Fishing - pelagic quota cuts 2026: business and regulatory impact assessment
Business and regulatory impact assessment (BRIA) for the Scottish Government response to the consultation on pelagic quota cuts 2026.
Section 3: Costs, Impacts and Benefits
In this analysis, Business As Usual (BAU) is the modelled landings estimated to occur in 2026 in the absence of a policy change. It models the continuation of the economic link licence conditions as they currently stand, requiring a total of 55% of all eligible landings (of the eight key stocks, which includes mackerel and herring) to be landed into Scotland. 2025 landing behaviour could not be used because the analysis was started before the year’s fishing activity had concluded. BAU also takes into account the available pelagic fishing opportunities for 2026, which includes a 22.87% reduction in the global North Sea herring total allowable catch (TAC), and a 48% reduction in the global North East Atlantic mackerel TAC, as established through negotiations with the relevant parties in the early weeks of December 2025. The estimated total mackerel and herring tonnages available to the Scottish pelagic fleet in 2026 are 77,676 and 44,537, respectively. These figures are an estimate of the potential tonnages that may be available in 2026 and are not a guarantee of available fishing opportunities. More detail on the methodology used in this analysis is provided in Appendix 1.
Prices received in the 2025 autumn fishery were used as estimated mackerel prices for 2026, with prices in the summer/autumn fishery used as estimated herring prices for 2026. Landed value is displayed in thousands of pounds (£000s) and has been rounded to the nearest £10,000. Where applicable, monetary values from previous years have been adjusted for inflation using the November 2025 Budget GDP deflators[5], and all monetary values are displayed in estimated 2025 prices, unless stated otherwise. Some figures may not sum due to rounding.
Quantified Costs to Businesses
Option 1: Business as Usual (BAU)
BAU is the counterfactual baseline against which the costs of other options are measured. There are therefore no direct costs attributed to BAU as this is our estimate of what would happen in the absence of a policy change, e.g. “do nothing”. Any changes in landed value from previous policy changes are already embedded in the baseline and are not classified as impacts under the current proposal.[6]
The estimated tonnages and value landed under BAU, by species and by landing location, in 2026, are outlined in Table 1 below. These figures have been estimated based on the individual landing behaviour of the 21 Scottish pelagic vessels between 2015 and 2024. More detail on the methodology used is available in Appendix 1.
| BAU | Mackerel - Scotland | Mackerel - Abroad | Herring - Scotland | Herring - Abroad | Combined – Scotland | Combined - Abroad | Total |
|---|---|---|---|---|---|---|---|
| Tonnes | 39,094 | 38,582 | 42,253 | 2,284 | 81,347 | 40,866 | 122,212 |
| Landed Values (£000s) | 135,560 | 142,850 | 28,860 | 1,900 | 164,420 | 144,750 | 309,170 |
The costs of the remaining options, compared to BAU, can be split into the following two categories:
- Price differential between landing in Scotland and abroad: this price differential has existed for some time, including before the economic link licence conditions were changed in 2023. However, the difference has grown in recent years, which represents an increased cost incurred by vessels in the form of the loss of potential revenue they could have made if there were no restrictions on vessel landing behaviour, for example if the amended economic link licence condition (as per the outcome of consultation announced in 2023) had not taken effect. The price differential is the primary monetised cost across Options 2 to 4 and will vary depending on the proportion of landings redirected to Scotland, and the relative difference between Scottish and foreign prices.
- Fuel costs: differences in steaming distance between fishing grounds and landing ports could result in marginal changes in fuel use under Options 2 to 4, compared to BAU. However, given that the total available tonnage and fishing effort are expected to remain consistent across options, these changes are expected to be small and broadly similar to BAU. For this reason, fuel-related costs have not been quantified and are excluded from the monetised cost analysis for all options.
Option 2: Voluntary Measures
Under this option, vessels may choose to land a higher proportion of mackerel and herring into Scotland on a voluntary basis. The cost to vessels would result from the difference in revenues received, relative to BAU, depending on how much each vessel chooses to divert to Scotland.
Landing proportions of individual vessels could range from their estimated landing proportions under BAU (currently at least 55% of their eligible mackerel and herring landings) to 100% of their landings of mackerel and herring. Actual costs would depend on each vessel’s voluntary landing decision, and their historical landing patterns. Due to this uncertainty, monetised costs to businesses for Option 2 have not been estimated.
