Review of the Amended Economic Link License Condition

4. Stakeholder feedback

The economic link requirements announced in September 2022 were, and remain, contentious - strongly supported by some and strongly opposed by others. The changes are particularly controversial amongst a small group in the Scottish pelagic fishing industry who had previously landed the majority of their mackerel and herring abroad. The amendments were unsuccessfully challenged via a judicial review, brought against the Scottish Government by two Scottish fish Producer Organisations (POs)^[18] which represent these vessels.

In summary, the POs which brought the judicial review, and the member vessels they represent, believed that the policy would negatively impact on their businesses, and that Scottish pelagic processors did not have the processing capacity to optimally manage the additional landings into Scotland that the policy sought to attain. They were concerned that Scottish processors may reduce the price paid for produce (because of security of supply) and believed that Scottish processors should be doing more to compete against international competitors (by paying higher prices). They supported the objective of encouraging more landings into Scotland but not the means by which this was done.

Following the outcome of these judicial review proceedings, the two POs have continued to call for the policy to be reconsidered. At the end of 2024, in advance of the landings target requirement for mackerel and herring increasing to 55%, they submitted a report to the Scottish Government setting out the impact on the vessels they represent as a result of the policy decision taken in September 2022 and calling for the move to 55% to be paused.

On the other hand, there are others in the industry who are supportive of the amendments to the economic link policy. Some wish the requirement around landing to be strengthened – so that vessels are obliged to land more into Scotland. They believe that considerable economic opportunity is being lost to Scotland and that provisions should be amended, particularly to encourage greater landings of mackerel into Scotland.

In this section, we explore stakeholder feedback on the amended economic link conditions. Given the policy change has been most consequential for Scotland’s pelagic sector, interviews and questioning focused on the businesses and industry sectors most closely associated with the pelagic sector.

Stakeholder feedback was obtained via 18 semi-structured interviews with a range of individual businesses, pelagic vessels, relevant sectoral groups (recognised POs and Quota Management Groups (QMGs)), relevant port authorities and pelagic processors. These interviews were held from January to May 2025. Interviews held in January and February 2025 focused on pelagic processors, port authorities and Quota Management Groups that had supported the policy change. Those meetings held in April and May 2025 mainly focused on pelagic vessel owners that had opposed the change and the POs of which they are members.

The aim of these interviews was to:

• Establish what the impact of the amended economic link provisions had been on businesses.
• Establish how businesses had adapted their practices since the change.
• Explore the impact on production and supply of mackerel and herring.
• Explore concerns of businesses regarding the policy.
• Determine whether businesses had suffered a loss of revenue since the policy change.
• Explore views on how wider society had been impacted.
• Gather any additional views on the policy.

In the sections below, we set out the key themes raised in these discussions, and highlight some other themes that were also discussed.

To aid in interpretation we have collated feedback into two groupings:

1 – Those who oppose the current economic link licence conditions. Specifically, those pelagic vessel owners that have had to amend their business operations to land more mackerel and herring into Scotland and some sectoral groups.

2 – Those who are supportive or have a more neutral position. This group is made up of pelagic processing facilities, port authorities and some sectoral groups.

1 – Those who oppose the current economic link licence conditions.

We begin by exploring feedback from vessel owners who had previously landed the vast majority of their catch abroad and the sectoral groups that represent them. All of the vessel owners spoken in this group had amended their landings pattern (to land a greater share into Scotland) following the introduction of the amended economic link provision. To note, that given the primary foreign market for Scottish mackerel is Norway, in discussions stakeholders focused on landings into Norway (as opposed to other countries).

Theme 1 - Impact on price received

A recurrent theme in discussions was the difference in price per tonne received for mackerel and herring in Scotland and Norway. It was reported that there had always existed a slight gap between Scottish and Norwegian prices, with Norwegian prices historically slightly higher. However, interviewees set out that the gap had widened and was reported to be at its greatest in the early 2025 mackerel fishery (January/February) (historic price trends are borne out as per Graphs 7 and 8 above).

