Fishy Business: How Brexit Failed To Help a Dying Industry

Om dit verhaal in het Nederlands te lezen, klik hier.

Brexit promised fishermen to take back control of the waters and get rid of foreign boats in British waters. But since the UK broke up with the European Union, little has changed. British fishing communities continue to struggle, as big companies — many of them international conglomerates — have bought quotas for the country's most valuable species, controlling the price of the fish from sea to plate.

• The British fishing industry has been in decline for decades. For many fishers, Brexit presented an opportunity to change that and regain control of their waters. 
• As the fishing rights have accumulated in a few hands, change has proved difficult.
• A few international conglomerates from the Netherlands and Iceland own most of the English part of the UK fishing industry. 
• Parts of the English industry get less money for their fish, leaving less revenue, profits, and taxes for the country and potentially less pay for their crew than their colleagues in the rest of the United Kingdom. 
• The Icelandic company Samherji, which owns half of one big UK fishing company together with Dutch Parlevliet & Van Der Plas, is the centre of one of the biggest corruption scandals in International fishing 
• With their situation not having improved, British fishermen feel left behind by politicians in London.
• This article was supported by the Pulitzer Center’s Ocean Reporting Network.

HULL, UNITED KINGDOM — Jerry Thompson is proud of his heritage. From a family of English trawlermen, like generations before him, he took to the sea to make a living at a young age. 

Thompson grew up in Hull, a coastal city in the east of the United Kingdom that is home to some 250,000 people. 

When he was just 16 years old, in 1971, he took to the sea. On Christmas Day less than two years later, he was shipwrecked on a trawler off the Norwegian coast. He says he owes his life to the radio operator who died during the rescue. Despite the trauma, he was back at sea within two weeks. 

---

As a nonprofit journalism organization, we depend on your support to fund more than 170 reporting projects every year on critical global and local issues. Donate any amount today to become a Pulitzer Center Champion and receive exclusive benefits!

---

A stone’s throw from the harbour that he used to dock on lies Hessle Road, a nondescript, asphalted road that sees cars speeding past a row of small shops. Little is left of the fishing industry in the street — except for the Hull Fishing Heritage Centre, a small museum the size of a corner shop that displays photos and memorabilia of a once thriving industry. 

Thompson is the chairman of the museum’s board. When Thompson was young, the community’s wealth was entangled with fisheries: When the fishing business was doing well, so were the people living around Hessle Road. 

“It's what made this city what it is today,” he said.

But all that changed in the early days of his career in the 1970s, when trawlers from Hull lost most of their fishing rights in the 1970s: countries around the world set exclusive economic zones at 200 nautical miles from the coast line, prohibiting vessels from other countries to fish there. In Iceland, for example, where the UK fleet had fished freely for centuries, the government began to push the trawlers out of its economic zone. Disillusioned with the prospects of a career on a boat, Thompson stepped on land from his last fishing trip and became a fish salesman of mostly frozen fish in 1980. 

Politicians like Boris Johnson had promised to “take back control over UK waters.” 

Around the same time, the UK joined the European Union, then the European Economic Community. At first, fishermen from all member states could fish in each other's waters. But when fisheries started to be regulated in the early 1980s, British fishermen felt that they didn’t get enough quotas. Making matters worse, the EU’s negotiated quota for fisheries in the North Atlantic’s far north was not high enough to sustain the Hull trawling industry. 

In a couple of decades following the 1970s, the industry that the city had prospered on all but disappeared. 

With the fishing industry in the region dying a slow death, it was nostalgia and hope for a future that made Thompson, like so many other fishermen, vote in favour of Britain leaving the EU. 

Politicians like Boris Johnson had promised to “take back control over UK waters, set our own fishing policies, and support our fishermen.” 

Although vague — like many other promises of the pro-Brexit campaign — fishers imagined that the European industry would leave British waters. They also hoped that reforms of the British fishing industry would improve their livelihoods.   

The issue reached the highest political levels, with negotiations between the United Kingdom and the European Union over how to distribute fishing quotas almost derailing a post-Brexit deal between the two parties. In the end, a late-night agreement was finally struck on Christmas Eve of 2020. 

Fishermen believed that the promised reforms, made possible by leaving what they saw as a restrictive European Union, would revive the national fishing industry, and with it bring back — at least to some extent — the prosperity of the past. 

They turned out to be empty promises. 

No change in sight 

Years after the Brexit divorce deal was struck, nothing has changed for the better, Thompson argues. 

One of the key points with Brexit was taking back control of the sea — but that hasn’t materialised, a Follow the Money investigation shows. 

“We're still not in control of our waters,” Thompson said. 

That’s because on the one hand, the EU fleet still has extensive access to UK waters; on the other, the UK’s rights to fish in British waters and international waters remains concentrated on a few shipowners, with some of them earning huge profits each year on their right to fisheries. 

It pains Thompson that the few trawlers left in Hull aren't British or part of the local traditional fishing community. He doesn’t think they contribute enough to the community. 

One of the biggest trawlers in the UK is the Kirkella, which holds all of the UK’s quotas for fish that live at the bottom of the sea — also called demersals — in the Arctic Ocean’s far north. The Kirkella is one of the most modern trawlers in the world. 