Option 3: Strengthen Regulatory Requirements Under Economic Link licence Conditions
Option 3 has been split into three scenarios, representing the potential changes to the regulatory requirements under economic link licence conditions that could be introduced in 2026. These are outlined in Table 2 below:
| Scenario | Explanation |
|---|---|
| Scenario 1: 55% Split | 55% of mackerel landings and 55% of herring landings to be landed into Scotland, per vessel |
| Scenario 2: 70% Split | 70% of mackerel landings and 70% of herring landings to be landed into Scotland, per vessel |
| Scenario 3: 100% | 100% of all mackerel and herring landings to be landed into Scotland, per vessel |
The main cost under all scenarios is the loss of potential revenue resulting from the price differential between landing locations in Scotland and abroad.
The estimated landed value, change in landed value, percentage difference and average loss per vessel for each scenario, when compared against BAU, is outlined in Table 3 below. Estimates are rounded to the nearest £10,000.
| Scenario | Total Landed Value (£000s) | Average Landed Value per vessel (£000s) | Total Change in Value (£000s) | % Difference | Average Loss per Vessel (£000s) |
|---|---|---|---|---|---|
| BAU | 309,170 | 14,722 | n/a | n/a | n/a |
| Scenario 1: 55% Split | 308,140 | 14,673 | -1,030 | -0.33% | -49 |
| Scenario 2: 70% Split | 305,750 | 14,560 | -3,420 | -1.11% | -163 |
| Scenario 3: 100% | 299,760 | 14,274 | -9,410 | -3.04% | -448 |
Option 4: Allocate Additional Quota (AQ) on Landings into Scotland
As with Options 2 and 3, the main cost for Option 4 is the loss of potential landed value resulting from the price differential between landing into Scotland and abroad. This would vary by vessel, depending on the proportion of mackerel and herring each vessel decided to land into Scotland.
Option 4 also has the additional potential cost to vessels of impacting their future fishing opportunities, depending on their landing behaviour in 2026. Through allocating additional quota based on the proportion of landings made into Scotland, vessels who do not comply, or comply to a lesser extent than other vessels, may lose access to some, or all, of their additional quota for the following year(s). Given that additional quota represents a significant proportion of a vessels quota share (it is expected to represent roughly 30% of the fleet’s total quota in 2026), this could result in an additional significant financial loss for vessels, on top of the costs associated with the loss of potential landed value.
Benefits to Business
Option 1: Business as Usual
BAU is the counterfactual baseline against which the benefits of other options are measured. There are therefore no direct benefits attributed to BAU as this is our estimate of what would happen in the absence of a policy change, e.g. “do nothing”. For reference, the estimated tonnage and value landed by the Scottish pelagic fleet in 2026 under BAU, by species and landing location, is outlined in Table 1 in Section ‘Quantified Costs to Businesses’ above.
Option 2: Voluntary Measures
The benefits associated with pursuing Option 2: Voluntary measures would be the additional tonnage available to the Scottish onshore pelagic processing sector to process. Any benefit would depend on the proportion of mackerel and herring vessels decided to land into Scotland in 2026, which would likely range from the estimated tonnages received under BAU to 100% of vessel landings of mackerel and herring being made into Scotland, depending on the individual choices made by each vessel. From discussion with catchers and processors, we would not expect cooperation near 100% for voluntary arrangements. Given the uncertainty surrounding modelling vessel behaviour under this option, the associated benefits have not been monetised.
Option 3: Strengthening EL Conditions
The direct benefits associated with pursuing Option 3 result from the additional tonnage that would become available to the onshore pelagic processing sector under the different scenarios of strengthening the economic link licence conditions, and the value they could derive from the processing, sale and export of the additional tonnage received. The estimated additional tonnage of mackerel and herring that could be expected under the three different scenarios of strengthening the EL licence conditions is outlined below in Table 4.
| Scenario | Mackerel into Scotland | Herring into Scotland | Additional Mackerel Tonnage | Additional Herring Tonnage | Additional Net Total Tonnage |
|---|---|---|---|---|---|
| BAU | 39,094 | 42,253 | n/a | n/a | n/a |
| Scenario 1: 55% Split | 51,568 | 29,674 | 12,475 | -12,579 | -104 |
| Scenario 2: 70% Split | 59,324 | 33,423 | 20,230 | -8,829 | 11,401 |
| Scenario 3: 100% | 77,676 | 44,537 | 38,582 | 2,284 | 40,866 |
The additional landed value of these landings into Scotland, when compared to BAU, is outlined below in Table 5. Landed value is an estimate based on the prices achieved for mackerel and herring in their most recent fishery in 2025, and there is therefore uncertainty around whether these prices will persist into 2026. The total extra landed value into Scotland is not treated as the direct benefit because it is a transfer between sectors of the Scottish economy (from vessels to processors), not new value created.
