New players pour $2bn into Russian crab auctions

New players pour $2bn into Russian crab auctions
Russian authorities have held auctions for crab fishing quotas, raising RUB99.5bn ($1.5bn) for the auctions in the North basin and RUB42.8bn for the Far East basin
By bne IntelliNews October 18, 2019

Russia’s crab fishing business has been revitalised by a restructuring of the industry that has opened the business up to competition and investments. But not everyone is happy with the changes, which favour big companies.

 

Russian’s are big fish eaters with smoked salmon (known simply in Russian as “red fish”) a regular on every Russian dinner table. But amongst the most exalted delicacies is Russia’s “other caviar,” the giant Kamchatka crabs.

 

Russian authorities have introduced new auctions for crab fishing quotas and raised RUB99.5bn ($1.5bn) from the auctions in the North basin and RUB42.8bn from the Far East basin, Vedomosti and Kommersant dailies reported on October 17 citing the reports from the auctions.

As reported by bne IntelliNews, earlier this year Russia moved to auction off 50% of crab fishing quotas for a period of 15 years instead of assigning the quotas to market players in proportion to the catch as in previous years. The respective law was signed by the President Vladimir Putin on May 1 2019.

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 market redistribution initiative.

RRPK and its subsidiaries indeed won 10 out 25 quotas in the Far East for a total of RUB38bn, in addition to RUB10bn it spent on fishing quotas previously. Other 15 Far East quotas went to 10 companies.

Some of those include Voshod group affiliated with Nikita Kozhemyako, the son of the governor of the Primorsk region, and Ostrovnoy Crab partially controlled by Sberbank and state technology agency Rostec.

The Antey Group and the Nort-West Fishing Consortiul (SZRK) won most of the quotas in the North basin, for RUB24.6bn and RUB18.2bn, respectively.

Previously the analysts and union representatives believe the prices set for the auctions were too high. "There is an impression that the prices have been ramped up to exclude most of the potential participants, with only a handful of market players able to afford them," the head of the Association of Fishing Businesses of the Primorsk region Georgy Martynov argued to Vedomosti daily in September.

 

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