Its owner, UK Fisheries, prides itself on its Britishness. 

The Kirkella's arrival in Hull in 2018 was met with great celebration. 

Spectators were treated to free fish and chips as they watched Anne, Princess Royal — the daughter of late Queen Elizabeth II — christen the ship. “My congratulations to the owners for their investment in the future of fishing,” she said, before naming the trawler Kirkella and blessing the ship and everyone who would sail on it. 

Then she crushed a bottle of champagne against the boat to the cheers of everyone present. 

But company data shows that the boat isn’t as British as it’s made out to be: the Kirkella belongs to a Dutch-Icelandic company. 

UK Fisheries is owned by Dutch conglomerate Parlevliet & Van Der Plas and Icelandic Samherji. Together, they hold all rights for deep sea fisheries in distant waters like Svalbard, an archipelago north of Norway. UK Fisheries lost some quotas after Brexit as the UK hasn’t managed to secure the same deals that the EU had. In an email, the company pointed out that “following a drastic reduction in fishing opportunities in 2020”, they had to sell some of their ships and lay off the majority of their crew members. 

The company also pointed out that a majority of their crew is British and that they pay their taxes in Britain. 

But to Thompson and other members of the old Hull trawling community, the framed Britishness, with branding of the Union Jack and royal christening, is a sham. “We have a lot of ex-trawlermen coming here [at the Hull Fishing Heritage Centre] and they know it's a load of rubbish,” he said. 

The Kirkella is not the only big trawler in Hull whose beneficial owners are Dutch. 

The North Atlantic Fishing Company, which sends ships out from Hull, belongs to Dutch family conglomerate Cornelis Vrolijk BV. The Dutch business with fisheries in several countries around the globe owns the vast majority of all of England's rights to the valuable species of mackerel, herring, and blue whiting in the northeast Atlantic. Among its fleet is the Frank Bonefaas, a 117-metre-long trawler with the most fishing rights of any ship in the whole UK fleet. 

“Some of the Hull men are there [as crewmembers on Frank Bonefaas], but it very rarely comes to England. The same with the Kirkella,” Thompson said, hinting that he doesn’t think they contribute much to the community. 

Who gets the goldfish? 

The UK fishing regulation is based on a licence system developed in the 1990s. That’s when the British UK government divided fish species into quotas to regulate the catch. Depending on how much a company had fished from 1994 to 1996, they would get quotas for those fish species, allowing them to catch a certain amount each year. 

For big fishing companies — like the Dutch and Icelandic conglomerates — this means a lot of money. 

In 2022, UK Fisheries, the firm belonging to the Dutch-Icelandic owners, had quotas and fishing licences that they valued at 73.4 million GBP (around 86 million euros at the time). 

At the same time, North Atlantic Fishing Company, the owner of the Frank Bonefaas and three other trawlers in the UK, had fishing quotas and other “intangible assets” — assets other than concrete values like for example ships — valued at 7.5 million GBP.   

Quotas are extremely valuable, because they are durable and constitute — according to some — private ownership. They secure a share of a certain stock as long as the fish exists. The British government doled out its quotas to fish in Svalbard to UK Fisheries, who owns all the fishing rights there. While the British government — from UK Fisheries’ standpoint — has not managed to negotiate good deals with Norway, Greenland and the Faroe Islands post Brexit, UK Fisheries still owns rights there and would receive a quota the government manages to get in the future. 

Governments negotiate quotas with other countries. This means that when the UK government brokers a deal with, for example Greenland, for rights to more cod in their waters, it is effectively negotiating on behalf of the company that owns those units. 

Jóhannes Stefánsson, the former director of operation for Samherji in Namibia and whistleblower in the Fishrot Scandal, said that quota was the most valuable asset for fishing companies. 

“It’s everything,” he said. “While a ship for example is costly if you don’t use it and decreases in value, the quota doesn’t cost to have and doesn’t lose value,” he said. 

But these assets, according to some, shouldn’t belong to companies at all — and even less so to foreign ones. 

“Ministers have conceded that the right to fish is a national asset owned by the crown on behalf of the people,” said Charles Clover, co-founder of the Blue Marine Foundation. “If it is a national asset, why are you giving it away to foreign companies? Why are you giving it away to the richest people with no benefit back to the treasury?” 

The accumulation of fishing rights in the UK industry in the hands of a few is one reason for why the Blue Marine Foundation, a conservation NGO based in the UK, has taken the British state to court for an alleged lack of transparency when allocating the quotas. 

After Britain officially left the EU, it introduced the Fisheries Act, a set of regulations to govern and regulate the UK fishing industry. The law, for example, states that the quota allocations have to be done with a goal of sustainability and that socio-economic benefits of communities have to be taken into account. 

The central worry of the Blue Marine Foundation is the coastal livelihoods of small scale fishers who stay closer to land than their bigger counterparts. The NGO thinks they have not received enough quotas. 

They also claim that the government is ignoring its own sustainability criteria when allocating quotas and that smaller boats haven’t had their fair share of quotas. 