| Scenario | Mackerel Value into Scotland | Herring Value into Scotland | Additional Mackerel Value | Additional Herring Value | Additional Net Total Value |
|---|---|---|---|---|---|
| BAU | 135,560 | 28,860 | n/a | n/a | n/a |
| Scenario 1: 55% Split | 178,820 | 20,270 | 43,260 | -8,590 | 34,670 |
| Scenario 2: 70% Split | 205,710 | 22,830 | 70,150 | -6,030 | 64,120 |
| Scenario 3: 100% | 269,350 | 30,420 | 133,790 | 1,560 | 135,350 |
Table 6 shows the estimated monetised benefits relative to BAU. Figures are presented as the direct GVA generated by the processing sector from higher throughput (i.e. the new value created by processors through the processing, sale, and export of the additional tonnage received under each scenario). The net direct benefit figure per scenario is also shown in Table 6 below. This is defined as the difference between the direct benefits to processors and the direct costs to vessels. From the analysis conducted, all scenarios under Option 3 are estimated to generate a positive net benefit to the Scottish economy in 2026
| Scenario | Direct GVA Effect | Net Direct Benefit |
|---|---|---|
| Scenario 1: 55% Split | 9,350 | 8,320 |
| Scenario 2: 70% Split | 18,450 | 15,030 |
| Scenario 3: 100% | 40,610 | 31,200 |
The monetised benefits shown in Table 6 are estimated using a mixed exogenous/endogenous variable model of the economy based on the Scottish Government Input-Output (I-O) tables[7] for the fish processing industry. This method controls for the upstream effect back to fishers so that the benefits are not double counted (see Appendix 1 – Methodology for more detail).
Estimated wider economic impacts
The same mixed exogenous/endogenous variable model is used to estimate wider indirect and induced effects, summarised in Table 7.
| Scenario | Indirect Effect | Induced Effect |
|---|---|---|
| Scenario 1: 55% Split | -40 | n/a |
| Scenario 2: 70% Split | 4,210 | 2,490 |
| Scenario 3: 100% | 15,080 | 8,940 |
The wider economic impacts are split into the following:
Indirect Effect: the extra GVA generated by the wider supply chain, as processors demand more inputs to process the higher level of output. This is negative for Scenario 1 because under this scenario the estimated total tonnage of fish landed into Scotland falls slightly, due to the fall in tonnage of herring more than offsetting the increase in mackerel.
Induced Effect: as a result of the direct and indirect effects it is assumed the level of household income throughout the economy will increase as a result of increased employment. A proportion of this increased income is expected to be re-spent on final products. To reduce the risk of overestimating expected benefits, induced effects are capped at a proportion of indirect effects, based on Scottish I-O tables. Induced effects under Scenario 1 are not estimated due to the low indirect effects and uncertainty around to what extent the direct GVA of the processing sector alone would drive increased spending throughout the wider economy. The induced effects here are therefore likely to be slightly underestimated.
More detail on the methodology is provided in Appendix 1 – Methodology
Option 4: Allocating AQ from landings into Scotland
The benefits realised through pursuing Option 4 would also be the additional tonnage available to processors to be processed, sold, and exported, in 2026. The amount of additional tonnage made available through pursuing this option is likely to range between the tonnage available under BAU to 100% of the pelagic fleet’s available tonnage, depending on the individual decisions of vessels. Given the uncertainty around modelling the behaviour of individual vessels through this model, the benefits associated with pursuing Option 4 have not been monetised.
Other impacts
Profitability
The costs outlined above are likely to have an impact on the income and profits generated by the Scottish pelagic fleet. Reporting from Seafish suggests that the Scottish pelagic fleet is a highly profitable sector who have seen increasing turnover in recent years as a result of increasing pelagic prices and landings in recent years[8]. Publicly available records from Companies House suggests that these vessels, or the companies operating these vessels, also have sizeable reserves, although they differ across individual vessels and companies.
