Fishing - pelagic quota cuts 2026 - consultation outcome: Scottish Government response

Summary of Feedback from Scottish Pelagic Processors

Overview

Interviews with Scottish pelagic processors (primary and secondary) indicate a sector that is built around mackerel as its primary focus, with herring providing an important but secondary contribution that is operationally linked to the same plants, labour pools and logistics. Respondents consistently described mackerel as the cornerstone of processing activity by both volume and value, noting that without sufficient mackerel supply their business models would not remain viable even if herring volumes were maintained. Staff retention was an issue for two processors in particular, with sustained throughput seen as key to this.

Business Operations and Volume Requirements

Respondents consistently indicated that operational viability depends on securing substantial volumes of pelagic species, with mackerel identified as by far the most critical. Across all interviews, mackerel was described as the cornerstone of processing activity, both in terms of volume and economic value. Several processors stated that without adequate mackerel supply, their business model would not be viable, even if herring volumes were maintained. Optimal throughput for some businesses was cited at approximately 40,000 tonnes across species, with historical figures of 30,000 tonnes for mackerel and 10,000 tonnes for herring. Others reported requirements in the range of 20,000–25,000 tonnes of mackerel and around 10,000 tonnes of herring.

The ability to pivot to alternative species is extremely limited. Facilities are bespoke for pelagic processing, and while blue whiting was mentioned as a potential substitute, margins are low, volumes uncertain and this stock faces a TAC reduction for 2026. For secondary processors, their proximity to the raw material (mackerel) was highlighted as their continued operation in Scotland, though alternative product is available, their location and cost base was seen as making this commercially unviable. This structural dependency underscores the vulnerability of both primary and secondary processors to quota reductions in mackerel and herring.

Financial Viability

Financial pressures are amplified by sharp price volatility. Mackerel prices were reported as having increased substantially during 2025, rising from approximately £1,700 per tonne in January to over £3,400 per tonne in October. This escalation reflects strong demand and limited supply, reinforcing mackerel’s dominant role in revenue generation. Herring prices have remained comparatively stable, averaging £650–£730 per tonne, although roe-related variability persists.

Break-even thresholds were identified at approximately 30,000 tonnes for some businesses and 20,000–25,000 tonnes for others. These figures suggest that even moderate quota reductions will erode profitability. Several respondents have invested heavily in infrastructure — such as freezing systems, palletising equipment, and storage facilities — based on expectations of stable supply. Planned developments, including large-scale freezer storage, are now under review. Contingency planning remains limited, with respondents citing difficulties in identifying alternative revenue streams. Cash flow risks were highlighted, particularly by businesses operating on narrow margins. For secondary processors, the inability to secure raw material from upstream suppliers represents the most significant financial risk, as their business model depends on consistent supply to maintain year-round operations.

Workforce Impacts

Employment structures vary but share common vulnerabilities. Some processors employ between 50 and 70 permanent staff alongside seasonal workers, while others operate with larger teams exceeding 500 full-time employees supplemented by agency staff. Seasonal roles are most exposed, but core skilled positions —including engineering, quality assurance, and supervisory roles — are also at risk. Respondents anticipate significant adjustments to shift patterns, moving from 24-hour operations to single shifts. Reliance on visa and agency workers introduces additional complexity, particularly for businesses in remote regions. Some processors are exploring outsourcing arrangements to retain staff during downturns, but options remain limited.

Market Disruption

Export dependency varies markedly across respondents. Some businesses export over 90% of their output, primarily to Asian and Eastern European markets, while others report export shares of approximately 85%. A few processors maintain a more balanced portfolio, exporting 25–30% to Asia and 15–20% to Europe, with the remainder sold in the UK. One respondent is almost entirely UK-focused, supplying major retailers and supermarkets. Reduced supply threats their ability to meet retailer contracts, which could result in loss of shelf space and long-term reputational damage.

International Context

Structural disadvantages relative to Norwegian processors were a recurring theme. Norwegian facilities benefit from larger volumes of raw product — it was claimed up to 90,000 tonnes — allowing them to absorb overheads early in the season. Government subsidies for labour and energy, combined with lower logistics costs, further enhance their ability to offer higher prices. Respondents stated that Norwegian processors often secure major Asian buyers and exert significant influence over market pricing. Scottish processors anticipate that reduced volumes will create unsustainable price dynamics, while competitor processors maintain resilience through scale and diversified species portfolios. For secondary processors, these dynamics manifest indirectly: as primary processors struggle to compete internationally, downstream businesses face constrained supply and rising costs.

Views on Potential Mitigation

There was a broad consensus on the need for government intervention. Strengthening the economic link licence condition was widely endorsed, with suggestions for species-specific obligations and higher landing percentages during periods of reduced quota. Linking Additional Quota (AQ) to Scottish landings was considered essential, while voluntary measures (essentially catchers agreeing to land into Scottish processors) were generally viewed as ineffective. Respondents proposed emergency measures, such as revising landings targets and using quota allocations to incentivise domestic landings. Some advocated for 100% landing requirements for AQ during periods of severe cuts but also for an intervention of 70-80% if the reduction to mackerel was in the region of 50%.

Other Considerations

Respondents emphasised the broader socio-economic implications of quota reductions; stressing that pelagic processing is closely tied into their coastal communities, and reductions in activity would affect employment, investment confidence, and regional economic stability. Success was defined as maintaining a sustainable relationship between catching and processing sectors, with Scottish vessels landing into Scottish processors at volumes sufficient to support profitability and workforce retention. For secondary processors, success was identified as requiring stability in upstream supply chains, as their business model cannot function independently of primary processors.