It was reported that, for 2025, that the price difference for mackerel was as much as £200 and £300 per tonne higher in Norway, whilst the price difference for herring was said to be between £100 and £200 per tonne higher. There was frustration at price difference between the two countries, and a belief that Scottish processors should be in a position to pay more. Many interviewees elaborated on the impact this was having on their revenue (discussed in Theme 2 below).

In discussions with sectoral group representatives, they set out that the differential price received between Scotland and Norway had been a key concern throughout the policy development.

Theme 2 – Change in business revenue

When questioned on how business revenue had been impacted as a result of changes to economic link since 1 January 2023, all interviewees in this grouping said that their potential revenue could have been higher had the amended economic link licence condition not been introduced (as a result of the price difference explored above).

Some vessel owners set out that, despite losing out on potential revenue, their actual revenue or profits had increased slightly, remained consistent, or had not declined. Common explanations for this frequently mentioned the additional mackerel and herring quota available to pelagic vessels as a result of the UK becoming an independent coastal state. Pelagic vessels are regarded as being key beneficiaries following the UK leaving the European Unition. For mackerel in particular, the UK’s relative share of quota received increased significantly from 2021. As a result, the quota received by Scotland’s 21 pelagic vessels has increased by tens of thousands of tonnes a year since EU exit. Others mentioned that the slight decreases in total allowable catch (TAC)for 2025, had caused prices to increase as supply decreased.

However, whether overall revenue was viewed as having improved, stayed consistent with previous years or having declined, there was a consistent view that the business costs of these vessels had increased as a result of the policy change (see Theme 3 below). The cause of many of these increased costs was attributed to the policy change. It is important to state that at no point was the viability of businesses said to be in doubt.

In discussions with sectoral groups opposed to the policy change, it was set out that the potential revenue for POs could have been higher had vessels landed an increased portion of their catch abroad. Although all POs involved in stakeholder interviews set out that their main concern was the impact on their member vessels, it was set out that a reduction in potential PO revenue, as a result of decreased levies, meant fewer funds for future investment.

Theme 3 - Increased business costs

All vessel owners said that their business costs had increased since 1 January 2023. They reported that this was because of having to make more voyages, and spend more time at sea, as a result of the policy change.

Vessels were said to be having to make more voyages because they were being asked to limit the quantity of fish they landed per trip to stagger supply to Scottish processors. Therefore, vessels were required to make more trips than would otherwise have been the case.

The increase in fishing voyages was reported to have the following consequences:

• An increase in wear and tear on vessels and equipment. Additional voyages meant that vessels and fishing gear were in use to a greater extent than in previous years, which resulted in increased maintenance and upkeep costs.
• An increase in fuel/energy costs – some set out that they were spending considerably more on fuel as a result of the policy change. This was either as a result of having to make more voyages or keeping fish refrigerated while waiting to unload catch (see Theme 4 (below)). It was elsewhere reported that fuel costs were a minimal proportion of overall costs.
• Increased staff costs associated with having to spend more time at sea. This included the salaries of the staff themselves, as well as other related overhead costs such as food provisions.

Theme 4 - Increase in time to unload catch/Issues with processing capacity

Both vessels and the POs that represent them stated concern at an increase in occurrences where vessels were required to wait to unload catch. It was reported that, given the seasonal nature of the herring and mackerel fisheries, vessels often conduct fishing operations and seek to return to port to unload their catch at the same, or similar, time.

Though the number of vessels involved is relatively small, the large tonnage of fish each vessel catches can take many hours to unload, from vessel to factory. More than one vessel returning to port to unload at the same time can result in vessels having to remain in port waiting to start the process of unloading their catch (some interviewees reported occasions where vessels were required to wait for numerous days to unload catch).

