7/9/2007 - Putting a stop to rotten fish

Russian inspections tightening the grip to protect their growing consumer market. (Photo: FIS)

WEEKEND FEATURE: Putting a stop to rotten fish

RUSSIAN FEDERATION
Friday, September 07, 2007, 23:50 (GMT + 9)


Gone is the time when cheap, low quality goods could be poured into the all-absorbing Russian market. Their authorities have now scared seafood exporters from countries worldwide. Suddenly they have stopped all imports from facilities that are not approved by their own nation's health authorities.

Norwegian salmon exporters were in shock when the Russian Federal Service of Veterinary and Phytoveterinary Surveillance (VPSS), at the beginning of last year, temporarily closed down the import of Norwegian salmon. The official reason was the discovery of salmon contaminated with heavy metals.

Norwegian authorities and the salmon farming industry denied that this could have happened. However, in the background lurked the shadow of contaminated ingredients used in the production of salmon feed. One researcher working for the Norwegian Food Safety Authority publicly gave support to the Russian accusations. She was quickly silenced.

The large feed producer EWOS, which had to withdraw feed from the market due to contamination from cadmium, was able to quickly prove that only one in four consignments of salmon were found to be contaminated by this substance as well as lead traced to feed from their company. So though apparently the problem was not due to their feed, the situation remains a great mystery.

Seafood and dirty fire wood

Upon this apparent slap in the face, the Norwegian salmon industry was in an uproar. The fastest growing large market was suddenly closed off to them. The Norwegian Food Safety Authority this week announced, during a conference for the pelagic industry held in Bergen, that they would intensify the controls over trucks used to transport fish to the markets.

The reality is that competition for transport of chilled or frozen fish is so stiff, there is hardly any money to be made. Transporters are desperately looking for return cargo from markets where salmon and other fish is delivered. In fact, they are usually willing to bring back whatever cargo is available. Trucks transporting salmon to the Baltic are filled with dirty fire wood for the return trip. The industry has not focused on what had been in the trucks transporting the contaminated salmon to Russia.

The largest Norwegian transporter of chilled fish, Johannes Lunde AS, last year lost NOK 26.6 million in a turnover of 161,9 million. Another company controlled by Lunde AS is Nordan Transport & Spedisjon AS had a turnover of NOK 151.2 million and a loss of NOK 14.3 million. These two companies illustrate the tough competition.

Times are tough. Without return cargoes, no chance for these transporters to turn a profit exists. Perhaps Norway would be better off making rules for exactly what content is allowe as return cargo.

Protecting Russian consumers

At least the Russian VPSS has made Norwegian authorities push for improved quality control. Not many believe that Norway has a sub-standard seafood industry. However, there is no reason to believe it is infallible. Neither is there reason to believe that their salmon was contaminated during the transport.

In fact, there are many more reasons to believe that the salmon was in up to norms. But Russian checks showed different results and they reacted in the only correct way. They protected Russian consumers.

It is possible, also, that the Russians were not wrong, however nothing has been proven as yet, and the Norwegian industry prefers to believe contamination is a Chinese issue, not a Norwegian one. Russia, however, knows there is a problem, and as the country moves towards a higher average standard of living, the intensive controls involving exporters in more than 20 countries have been put in place for safeguarding.

Controlling pelagic facilites

This week a group of Russian inspectors leave Norway upon inspecting a number of processing facilities for pelagic fish. Only nine processing facilities for salmon are currently allowed to export to Russia. This limitation gives Russia an easier task in controlling the payment of import duties, and lessens the chance of loop holes in the import declarations to avoid taxes and duties by camouflaging produce.

If it works, or whether the Russian border is porous due to corrupt officials allowing salmon across the border under a herring or other cheap fish disguise is another question. In Moscow they have at least started the process of cleaning up their act, or at least their image.

In the wake of what the Russians are doing to safeguard against being used as a bin for substandard products, the global markets are abuzz with rumours. When one Lithuanian and one Chilean company were denied entry to the Russian market with their seafood products, it was expected that all Chilean exporters would be barred from the Russian market.

This happened with Norwegian salmon exporters, when they were all barred from the Russia market.

The Russian newspapers Kommersant and Vladivostok Times further fanned the flames, writing that the Federal Service of Veterinary and Phytoveterinary Surveillance would prohibit imported fish and fishery products to be effective as of 1 July this year.

Stopped the pangasius import

Russian food safety inspectors arrived to Vietnam in March to conduct an inspection tour of fish processing facilities, fishery ports, and aquaculture facilities, as well as fish markets. The Federal Service of Veterinary and Phytoveterinary Surveillance inspectors were there to ensure that seafood shipments being exported to the Russian market were complying with food hygiene requirements. They quickly found problems, bringing them to put a halt to imports.

The growing export of Vietnamese pangasius to the important Russian market was also stopped. But a few weeks ago some relief was in sight after Russia announced that 11 Vietnamese seafood companies could resume exports to their market. The go-ahead is a result of recent inspections of Vietnamese processing facilities meeting a clean bill of health and necessary compliance to norms. Again, the number of exporters has been reduced giving Russian authorities control.

It was first announced at end of July, by the Vietnam Association of Seafood Exporters and Processors, that the Russian authorities had approved 20 companies. So the number of approved exporters could be increased further.

The 11 Vietnamese seafood companies that were given permission to access the Russian market, according to a report published on FIS.com include: Frozen Food Factory No 7 under Agifish; the Southern Seafood Industrial Co Ltd; Cafatex; Changhua Vietnam; NTACO; the Branch of Ben Tre-based Dong Bang Xanh Co Ltd; Basa Joint Stock Company; Pacific Asia Frozen Seafood Factory under Nam Viet Company; Cho Lon Factory; Factory No 4 under the Ba Ria-Vung Tau Seafood Import-Export Processing Company.

These are all modern facilities able to produce under rigorous quality assurance regimes. In addition the authorities decided that all Vietnamese seafood has to enter Russia via St. Petersburg or the Vladivostok port.

Russia takes control

Russian authorities are clearly showing the world that they are taking control of their market. This may be due to the fact that Russian fleet is a disaster, and if it is to be rebuilt, it can only happen if Russian-caught seafood can compete with seafood imported in accordance with Russian regulations.

Strict rules on imports do not favour Russian producers, but it does bring a halt to cheating and tax evasion, which makes locally produced seafood less competitive.

At the same time Russia is implementing standards, which Europe, the United States, and many other countries have been enforcing for many years.

The licence to export to Russia is a golden opportunity, as the Russian market increases in size. And while the doors are open for top quality seafood, the doors are closing for those who try to make money on exporting rotten fish.

Related articles:

-Secrecy surrounds Russian inspection of pelagic plants
-Russian market not restricted for Chilean salmon producers, says SERNAPESCA
-Russia commences food safety inspection over Vietnamese fishing facilities
-Russian okays 20 Vietnamese firms for standards compliance


By Terje Engoe
www.fis.com