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Fuel Costs Continue to Created Challenges for the UK Fishing Industry

07 July 2014

UK - The operating profit margin for the overall UK fishing fleet increased slightly from 18 to 19 per cent between 2011 and 2012, while net profit margins also increased from 11 to 12per cent during the same period, according to the latest economic figures on the sector, based on vessel owners’ accounts, from Seafish.

The industry authority on Seafood’s latest UK fleet analysis suggests that the economic performance of the industry has remained stable, despite challenging economic conditions and the effects of bad weather, which limited average days at sea in both years.

The release of the latest survey data comes as Seafish calls for participation in the next fleet survey, which will be published in 2015, with an added focus on the Landings Obligation and its possible implications.

Researchers will be visiting ports across the UK over the coming weeks to speak to vessel owners and skippers from all sectors of the industry in order to collect data on fishing and vessel costs.

According to the latest data, although total income fell six per cent from £849 million to £803 million between 2011 and 2012, the continued profitability suggests the fleet has made adjustments to counter rising costs.

In terms of these costs, the majority of vessel owners who participated in the most recent survey said fuel costs were a significant challenge, as total expenditure on marine fuel increased one per cent to £155 million in 2012, compared to 2011. As a proportion of turnover, spending on fuel was estimated at close to one-fifth. Other costs that were identified as particularly challenging were those related to quota and the rising cost of bait.

Despite the challenges there were still many who said they were optimistic about the future of the industry, while a number of these said they had ambitions to expand or upgrade their current operations during the next few years.

John Anderson, Senior Economist at Seafish, said: “Our research indicates despite the particularly challenging financial environment, lower fish prices, lower incomes and higher fuel and quota costs, the UK’s commercial fishing fleer maintained operating profit margins in 2012.

“Debt repayment levels remain a concern however, with high debt to asset rations observed in several segments. And preliminary estimates suggest around two thirds of the UK fleet continued to experience decreased fishing income, gross value added and profits into 2013.”

Vessel owners can benefit directly from participation in the next round of research by requesting a free financial performance benchmark report which allows them to compare the performance of their own vessel with the average performance of other similar vessels. Participants will also be entered into a £250 prize draw.

Barrie Deas, Chief Executive of the National Federation of Fishermen’s Organisations (NFFO), said: “The stronger the economic information available, the stronger our ability to make the industry’s arguments to Government at national and EU level. That is why we at the NFFO consider this survey and vessel owners’ participation to be so important.”

Tom Pickerell, Technical Director of Seafish said: “Thanks to the participation of several hundred vessel owners, the Economics Team at Seafish has been able to accurately represent the economic performance of the UK fishing fleet for a number of years.

“Only with the continued support of the industry can we continue this hugely valuable exercise, producing outputs that allow us to better understand the industry as a whole and to inform key decision makers. Therefore, we would encourage skippers and boat owners across the UK to speak to our surveyors and complete the survey so that we can present the most accurate picture possible.”

Those interested in taking part in the next round of research should contact Steve Lawrence by emailing steven.lawrence@seafish.co.uk or call 0131 524 8632. The team of Researchers will also be tweeting regular updates as they work their way around the coast. Follow their progress @seafishuk, or on the Seafish website.

 

Further Reading

You can view the full report by clicking here.

 

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