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

Summary of Feedback from Pelagic Fleet and Representative Organisation

Overview

Interviews with pelagic catching businesses and their representative bodies (Producer Organisations and Quota Management Groups) indicate a sector that is operationally and financially dependent on mackerel, with herring providing a secondary — though operationally connected —revenue stream. Respondents consistently described mackerel as the dominant driver of grossing and margins, often comprising ~60–80% of pelagic value and, in some cases, higher. This composition underpins fleet planning, investment, and exposure to quota fluctuation.

Fleet Structure

Responses in interviews reflected the existence of two broad groupings: (i) vessels associated with processing plants, ranging from vertically integrated companies to those with only limited ownership overlap; and (ii) independent operators, who generally seek to preserve competitive landing options to maintain pricing discipline and mitigate payment-risk exposure, while some maintain long-standing commercial relationships with particular processors despite the absence of formal integration. This differentiation frames reactions to any further adjustments of Scotland’s economic link arrangements and shapes expectations about Additional Quota policy.

Financial Viability

Most vessels reported business models primarily dependent on mackerel and herring. While some participants access blue whiting and, to a lesser extent, Atlanto-Scandian herring (ASH) or sprats, these were characterised as lower-margin or limited-opportunity fisheries relative to mackerel, with gear, crew skills, and routines optimised for the two core pelagic stocks. As such, the ability to pivot to other stocks is limited.

2026 Outlook, Landing Volumes, and Seasonality

Respondents anticipate significantly reduced landing tonnages in 2026 under—some described halving relative to recent seasons—prompting reassessment of trip planning, gear spend, and cash-flow management. Views diverged on seasonality: some intend to retain split seasons (winter and autumn), albeit shorter, while others signalled a potential move to single-season strategies if quotas and prices warrant. Considerations include the fat-content profile of winter fish, downstream plant capacity (including queueing), and signals from buyers on the desirability of January landings. It should be noted that some respondents even with a severe reduction in TAC, some reported that catchers would still remain relatively buoyant given the very high prices recorded for mackerel.

Price Dynamics and Landing Choice

Interviews confirm the sharp rise in mackerel prices during 2025. They also highlight that, for much of the year, Scottish prices were typically £200–£300 per tonne lower than those available elsewhere, although this gap narrowed during the most recent season

For herring, differentials are influenced by roe and compositional change of herring during the season. Respondents noted higher prices outside Scotland, although some described periods when Scottish prices were as competitive as they have been for years. Those not aligned with processing companies respondents stressed that preserving competitive landing options (domestic and external) is crucial to price discipline and timely payment assurance.

Financial Risk, Investment, and Leverage

Financial exposure varies with quota holding and leverage. Operators with recent new-build or major refit commitments (mid~£30m to ~£50m) highlighted vulnerability if quotas trend toward upper cut scenarios, noting bank loans (e.g., semi-annual repayments) and the need to ‘maximise grossing’ to service debt. Others, with lower borrowing, expressed confidence in ‘weathering the storm’ if elevated prices persist, but are nonetheless deferring discretionary spend (gear upgrades, vessel renewal) pending clarity on 2026–2027 quotas and any policy changes. For vessels not associated with processing factories, there was concern about payment risk – particularly as the price of mackerel pushes higher.

Crew, Employment and Skills

Crews typically range between 10–12 per vessel but 16 was cited in one case, often on share-fisher arrangements. Short-term headcount impacts are mixed: many intend to retain minimum crews and replace only retirees; others may consider limited reductions if quotas fall further or if a single-season approach becomes necessary. Engineering capacity was cited as a critical and scarce skill, with concern that sustained, reduced activity, or lower take-home pay, could trigger outflows to other sectors.

Logistics, Capacity, and Regional Factors

Respondents referenced factory capacity constraints, queueing, and port logistics as decision-shaping factors. In relation to foreign ports some highlighted lower operating costs, shore-power availability during discharge, and stronger marketing reach into some Asian markets. Expanded cold-storage capacity in Scotland has supported winter operations, but factory capacity and labour were cited as bottlenecks affecting landing choice, quality management (e.g., roe readiness), and timing.

Views on Potential Mitigation

Views within the pelagic catching sector were not uniform on what action (if any) should be taken for 2026. Responses highlighted a longstanding division between vessel operators that are closely aligned with onshore processing capacity and those operating more independently. Those with closer alignment to processing generally supported stronger intervention for 2026, arguing that exceptional quota reductions require an exceptional response to help protect domestic processing capacity and the wider supply chain (with some calls for 100% landings for mackerel into Scotland). In contrast, independent operators opposed further tightening of landing obligations (with some calling for a lessening or removal of the landings target element), emphasising the importance of retaining commercial choice over where to land, particularly in a year when overall fishing opportunity will be significantly reduced.

Independent operators’ objections were primarily framed around market functioning and risk management. They argued that access to alternative landing destinations is important to maintaining competitive price discipline and highlighted the payment securities available in Norway. Many also expressed concern that the price differential between Scotland and overseas markets has widened since the 2023 economic link changes and contended that any further tightening for 2026 could exacerbate this divergence. This view was frequently linked to concerns about a more “closed” or less competitive domestic market, where bargaining power would shift further toward a small number of buyers, increasing both price risk and perceived payment risk for vessels.

At the same time, the engagement indicated that the catching sector recognises the severity of the 2026 quota constraint and the potential consequences for the onshore sector. Some catcher interests accepted that, without policy change, reduced overall opportunity combined with current landing incentives could lead to a sharp fall in domestic throughput at precisely the point when processors and ports are most exposed. Catchers also stressed that they will themselves be affected by the TAC reductions through lower available tonnage and fewer fishing opportunities, and some argued that any regulatory tightening would compound those pressures. This was particularly emphasised by operators with higher leverage or major recent investment commitments, who described a strong need to maximise grossing opportunities to service debt in a year of reduced quota.

Overall, catcher feedback therefore presents a clear trade‑off for 2026 policy design: measures that increase certainty of domestic landings and protect onshore processing capacity are supported by some, but are strongly contested by others who believe tighter obligations could increase price differentials and reduce the competitive options that they regard as essential to increasing prices. This polarisation shaped views on the appropriate level of intervention for 2026 and underlines the importance of any measure being proportionate, clearly evidenced, and explicitly time‑limited with review arrangements

Concluding Assessment

The catching sector (a modern, highly efficient and highly profitable fleet) evidence portrays a resilient but quota- and price-sensitive fleet, heavily dependent on mackerel and closely attuned to market competition. Longstanding divisions between processing-aligned and independent vessels inform divergent views on further economic link tightening and linking to AQ linking.