Vessel owners set out that they had experienced waiting to unload their catch, or were aware of other vessels having to do so. It was felt that the change in landing requirement had increased the length of delay as many reported that the Scottish factories didn’t have sufficient capacity to process the volume being landed into Scotland. There were reports of some vessels landing in excess of what had been agreed with processing factories, thereby further delaying the unloading of vessels due to land subsequently. It was also questioned whether there really were four pelagic processors that vessels could land into. In some discussions it was stated that, for some factories, the priority is vessels associated with the factory.

The key concerns surrounding delays in unloading catch were the potential impact this would have on the product (i.e., a deterioration in the quality of fish caught) and also an increase in operating costs, particularly crewing costs and costs of keeping the catch refrigerated, incurred as a result of waiting longer.

In these interviews the situation was often contrasted with landing into Norway, where it is reported there are a greater number of processing factories, equipped with better facilities. Interviewees reported that there were fewer delays when landing into Norway. Some expressed the view that the processing capacity of Scottish processors was lower than stated. Some set out that unloading times (the time taken to pump fish from the vessels) into Norwegian processing facilities were significantly faster, whilst others did not notice a difference in the speed of unloading.

This situation (delays in relation to the unloading of catch) appears to be most acute in relation to the herring fishery, where it was reported that a significant portion of vessels are seeking to land as much of this species as possible in order to increase the portion of mackerel (a higher value species) landed into Norway. It was felt that, given the herring fishery takes place in the summer, the potential for deterioration of the catch is greater.

Theme 5 - Changes in fishing operations

In these discussions, some vessel owners set out that they have been required to change their fishing operations as a result of the policy change (over and above landing into Scotland). As noted above, it was stated that there had been an increase in the number of trips vessels have been required to make (as Scottish factories were limited in what they could process), which has had consequential impacts on operating costs.

There was a clear view that greater planning is now required in terms of organising fishing activity. It was reported that, historically, vessels would go to grounds when they perceived the catching conditions to be optimal. This was contrasted against the reported current situation, where vessels are fishing to fit into landing slots set out by processors. It was reported that this was having a particular impact on the herring seasonal fishery, as vessel owners sought to maximise landings of the species into Scotland in order to land as much mackerel (a higher value species) in Norway. It was laid out that this often resulted in multiple vessels coming in to land at the same, or similar times, requiring some vessels to wait to unload their catch. Some vessels reported that they were looking to change the time they went to fish at grounds, starting earlier in the herring season (June / July) to avoid the more congested fishing periods (August) and potentially reduce wait times when unloading. However, it was noted that this would mean forgoing fishing when the herring is typically at its highest quality.

Some also cited greater ‘bycatch’ of mackerel or herring (when the other fish was the target species) because of elongated seasonal fisheries. It was reported that this has knock on implications when processing catches.

A minority of vessels in this grouping expressed concern in relation to health and safety and potentially having to fish in unfavourable conditions. Others, however, expressed no concerns in relation to health and safety setting out the characteristics of these vessels (relative to other fishing vessels they are significantly larger and more modern) made the weather less impactful on them.

Theme 6 - Communication on the landing of catches

In interviews, officials sought to get an understanding of how the organisation of landings had changed as a result of the amended policy. Changes in communication between the different sectors of the pelagic sector since 1 January 2023 were consistently mentioned.

It was set out that landings were organised through direct contact between skippers / vessel owners and processing facilities; or via vessels’ agents who made arrangements for vessels on behalf of vessel owners. It was clear that POs (which have powers to organise the production of members) do not have a significant role in organising the landing of catches for the pelagic fleet.

In general, it was felt that there was more direct engagement between vessels with processing facilities to organise landings. There was a view that Scottish pelagic processors had greater control of fisheries operations as a result of anticipating greater supply as a result of the policy change.