Part of the issue lies in the system of how quotas are distributed in many countries worldwide, and that they are sellable to others: Instead of making money by fishing, companies make money on the right to fish.

As states regulate fisheries and limit the number of people who can do commercial fishing, the value of the access to fisheries increases. The limited access to the fisheries creates so-called “abnormal profits”, explained Griffin Carpenter, an environmental economist. When the access to a natural resource is limited, the value of the resource also increases, hiking up profits and making it difficult for smaller fishers or newcomers to enter the industry. 

The danger of transfer mispricing or de-evaluation 

International companies in the fishing industry have a special standing: often, they control the whole supply chain of fisheries and not just one aspect of it, as previously reported by FTM: Across the globe, they have processing factories, transportation companies, and companies set up to hire their crews, making it possible to earn money on each separate transaction of the industry. 

That’s in contrast to smaller fishers, who concentrate on fishing their quota and getting the catch to the market. 

And that system of international companies being able to control different aspects of the supply chain also has an impact on how much money can be made — and how much of it stays in the UK. 

The UK's fishing quota system includes four areas: that of Scotland, England, Wales, and Northern Ireland.   

The English industry, where the Dutch and Icelandic conglomerates have their stakes, makes much less money on some fishing than, for example, Scottish companies — at least on paper. 

Two of the four most important pelagic species — herring and mackerel — are sold for a substantially lower price if English ships (most of which are Dutch-owned) fished them compared to ships from anywhere else in the United Kingdom. 

Lower prices result in less revenue, less profit and ultimately lower taxes. 

But for the North Atlantic Fishing Company, it might even be better to sell the fish at a lower price than other fishing companies charge elsewhere in the United Kingdom. 

That’s because the company only has one customer: “A fellow group in the Netherlands,” as their annual report shows. While other fishing companies might be looking to sell their fish at the highest price possible, the North Atlantic Fishing Company is selling the fish to its own company in the Netherlands, where the profit will be bigger if the fish is cheaper. 

In 2022, the North Atlantic Fishing Company had four trawlers in England, with the Frank Bonefaas holding most of the quotas. The annual report of North Atlantic Fishing Company including its subsidiaries made a profit of 1 million euros, a lot less than, for example, its Scottish counterparts: Three companies with similar quota access on the Scottish side made more than 20 million GBP in gross profits each. 

Introduced while the UK was still part of the EU, the UK government in 2022 increased the demands for companies to prove stronger “economic links” to the UK than they did before. This can be done by either making sure 70 per cent of fishers employed have addresses in the UK, by landing 70 per cent of their catch in the UK, by donating to the marine management organisation in the area, or by a combination of all three. 

In an email, a representative of Vrolijk BV, the beneficial owner of North Atlantic Fishing Company, stated that it is bringing more of its catch on its boats Wiron 5 and Wiron 6 on land in the UK at a higher cost than before to meet the economic link requirement. 

Still, Cornelis Vrolijk seems to have paid its subsidiary company in the UK less for the herring and mackerel than the going market price: In 2021 and 2022, the prices of mackerel and herring that were landed in the Netherlands — where practically only the North Atlantic Fishing Company lands its catch for these fish species — were substantially lower than the rest of the UK industry that landed elsewhere. 

This means that the North Atlantic Fishing Company also makes less money than its competitors in other parts of the UK that aren’t foreign owned. 

But there could be darker forces at play than just abiding by new UK laws: When a company in the fishing industry is part of a bigger group in another country, there is always a chance of transfer mispricing — selling a resource for a price below the market value. There can be several reasons for transfer pricing, which in certain instances can be illegal. The most common reasons are to shift profit to countries with lower corporate taxes, but it could also be to lower the wage expenses as part of the crew’s salary are paid as a share of the catch, or simply to ensure a stream of cheap fish to their processing firm. 

Economist Carpenter is careful not to accuse North Atlantic Fishing Company of transfer mispricing. The corporate taxes, he pointed out, are higher in the Netherlands than the UK. But he added that this could still shift tax revenue from the UK to the Netherlands and the value of the public resource being shifted from the UK to the Netherlands. 

A representative from Cornelis Vrolijk denied allegations of possible transfer pricing. 

Former fisherman Thompson is giving up on the fishing industry returning to its former glory. His hopes that Brexit would, at least to some small extent, revitalise it, has been shattered. 

Fishing in Hull will be preserved in culture and museums, but he worries that with time passing, the common memory of the fishing city will disappear. 

“We lost 60 ex-trawlermen last year,” he explained. “So, you know, in five, 10 or 15 years’ time, there isn't going to be a lot of trawlermen left to tell the story.” 

Where previously he had felt anger towards the EU, he’s now frustrated about the politicians in London who only come to Hull for special occasions — like naming the Kirkella — but don’t help the community. 

“They don’t know a haddock from a cod,” he said. 

This article was supported by the Pulitzer Center's Ocean Reporting Network. Helgi Seljan from Heimildin media in Iceland and Dimitri Tokmetzis contributed to this article. 

This article was updated on 28.05.2024 at 19:03 to reflect comments by Cornelis Vrolijk BV.