.6m to a loss of £6m due to a flood of cheap mackerel.

LERWICK pelagic fish processors Shetland Catch has blamed a £6 million loss last year on the ongoing international dispute over mackerel quotas.

The company said mackerel prices had plummeted after Iceland and Faroe flooded the East European market with cheap fish having massively increased their own quotas.

Chairman John Goodlad said the political row over mackerel was having real consequences on shore side businesses, but prices had started to stabilise.

Figures released this month show that Shetland Catch, Europe’s largest pelagic processor, turnover in the year until 31 March 2012 ell 31.4 per cent to £48.7 million.

A pre-tax profit of £5.6 million had been followed by a £6 million loss, with gross profit margins plunging from 23 per cent to just 10 per cent as a direct result of the influx of vast quantities of cheap mackerel from Iceland and Faroe.

The company has also been hit by a £150,000 fine coupled with a £1.5 million repayment order for their part in the biggest black fish fraud in Scottish history.

Shetland Catch said it welcomed the conclusion of the Operation Trawler investigation of landings between 2002 and 2005, and that it had until June 2015 to pay the penalty.

Goodlad explained that the biggest impact on the company’s profitability had been the mackerel dispute.

“In 2011 the buying price for mackerel remained very buoyant, but the price we sell at to the markets in Russia and Ukraine were very, very poor because of the influx of very cheap mackerel from Faroe and Iceland,” he said.

“This is another downside of the ongoing mackerel war between the EU and Norway with Faroe and Iceland. It is not just a political dispute, it is impinging on people’s businesses.

“I am pleased to say that the situation in the markets has stabilised somewhat this year, but it has given everyone, including Shetland Catch, a bad knock.”

The company had responded by developing new markets in eastern Europe, Africa, the UK and the Far East.

Meanwhile Goodlad said the future was looking “very, very good” for the company, pointing out that last week’s £3 million investment by Norway Pelagic taking doubling stake to 50 per cent was a sign of confidence.

The company figures showed the number of employees at Shetland Catch fell from an average of 96 to 89 during the year.

The remuneration of the highest-paid director fell from £254,000 in 2011 to £214,000 last year.