Theme 7 – Changed activity of vessels associated with processing factories

For three of the Scottish pelagic processing factories there is a degree of association (such as some degree of shared ownership) with some of the pelagic fishing fleet. It was alleged that these vessels (which have a long record of landing most, if not all, of their catch into Scotland and in particular the processing factories with which they are associated) have opportunistically sought to increase landings abroad in anticipation of increased landings from other pelagic vessels into Scottish pelagic processing factories. It was also claimed that processing factories were prioritising the landings of those vessels with which they are associated.

Theme 8 – Changes to economic and social benefits

During interviews, the economic and social importance of the pelagic catching sector was made clear. Particular emphasis was put on the sector’s importance to remote coastal communities, where it provides significant economic opportunities and supports livelihoods. This importance was commonly highlighted in discussions with representatives based in Shetland, where the industry is viewed as essential to the local economy and the fabric of the community. Some vessels, and vessel owners, felt these benefits were threatened by the policy change.

Theme 9 – Costs/Benefits to other sectors

We sought views from interviewees as to the costs and benefits to other sectors as a result of the policy change. This group of respondents were very clear that there had been costs to individual vessel owners (such as themselves) as a result of the policy change.

Some felt that Producer Organisations had likewise been negatively impacted. Those that were felt to have benefited from the policy change were: processors, port authorities, fuel suppliers and other auxiliary service providers had benefited.

Other Issues expressed

Other themes explored in discussions with this group and which warrant highlighting include:

A view that processing facilities bring limited economic benefit to their communities or that there had been limited additional economic social benefit from additional throughput at processing facilities. It was felt that increased mechanisation /automisation had reduced the number of individuals employed in such facilities. In a similar way, some stated that those employed in such facilities were often seasonal workers and economic benefit would therefore leave fishing communities. Processors reported that interaction with vessel owners/representatives to facilitate the processing of catch varied significantly and delays experienced by vessels waiting to unload their catch could be reduced through improved planning and communication

Alternative mechanisms for promoting landings into Scotland were suggested. One suggestion proposed was to use access to Additional Quota as a way of promoting landings, whereby the allocation of Additional Quota was associated to meeting the requirements for landing into Scotland. Another suggestion was that the 55% requirement for landings was imposed at a Producer Organisation level, whereby POs would be required to structure landings of member vessels to meet requirements. It was felt that this methodology would be fairer on smaller vessels.

The impact that the change had on the fleet’s carbon footprint. It was expressed that the amended economic link provisions had resulted in an increased carbon footprint of some vessels, primarily as a result of having to make a greater number of trips.

2 - Fish processors, port authorities and other supportive sectoral groups

Analysis of the feedback provided by Pelagic Fish Processors, Port Authorities and those sectoral groups supportive of the change is outlined below. These sectors are categorised together on account of the similarity of their responses and general support or neutrality for the policy change.

Theme 1 – Economic and social benefits

Amongst this grouping there was a strong view that the policy change had brought significant social and economic benefits, this was at an individual company level and to wider communities.

A clear benefit to the processors was the additional throughput of produce that the policy had brought with it. This allowed for immediate benefit for these individual businesses in terms of additional revenue and greater employment for their staff. It was set out that the change had allowed for processors to reach the threshold for financial viability and provided greater security of employment in an area which had seen changing ownership, or restructuring, arising from volatile markets in recent years.

Port authorities likewise spoke of the immediate benefit in terms of greater landing dues from vessels unloading at Scottish ports (as fishing vessels unloading their catch at Scottish ports are required to pay a levy to port authorities)^[19].

Both processors and port authorities reported that there was significant ongoing, or future, investment in their respective operations, which included investment in facilities and the lengthening of operating hours and manpower.