The average fishing income for the entire Scottish over 24 metre fleet increased by 24% in 2024, on top of an increase of 12% in 2023[9]. The average profits of this fleet increased by 36% in 2024[10]. The primary reasons for these increases were attributed to an increase in landings, as well as an increase in the price of key pelagic species, such as mackerel. The average operating profit of the Scottish over 24 metre fleet was £1.86 million in 2024[11]. Publicly available records on Companies House also suggests that the profitability of pelagic vessels lies in the millions, with most vessels, or companies operating these vessels, carrying forward retained earnings in the tens of millions at the year-end of their most recent financial accounts[12].
The profitability of the pelagic processing sector is more mixed. Publicly available records on Companies House show that three out of the four primary pelagic processors made a profit, with one processor posting a loss, for their respective 2024 year-ends. For the 2023 year-end, two processors posted losses, with the other two processors posting profits. However, all processors did carry forward retained earnings, or profit and loss reserves, in the millions at their respective 2024 and 2023 year-ends.
Competition
Mackerel and herring are global commodities, traded and exported around the world. Increased global demand has been identified as a key driver of the price increase of mackerel experienced in recent years[13]. The ability to land pelagic species into processors out with Scotland (primarily into Scandinavian countries) is often cited by catchers as a key factor in ensuring Scottish processors offer competitive prices. In discussions, some catchers reported that higher mackerel prices are often achieved first when landing abroad (predominantly into Norway), with Scottish prices following suit after knowledge of the prices achieved abroad trickled down into Scottish processors. Additionally, some catchers laid out that, in previous years, they had purposely landed into multiple processors abroad to ensure that there was health competition between factories abroad.
Pursuing options that decrease the fleet’s ability to land abroad and achieve a competitive international price may have a negative impact on the price received by vessels in Scotland. Option 2: Scenario 3 (100%) completely removes the ability of Scottish pelagic vessels to land abroad and guarantees processors all the mackerel and herring tonnage available to the Scottish pelagic fleet. In this scenario, there is no incentive for processors to offer competitive prices, which would likely significantly reduce the landed value achieved by vessels, and significantly increase their costs compared to BAU. Options that retain the ability to land a proportion of landings abroad will ensure that vessel can still receive globally competitive prices, which will help inform prices within Scotland.
Changes to Landing Fees
Through pursuing an option that results in increased landings of mackerel and herring into Scotland, the port authorities and harbours into which these additional landings are made will receive a benefit in the form of increased landing fees from the additional throughput. The ports of Peterhead and Lerwick are expected to receive 99% of these extra fees, based on the previous share of mackerel and herring tonnages landed into Scotland in previous years[14].
However, the increase in landings fees is effectively a direct transfer of money between the port authorities and pelagic vessels, with any additional landing fees generated by the ports being the exact same as the associated increased cost incurred by vessels. As such, the net effect across the economy of these fees is effectively zero, thus they have not been included in either the costs, or benefits, associated with the policy change.
Unintended Consequences
There is the potential for any government intervention to result in unintended consequences. Some catchers and their representatives have expressed concern that that the widening price gap between Scotland and overseas markets is being driven by the amended economic link policy and believe that any intervention in 2026 would exacerbate this divergence.
Using published statistics[15], the real average price difference per tonne between landing into Scotland and abroad, for the 5 years (2018-2022) prior to the 2023 change in economic link licence conditions, was £47 for mackerel, and £63 for herring. Since then, the real price difference has grown, to £116 per tonne in 2023 and to £165 per tonne in 2024, for mackerel. For herring, the real difference per tonne has increased to £76 in 2023, and £132 in 2024.
Provisional figures from the most recent fishing season suggest the price difference per tonne has reached between £200 to £300 for mackerel, coinciding with unprecedented rises in the first sale price of mackerel both in Scotland, and abroad. The price difference for herring has remained roughly the same. It is unclear how much of a direct impact the economic link licence condition changes have had on the price difference, although catchers and their representatives reported that the amended economic link condition had been a key factor in this divergence. There are also other factors at play as mackerel is a globally traded commodity exposed to multiple market factors and dynamics. The announcement of a proposed 70% TAC reduction by ICES at the end of September 2025[16] likely contributed to the drastic rise in price of mackerel, which doubled when compared to the start of 2025. It is currently uncertain whether this is a sustained price rise, or a market spike. The reactions of markets for mackerel, as well as the impact this may have on consumer behaviour, in 2026 cannot be known.
