Fishing - pelagic quota cuts 2026: business and regulatory impact assessment

Section 2: Engagement and Information Gathering

Engagement Approach

The approach to engagement has been shaped by the urgency of the situation, as the ICES-recommended quota reductions for 2026 will take effect from 1 January 2026. This action is being taken more quickly than would normally be desired, but it is underpinned by a robust evidence base, including previously drafted impact assessments, economic analysis, and historical landings data.

Engagement completed so far:

• Industry engagement: Individual meetings (via Teams and in-person) with pelagic catching businesses, processors, and port authorities to understand operational impacts and gather feedback on potential options.
• Policy and regulatory engagement: Consultation with Scottish Government policy teams and relevant regulatory bodies to ensure alignment with existing frameworks.
• Cross-government dialogue: Communication with other UK administrations and international partners to consider implications for trade and regulatory consistency.

Evidence and data sources used:

• Landings data – All commercial fishing vessels are required to provide information on their fishing activities. This includes species caught, area of capture, type of fishing gear used, and port of landing.
• Industry feedback gathered through roundtables and one-to-one meetings.
• Economic and social impact data from previous consultations, including BRIA and Islands Impact Assessment.
• Market analysis on price trends and competitiveness.

Internal SG engagement/ engagement with wider Public Sector

Internal SG engagement

There has been engagement across the Marine Directorate, including policy officials with responsibility for sea fish licensing and quota management, international negotiations, officials involved in trade and the internal UK market.

UK/ Devolved Administrations

Officials have engaged with governments in other parts of the UK during the policy development process, principally with fish licensing and quota management officials in other UK administrations. This engagement ensured, other UK FAs were aware of the policy development and that there was alignment on regulatory frameworks.

Wider Public Sector

Due to the very limited time available to develop this policy, officials have not been able to undertake engagement with wider public sector bodies such as Local Authorities, Convention of Scottish Local Authorities (COSLA), regulatory bodies, or Scotland’s enterprise agencies. The focus has been on urgent engagement with those most directly affected by the proposed changes — pelagic catching businesses, processors, and port authorities — to ensure that immediate risks to processing capacity and coastal employment are addressed. Wider engagement will be considered as part of the review of 2026 arrangements.

International

Engagement has taken place with other coastal states during international quota-setting negotiations to ensure Scotland’s position was considered alongside partners such as Norway, the Faroe Islands, and the EU.

The Norwegian Sales Organization for Pelagic Fish has indicated concerns that changes to landing obligations could affect Scottish vessels’ ability to access the Norwegian marketplace. They noted that Norway currently offers competitive prices for mackerel due to strong buyer presence and quality standards, and suggested that any restriction on access could have implications for vessel earnings compared to current arrangements.

Business / Third Sector Engagement

Approach and Coverage:

Given the urgency created by the exceptional 2026 quota reductions, officials prioritised direct engagement with businesses most affected. Engagement to date includes 26 one-to-one sessions with pelagic catching businesses, processors, and port authorities; meetings with the Scottish Pelagic Fishermen’s Association (SPFA) and the Scottish Pelagic Processors Association (SPPA); and internal/external roundtable discussions to test options.

Industry Feedback Summary

Processors

Viability thresholds: Primary processors require 20,000–40,000 tonnes of mackerel annually to maintain operations. Several stated that anticipated 2026 volumes fall well below viability levels.

Impact of quota cuts: The proposed reductions were described as catastrophic, warning of severe risks to continuity, workforce retention, and investment recovery. Some forecast losses of £4–5 million under a 50–70% cut scenario.

Pivot capacity: Plants are highly specialised for pelagic species; alternatives such as blue whiting were cited but deemed commercially marginal.

Price dynamics: Mackerel prices doubled in 2025 (from ~£1,700/t in January to £3,400–£3,450/t in autumn), creating cash-flow strain as processors must pay significantly more for reduced volumes. Margins were described as remaining constant.

Employment: Factories anticipate moving from 24-hour operations to single shifts, with seasonal roles most at risk. Skilled engineering and QA roles were highlighted as vulnerable.

Policy preferences: Strong support for strengthening the economic link licence condition on a per-species basis.

Processors also favour linking Additional Quota (AQ) to Scottish landings and reject voluntary measures as ineffective.

Catchers

Quota dependency: Fleet revenue is dominated by mackerel (often over 80% by value). While some vessels can access blue whiting or Atlanto-Scandian herring, these are insufficient to offset cuts.

Operational planning: Many expect fewer trips and shorter seasons; some anticipate moving to a single-season fishery.

Investment exposure: Several vessels have committed to £30–50 million new builds based on expected quota stability. Owners expressed concern about meeting bank repayments under reduced tonnage.

Price and landing choice: Catchers confirmed the end-2025 price surge (up to £3,700/t for mackerel), but warned that higher Scottish landing obligations could widen the price gap with Norway and increase payment risk.

Opposition to intervention: While some support measures to protect Scottish processing, others strongly oppose further tightening of landing requirements, citing fears of market distortion and loss of flexibility.

Views on AQ: Catchers are divided; many reject linking AQ to landings, arguing it would penalise smaller quota holders and distort competition.

Employment: Most vessels aim to retain minimum crews, but stress and uncertainty were noted as major welfare concerns.

Ports

Throughput dependence: Pelagic landings are critical to port viability. At Peterhead, mackerel accounts for ~£3 million of revenue out of £15.6 million total.

Investment risk: Ports have made major commitments based on expected pelagic volumes, including a £30 million quay development (completion 2027) and a new ice plant. These projects are underpinned by bank lending and financial covenants that assume stable throughput.

Impact of cuts: A 60–70% reduction in pelagic landings would remove £1–2 million annually from cash generation, jeopardising future development and service levels.

Policy stance: Ports strongly support measures to maintain tonnage, including higher landing obligations and AQ incentives. They consider voluntary approaches ineffective.

Regional economy: Both ports highlighted knock-on effects for haulage, fuel supply, and engineering services, warning that prolonged reductions would leave ports “a shadow of their current situation.”

Cross-Cutting Themes

Calls for action: Processors and ports are united in urging government intervention to secure landings into Scotland, citing risks to jobs, investment, and food security.

Controversy: Catchers remain divided, with strong opposition from some who fear loss of market flexibility and worsening price differentials.

Price volatility: All sectors flagged the exceptional price surge in late 2025 as a complicating factor for planning and cash flow.

Unprecedented scale: While processors are accustomed to quota fluctuations, they stressed that the 2026 cuts are unprecedented, requiring exceptional measures to safeguard infrastructure and employment.

Public consultation

No open/public consultation has been carried out for the proposed 2026 changes. This reflects the exceptional urgency created by the 2026 quota reductions taking effect from 1 January 2026 and the limited time available to develop and implement any intervention ahead of the start of the quota year.

Instead of a formal public consultation, officials have prioritised targeted engagement with those most directly affected to gather evidence and test options at pace. Engagement to date includes 26 one-to-one sessions with pelagic catching businesses, processors and port authorities, alongside meetings with the Scottish Pelagic Fishermen’s Association (SPFA) and the Scottish Pelagic Processors Association (SPPA), and other roundtable discussions with representative bodies. The options discussed through this engagement covered: maintaining current arrangements (BAU), voluntary measures, and strengthening the economic link licence condition through species-specific landing requirements, as well as consideration of whether changes to Additional Quota (AQ) allocation should be explored for future years.

Other stakeholders

See above.