Russia to auction half of crab fishing quotas

Russia to auction half of crab fishing quotas
Kamchatka red crab, Half Russia's crab fishing quotas are to be auctioned to boost competition
By bne IntelliNews August 27, 2018

Russia will e-auction 50% of the crab fishing quotas for 2018-2019 to create conditions for the entry of new players into the sector, Vedomosti daily said on August 24 citing an official government decree.

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.

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.

Salmon and trout producer Russian Aquaculture is the largest player in the Russian fish business with a 22% market share and is growing fast. The partners of Russian oligarch Roman Abramovich acquired 25% in South Sakhalin fishing company Poronay, while Agama RT bought 49.99% in Russian Cod, controlled by a subsidiary of Russian Industrial Fish Company (RRPK) of Gleb Frank, the son-in-law of stoligarch and Kremlin insider Gennady Timchenko.

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

The government could raise additional RUB80bn-200bn from auctioning the quotas the state fishing agency Rosribolovstvo estimated, according to Tass.

In the meantime old market participants are protesting the decision, arguing that established companies have spend $2bn on quotas in 2001-2017 and withdrawing the quotas would lead to disruption of operations and investment among small regional players.

Reportedly the temporary governor of one the main crab fishing regions Primorsky in July 2018 tried to discourage Putin from auctioning the quotas, warning that the "[fishing] villages don't have the money to go buy [quotas] at the auctions".