Perceived Unfairness
Catchers stated that they too are going to be heavily impacted (though some stated that the position of catchers was more favourable relative to the processing sector). With the TAC for mackerel reduced by 48% and herring also significantly constrained, these businesses face a sharp fall in available tonnage and earning potential. They argue that additional regulatory intervention will compound these pressures, reducing operational flexibility and competitiveness in global markets.
Sensitivity analysis
As mentioned above, the first sale price for mackerel has increased significantly in 2025, rising from around £1,700 per tonne in January to over £3,400 per tonne in October / November. The analysis within this BRIA uses the latest price estimates to obtain a value estimation at current first sale market prices. However, there is uncertainty over whether these prices are sustainable, and will hold throughout 2026. As such, preliminary sensitivity analysis has been conducted to see the impact if the price level of mackerel and herring were to return to 2024 levels, in 2026. The price per tonne of mackerel and herring for vessels landing into Scotland, and abroad, published in the 2024 Sea Fisheries Statistics, adjusted to 2025 prices using 2025 November Budget deflators, were used as the price points for the following sensitivity analysis.
The estimated cost to the pelagic fleet, in the form of loss in landed value is outlined below in Table 8 and compared to the figures using the 2025 price of mackerel and herring.
| Scenario | Total Landed Value (£000s) 2025 price | Average Landed Value per vessel (£000s) 2025 price | Total Change in Value (£000s) 2025 price | Total Landed Value (£000s) 2024 price | Average Landed Value per vessel (£000s) 2024 price | Total Change in Value (£000s) 2024 price |
|---|---|---|---|---|---|---|
| BAU | 309,170 | 14,722 | n/a | 149,570 | 7,122 | n/a |
| Scenario 1: 55% Split | 308,140 | 14,673 | - 1,030 | 149,180 | 7,104 | - 390 |
| Scenario 2: 70% Split | 305,750 | 14,560 | - 3,420 | 147,410 | 7,020 | - 2,160 |
| Scenario 3: 100% | 299,760 | 14,274 | - 9,410 | 142,910 | 6,805 | - 6,660 |
As a result of a decrease in the price of mackerel and herring, the additional value (i.e. the direct benefits) that processors will be able to generate from the additional product they receive will also decrease. The estimated benefits, in the form of direct GVA effects, are outlined below in Table 9 and compared to the figures using the 2025 price of mackerel and herring.
| Scenario | Direct GVA Effects using 2025 price of mackerel and herring (£000s) | Net Direct Benefit, 2025 price (£000s) | Direct GVA Effects using 2024 price of mackerel and herring (£000s) | Net Direct Benefit, 2024 price (£000s) |
|---|---|---|---|---|
| Scenario 1: 55% Split | 9,350 | 8,320 | 2,710 | 2,320 |
| Scenario 2: 70% Split | 18,450 | 15,030 | 7,590 | 5,430 |
| Scenario 3: 100% | 40,610 | 31,200 | 19,750 | 13,090 |
The lower 2024 prices reduce the estimated total landed value of mackerel and herring under all scenarios. Because the processing GVA effects are driven by the underlying value of the additional landings, these benefits also decrease when the lower prices are applied. However, the direct costs incurred by the vessels (the loss of potential landed value due to the price differential between Scotland and abroad) also decreases, given it is assumed that the price reduction affects all countries, and is not limited to Scotland.
The impact on the net direct benefit (the difference between the direct benefits to processors and the direct costs to vessels) is outlined in Table 9 above. This also decreases when compared to the net direct benefit associated with the 2025 price point of mackerel and herring. However, accounting for the fall in the price of mackerel and herring, all scenarios are still estimated to generate a positive net benefit to the Scottish economy in 2026.
Scottish Firms’ International Competitiveness
Securing increased landings of valuable pelagic species (such as mackerel & herring) will assist Scottish based processors maintain market share, increase competitiveness and attract future investment. Current pelagic export markets are worth around £150 million[17] to Scottish processors, with mackerel being the second highest species exported by the UK by both volume and value. Herring is the third highest species exported by the UK by volume[18].
Increased investment in the sector will assist in rising to the challenges associated with market dynamics and the following factors which are contributing to the increased competitiveness of pelagic fisheries:
Sustainable practices: The demand for sustainable seafood is growing, leading to a shift towards certified products which are recognised and preferred by consumers.
