A DETERMINATION by Loch Fyne Oysters to use only quality Scottish salmon was one of the main factors which resulted in higher losses last year, the company has said in its annual report this week.
But it insisted it would not change this buying policy. The other factor was labour costs, particularly during peak seasonal periods when higher than planned overtime was needed.
Group results for Loch Fyne, which specialises in farmed oysters, mussels and salmon, show a pre-tax loss of £763,000 for the year ended October 31, 2018, compared to a loss of £528,000 in 2017.
Revenues were up five per cent to £16.42 million (£15.58 million in 2017) thanks to increased export activity driven by its smokery and traded products.
Loch Fyne said in its strategic report that gross margins continue to come under increasing pressure due to (higher) fresh salmon prices and staff costs.
The report added: ‘Our competitors are willing to source salmon from outside Scotland, gaining a cost benefit.
‘Loch Fyne has resisted this and will continue with its policy of sourcing salmon from a single Scottish source, with provenance guaranteed.’
It was also determined to maintain its reputation for quality and integrity, which it believes will bear fruit in the long term.
On labour costs, Loch Fyne said it was also having to compete in a reducing labour pool.
On the up side, the company said it was now selling into the United States for the first time in 15 years and this would be one of two major planks in its growth strategy over the next five years.
And a world first accreditation with the Aquaculture Stewardship Council has enabled it to launch into the UK multiple retail sector and this would also be the focus of its second growth strategy, with smoked salmon playing a big part this year.
Turning to its Morecambe Bay Oysters business, the report concluded: ‘There has been an increasing focus on hatching and growing native oysters to fulfil a growing demand driven by numerous new regeneration, rewilding and environmental/ecological projects.’