Russia moves to auction half of crab fishing quotas

Russia moves to auction half of crab fishing quotas
The famous Kamchatka red crab is Russia’s “other caviar” and a high price delicacy
By bne IntelliNews March 12, 2019

Russia intends to auction off 50% of crab fishing quotas instead of assigning the quotas to market players in proportion to the catch as in previous years, Vedomosti daily said on March 11 citing the governmental legislative commission.

The world famous Kamchatka red crab is Russia’s “other caviar” and fetches high prices in export as well as being highly valued by the Russians themselves as a favourite delicacy.

The initiative was first proposed in 2017 and was protested by established market players, that had spend $2bn on quotas in 2001-2017 and argued that withdrawing the roll-over of the quotas would lead to disruption of operations and investment among small regional players.

Russian fishing business has been attracting investors’ attention as fishing is one of the fastest growing Russian agricultural segments and several heavyweight Russian tycoons have been investing into the industry.

Under new rules 50% of all the crab fishing quotas would be pegged to the auction winner for 10 years, with the winners of the auctions having to implement a very loosely defined "investment project".

The head of the commission Konstantin Chuychenko argued to Vedomosti that the new proposal will allow the government to cash in on an extremely high-margin business. Auctioning the quotas would bring RUB82bn ($1.3bn) in revenues. 

In the meantime, previous reports claimed that Russian Industrial Fish Company (RRPK) of Gleb Frank, the son-in-law of stoligarch and Kremlin insider Gennady Timchenko, is behind the initiative.

Reportedly, it was Frank's RRPK which suggested to Vladimir Putin to redistribute crab quotas through auctions in autumn 2017, unnamed market participants told Vedomosti back in 2018. RRPK has entered the market recently and spent a record-high RUB10bn on crab fishing quotas in May 2017.

Russia caught a record 5mn tonnes of fish in 2018 — a post Soviet record, Vasily Sokolov, deputy head of the Russian Fishery Agency, told reporters on November 20. The sturgeon catch in Russia in 2018 reached 675,000 tonnes – an all-time record and the biggest catch in over 100 years. The fishing business is flourishing as bne IntelliNews profiled in a cover story “Russia’s fishy business” in February 2018.