Market expansion: The global market for pelagic fish is expanding, with regions like the Asia Pacific sourcing significantly more product from sustainable sources.
Technological Advancements: The fishing industry is investing in advanced processing solutions to enhance efficiency, which is crucial for maintaining market competitiveness.
Small Business Impacts
For this BRIA, a “small business” is taken to mean an enterprise with fewer than 50 employees.
On that basis, many pelagic vessel-owning businesses are likely to fall within the small business definition, given typical crewing levels per vessel and limited shore-side staffing, although some vessels operate within larger integrated groups.
The economic link requirement applies directly to the pelagic fleet (21 vessels) and therefore the principal direct impacts are on these businesses (rather than only on onshore firms).
Under BAU, analysis estimates 39,094 tonnes of mackerel landed into Scotland and 38,582 tonnes landed abroad (and 42,253 tonnes of herring into Scotland and 2,284 tonnes abroad), implying continued reliance on overseas landings and reduced domestic throughput in 2026.
The BRIA quantifies the direct cost to vessel-owning businesses using fleet-wide and per-vessel metrics (e.g. Scenario 2: total landed value −£3.42m; −1.11% vs BAU; average loss per vessel −£163k).
Engagement indicates some smaller quota holders and/or more highly leveraged operators may be more exposed if prices fall back from recent highs, reinforcing the need for proportionality and review.
Small onshore businesses in the supply chain are also affected indirectly through changes in volumes and frequency of landings.
No new reporting or administrative requirements are introduced for small businesses; compliance monitoring uses existing systems.
Mitigation is primarily through retaining quota gifting as an alternative compliance route, and review/evaluation during 2026 to monitor impacts (and adjust if necessary) and inform 2027 decisions.
Investment
Investment on Port Authorities/Processors and Catching Sector
These amendments are expected to result in an increase in the volume of supply of mackerel and herring throughput and a reduction in supply chain risks for Scottish sea fish processing and handling businesses. it will therefore likely provide potential to attract greater investment and safeguard employment opportunities in Scotland’s fishing industry. In the longer-term it is expected that this policy will contribute to the sustainable growth of the local economies where fishing is an important driver for business activity (i.e. the Northeast of Scotland and Shetland Isles).
A greater and more stable supply chain allows Scottish processors to grow into new markets and expand their presence in traditional ones. In turn, this could lead to increased investment by up and downstream sectors, which could lead to a higher skilled labour force, better quality infrastructure and more efficient process, providing critical mass in attracting global custom and investment.
There may also be costs associated with the up and down stream sectors in scaling up their operations where applicable. This could be substantial if port infrastructure or new processing sites are involved. However, such fixed-cost investments would carry associated benefits, and it would be up to businesses whether to pursue these opportunities.
This policy proposal is anticipated to have a positive impact on ports, market operators and onshore services particularly in Peterhead, and Lerwick where fishing and seafood processing are important industries. For example, ports and harbours need to make regular infrastructure investments as well to maintain facilities so maintained or increased landings resulting from the proposals will help economic stability and confidence.
The policy aligns with the First Ministers s Investor Panel goals and guidance around making Scottish business and communities attractive to global investment and making their businesses more competitive.
Workforce and Fair Work
Increased pelagic landings into Scottish processing business will initially likely have a safeguarding effect on the number of jobs within the sector. However, there is a risk of costs emanating from any labour supply issues. Labour shortages could result in production issues lowering prices or, it could result in vessel owners being unable to sell their stock in a timely manner lowering the quality and value of their catch. It could also have a knock-on effect on other fish processing industries if pelagic processing factories opt to increase their wages. These labour effects have not been monetised due to the uncertainty of the effect, but also those areas in Scotland with fish processing sites often have lower labour force participation or higher levels of unemployment than the national average, suggesting that there is capacity to increase the workforce and therefore any potential costs from labour shortages could be somewhat mitigated or short-term.
The policy options do not directly impact on inclusive recruitment or job satisfaction criteria.
All sectoral employers adhere to national employment laws.
Climate Change/ Circular Economy
The proposed policy options are not expected to have a significant direct impact on businesses’ ability to contribute to climate or circular economy targets. However, there are important indirect considerations:
- Food security benefits: Increased domestic processing strengthens Scotland’s ability to supply pelagic products to local markets, reducing reliance on imports and supporting national food security. This ensures that Scottish consumers and businesses have more stable access to high-quality and highly nutritious seafood, even during periods of global market volatility.