Both groups mentioned that the policy change provided a more secure platform for business planning and facilitated greater confidence in their ability to financially commit to the large capital spending required to improve, or expand, facilities, as there was greater security in their ability to have a consistent supply of produce in the coming years. Processing facilities reported their intentions to improve and expand processing capacity, whilst port authorities explained that, as Trust Ports, they looked to reinvest profits into port-side and harbour facilities. Regarding employment, no processing factories reported that they had seen a decrease in staff numbers. It was often reported that numbers had increased and that the number of full-time employees (as opposed to agency staff) had increased or that the nature of jobs had changed as a result of modernisation. Factories also laid out they had been able to extend the duration of employment as a result of increased revenue from increased fish landings.

It was very strongly set out that beyond processors and port authorities, benefits had spread throughout the wider community. Examples given included an increase in fuel and provisions/chandlery being bought in local ports and increased transport/haulage.

Theme 2 – Exploring key concerns of vessels that had changed landings pattern

Marine Directorate officials explored concerns that had been raised by those vessels that had required to change their landings pattern as a result of the policy change. Particularly in relation to:

• Reasoning for the price difference between Scotland/Norway
• Delays in the unloading of catch
• Decrease in revenue for vessels
• Changed activity of vessels associated with processing factories

Reasoning for price difference between Scotland and Norway

A key concern for those vessels who had switched their landings to Scottish ports as a result of the policy is the difference in price received between Scottish and Norwegian processors. The difference was noted as being particularly high in January 2025 for mackerel.

Scottish processors set out that they were paying record high prices for mackerel, competing for supply and that prices had been increasing year on year. They acknowledged that they were not able to offer the equivalent prices offered by Norwegian processors, citing a number of reasons why.

One such factor was the general reduction in the supply available to Norwegian factories. For 2025 in particular, the introduction of the 55% requirement for Scottish vessels (a key supplier for Norwegian processors) and a reduction in the Total Allowable Catch (TAC) for mackerel, alongside, had resulted in a reduction in supply, subsequently increasing prices.

Another factor cited was the comparative size and structure of Norwegian factories. It was reported that Norwegian factories benefit from receiving the overwhelming majority of landings by Norwegian vessels which allows them to cover basic costs with landings by Scottish vessels seen as an additional benefit. Norwegian processors were reported to often have different business structures with greater vertical integration along the supply chain. This allows factories to benefit from economies of scale, enabling them to process and transport fish at a lower cost, thus enabling them to offer a higher price.

It was reported that employment subsidies were available to Norwegian processors unavailable to Scottish processors. There was also a substantial difference in energy costs, with Scottish processors paying considerably more for electricity – reported to be a substantial cost. The longer-term impact of Brexit was also highlighted.

Unloading of Catches/Processing Capacity

In discussions with those opposed to the policy change, it was set out that there had been instances of some vessels having to wait in port to unload their catch.

In discussions with processing factories and port authorities it was set out that the wait durations had been in line with previous years, although it was reported that there had been an increase in the number of occurrences of vessels waiting to unload their catch. In particular, the number of vessels seeking to land herring during the 2024 season had resulted in delays in unloading, compounded by one factory experiencing technical issues during the same period. Processing factories set out that any delay in unloading catch had not resulted in the decline in quality of the product, nor had it impacted on the price received. The facilities onboard vessels to keep catch refrigerated were cited as a reason why quality could be retained. In some discussions, it was noted that the length of steaming (voyage) time to Norwegian facilities would likewise be expected to result in a degradation of catch.

It was reported that, where vessels were having to wait to unload their catch, other factors were often involved, such as weather incidents (vessels returning to port due to weather conditions) or technical issues unloading catch, but not processing capacity. The view was also expressed that opponents of the policy change could be working to engineer a situation where vessels are required to wait in port to unload.

It was stated that because the overall TAC for mackerel and herring had reduced for 2025, it was not anticipated that the overall tonnage of the species landed into Scotland would increase significantly for 2025.

In relation to vessels being required to land to an assigned ‘slot’, it was stated that this was usual practice and was also a feature of landing abroad.