- Impact on resource use and emissions: Increasing landings into Scotland could reduce the need for long-distance transport to overseas ports (e.g., Norway), potentially lowering carbon emissions associated with vessel steaming.
- Contribution to circular economy objectives: Processing pelagic species in Scotland supports local reuse and recycling of by-products (e.g., fishmeal, fish oil), which aligns with circular economy principles. Retaining landings domestically may enhance opportunities for resource recovery.
- Effect on goods and services consumed in Scotland: Greater landings and processing within Scotland could increase the availability of pelagic products for domestic consumption and downstream industries, supporting resilience in the food supply chain.
Overall, while the primary driver of this policy is economic and social resilience, there is scope to design measures that complement climate goals, circular economy principles, and food security priorities.
Competition Assessment
The Proposed Policy Options Have Been Assessed Against the Five Competition and Markets Authority (CMA) Questions:
1. Will the measure directly or indirectly limit the number or range of suppliers?
- The policy is unlikely to reduce the number or range of suppliers in the catching or processing sectors. However, stricter landing requirements could affect operational flexibility for catching businesses, potentially increasing costs for those reliant on overseas ports. This may create competitive pressure within the catching sector, particularly in respect of seasonal fisheries, but does not directly restrict market entry.
2. Will the measure limit the ability of suppliers to compete?
- Catching businesses that currently land abroad for logistical or price reasons may face reduced flexibility, which could affect their ability to compete on cost and efficiency. Conversely, processors in Scotland will benefit from improved supply continuity, strengthening their competitive position internationally.
3. Will the measure limit suppliers’ incentives to compete?
- No significant impact is expected on incentives to compete. Market dynamics, including price volatility for mackerel and herring, will continue to drive competition among processors and exporters.
4. Will the measure affect consumers’ ability to engage with the market and make choices that align with their preferences?
- Minimal impact is anticipated for consumers. Increased landings into Scotland could improve domestic availability and quality of pelagic products, supporting food security and potentially stabilising prices.
5. Will the measure affect suppliers’ ability and/or incentive to introduce new technologies, products or business models?
- The policy is unlikely to restrict innovation. In fact, increased domestic processing may encourage investment in new technology for efficiency and by-product utilisation, supporting circular economy objectives.
Overall Assessment:
While the proposed options may introduce compliance costs for some catching businesses, they do not significantly restrict competition in the market. The measures could strengthen the position of Scottish processors and create opportunities for innovation in processing and resource recovery. Any regulatory intervention will be designed to be proportionate, targeted, and consistent with the Scottish Government’s Better Regulation principles. It should be noted that while minimal impacts are expected, in most cases further policy work will be needed for any new actions. This policy will be kept under review and engagement maintained with pelagic industry sectors.
Consumer Duty
What is the Proposal Trying to Achieve?
The Scottish Government’s amended economic link provisions is helping to deliver greater landings into Scottish ports.
The purpose of the further amendment is to secure supply to Scottish processors in the face of very significant TAC reductions for 2026, including a 48% cut in mackerel and a substantial reduction for herring. Without this intervention, landings into Scotland will fall very significantly, threatening processing capacity, jobs, and investment in coastal communities.
The Scottish pelagic fleet consists of 21 vessels. Prior to the policy change, half of these vessels had landed the majority of their catch abroad (particularly Norway). This was primarily as a result of the higher prices achieved abroad. Opponents to the policy change cited an increased price differential between Scotland and Norway and a lack of processing capacity in Scotland. Scottish processors set out that they cannot currently compete with prices paid by Norwegian processors and similar measures apply in other countries (such as the Faroe Islands) to offer greater supply to domestic processors.
What are the Impacts on Consumers?
Primary and secondary processers will benefit from an increased supply of product allowing production levels to be maintained, and national and international consumers supplied with high quality produce.
Is it Likely that Harm will be Experienced by Consumers as a Result of this Proposal?
Consumers are unlikely to be harmed by changes to the economic link policy.
What Alternative Proposals are there that can Improve Outcomes for Consumers and/or Reduce Harm to Consumers?
Not applicable.
How do These Alternative Proposals Compare to the Original Proposal?
Not applicable.