It was set out that processors had worked hard to improve engagement across the fleet and worked to make landings as smooth as possible. They reiterated calls for greater engagement/communication.

Decrease in potential revenue

As seen in the section above, many vessel owners who had changed their landings pattern to comply with the landings target element of Scottish economic link licence conditions reported that the amended economic link policy had resulted in increased costs for their businesses and, or, that revenue had been impacted. The increased costs arose from having to change business operations and the reduced revenue as a result of receiving lower prices in Scotland compared to Norway.

In some discussions it was set out that current circumstances were very favourable- for pelagic vessel operators. Following the UK leaving the European Union, these vessels had experienced a considerable growth in their quota share and prevailing market conditions for mackerel and herring were good. Generally, this meant that all vessels were receiving more quota, and achieving higher prices per tonne, than before It was set out that vessels were receiving ‘record’ revenue and that this had resulted in accompanying increases in crew wages (in contrast to the view expressed that crew wages had decreased (see above)).

Changed activity of vessels associated with processing factories

As set out above, it was alleged by those opposed to the change that vessels associated with Scottish processors had changed their landing pattern to increase landings abroad. This was strongly refuted in discussions with the sectoral groups associated with these vessels.

In one discussion it was stated that for their business it would have been better if the amended economic link provisions had not been introduced and they had switched their operating model to landing all catch abroad. However, they had not done so and had supported the economic link change because of the social-economic benefit it brought to their area.

Theme 3 – Desire for greater landing of mackerel

In some discussions there was a clear and strong view that the potential benefit arising from the policy change was smaller than it otherwise could be as some vessels were acting to land as little mackerel as possible into Scotland.

Since their introduction in 1999, the economic link licence conditions have always applied to the total landings of all species covered. For Scotland, following the phasing-in period, vessels are required to land 55% of the total landings for the species covered into Scotland. So, 55% of the total weight of the 8 species covered is required to be landed into Scotland or else quota gifts must be provided.

In discussions it was reported that some pelagic vessels are looking to land as much herring as possible into Scotland in order to maximise the quantity of mackerel (a higher value species) that is landed abroad. Though herring is of key importance to Scotland, its price per tonne value is significantly less than mackerel.

There was a clear view that the Scottish Government should intervene to increase the proportion of mackerel being landed into Scottish ports. Some interviewees suggested that the 55% requirement should apply on an individual species basis, or that the required percentage for the different species to be landed into Scotland should fluctuate with changes in the species-specific TAC.

Theme 4 – Improved market access

Processors highlighted the significant growth in exports to high-value markets over the past several years. They also reported greater engagement with ‘buyers’ from the far east who are reportedly present in their facilities to a greater extent than in previous years. Processors reported that the amendments to economic link conditions had significantly helped increase the visibility and profile of Scottish fish (mackerel in particular) in these markets.

Theme 5 – Benefit of lengthening fishing season

As with previous discussions with processors, there were calls from the processing sector for pelagic vessels to extend the duration for which they target mackerel and herring. It was explained that this would help spread out the landing of vessels into factories, alleviating any delays caused as a result of multiple vessels attempting to land at the same, or similar times. Furthermore, it was explained that this would allow factories to run for longer, making use of underutilised capacity at the end of the mackerel season (February) or at either end of the herring season. Although there were reports that some vessels delaying going to sea until later in the early mackerel season, in 2025 it was reported that the majority of vessels continue to focus activity at the start of January season. Some vessels also reported potentially planning to go to sea earlier in the herring season (June/July).

Theme 6 - Communication on the landing of catches

A clear desire from processors in particular was improved communication and co-ordination regarding the landing of catches. It was stated that engagement between processors and vessels, or agents acting on vessel’s behalf, had improved as a result of the policy, although, in general, it was felt that this could still be improved considerably. The role of POs was highlighted (as it had been during the consultation process) in these discussions, and it was felt by some that they should be much more proactive in organising the landings of their pelagic member vessels.