Not to fat: Frank and Orlov “added” Head of the Federal Agency for Fishery Ilya Shestakov “little red”

The closure of the export of red fish may lead not to lower prices, but to the monopolization of the market in the hands of Gleb Frank and Vitaly Orlov and the ruin of small producers.

Not up to fat: Frank and Orlov "added" Head of the Federal Agency for Fishery Ilya Shestakov "little red"

The statement of the head of the Federal Agency for Fishery, Ilya Shestakov, about the intention to limit the export of red fish, allegedly to stabilize prices within the country, caused the opposite effect: prices for salmon jumped by 22-28%. This happened because the fish market players, fearing that export channels would be blocked, are trying to sell products now at the maximum price. But there is every reason to believe that prices after this jump and the stabilization of the situation on the market will no longer fall, but will continue to creep up.

The idea to limit exports, however, is not new: in the summer, Valentina Matviyenko, speaker of the Federation Council, spoke about the intention to introduce strict quotas on the volume of fish and seafood for export.

The essence of the idea is simple: to saturate the domestic market with red fish so that the cost of production falls due to the increase in supply. But, in fact, the mere intention to reduce exports can lead to the ruin of small fishing enterprises.

But large fishing holdings like “norebo” Vitaly Orlov and “Russian fishing company” (RRPK) Gleb Frank. The correspondent of The Moscow Post in the Murmansk region understood the situation.

big fish

In the case of the fishing industry, the same principle applies as in any other – while the fat one dries, the small one dies. And then the shrunken fat man will take his market share. “norebo” Vitaly Orlov is the largest fish holding in Russia. It includes 16 fishing companies, the holding owns a fleet of more than 40 trawl and longline fishing vessels.

RRPK Gleb Frank is also a major player, one of the largest pollock miners with an impressive fleet. In the spring, Frank sold controlling shares in the group of companies “Russian crab” (70.1%) and “Russian fishing company” (RRPK, 70.09%), as well as in “Rockwell Capital”.

His shares were bought out by his own top managers, but the reason is clear – the boss fell under Western sanctions, and the assets need a little “hold back”. Few doubt that Gleb Frank, the son of the former Minister of Transport Sergei Frank, remains the beneficiary of the business and continues to manage it himself.

Experts suggest that the very initiative to restrict exports could come from these two largest players in the Russian fishing market.

The first to sound the alarm was the All-Russian Association of Fisheries (VARPE), which unites mainly small and medium-sized enterprises. According to them, exports account for no more than 10% of the produced volume, so restrictions could lead to the fact that players will simply hold back production in anticipation of peak demand.

In fact, VARPE will simply not be able to sell falling volumes, and will be forced to raise prices or leave the market. But “norebo” and RRPK will only be delighted with this.

“Crush coastal fisheries”

Previously “norebo” was part of the WARPE, but Orlov was clearly too large a fish in this structure – it was a bit cramped in shallow water. After all, I had to measure my appetite with small fish.

Therefore, at the end of 2021, he left VARPE, and almost immediately, already on January 1, 2022, he joined a new industry education – “Associations of Shipowners of the Fishing Fleet” (AAASRF). It accounts for more than 22% of the total national catch in the sea, and Gleb Frank became the ideologist and founder of the structure.

At the same time, while still in the VARPE, Orlov tried to push through initiatives that were beneficial to him personally. The leadership of the association explained the exit of Vitaly Orlov’s holding by the vote held on the eve of the Association Council, which gave a negative assessment to the proposals “norebo” regulation of the fishing industry.

They considered that the proposals were aimed at creating competitive advantages for a limited number of large fishing enterprises. Emphasized that they can cause damage to other members.

What exactly are we talking about? “norebo” took the initiative to limit the life of fishing vessels from 2022 to no more than 15–35 years, to increase the fee for the use of aquatic biological resources in the production of products with a low degree of processing from 2033, etc. A corresponding letter was sent to Deputy Prime Minister Victoria Abramchenko.

As a result, WARPE President German Zverev directly accused Norebo of wanting “crush” coastal fishing. His words are quoted “SeverPost.ru”.

But Gleb Frank was not against such an approach. Thus, both major fishermen “ripened” at the beginning of 2022, and, it seems, they began to lobby their interests at the highest level: they could even reach Valentina Matvienko.

The ill-wishers even tried to present the head of the Federal Agency for Fishery, Ilya Shestakov, as almost an assistant to Frank and Orlov: the regulator introduced such quota rules for catching fish and crab that for some reason it was the Oryol and Frank companies that turned out to be in the black.

Fishing quotas in Russia were distributed according to the historical principle – among existing companies, depending on the volume of fish they caught in the previous period. But in 2018, already under Shestakov, 20% of all fish quotas began to be sent through auctions. In 2019, 50% of crab quotas were added to them. And the winner of the auction assumed obligations to upgrade the fleet and refining capacities.

Not to fat: Frank and Orlov

It seems that Gleb Frank quickly realized that it is much easier to monopolize the market with another major player – and even with the assistance of such influential relatives. A photo: “businessman”

“NEWS” Kamchatka writes exactly what “gold” Moscow boy Frank and “gold” St. Petersburg boy Shestakov pushed through the decision, according to which the historical principle of quota distribution was divided into an auction one. Actually, even then the foundations were laid for occupying a dominant position in the fish market by these major players.

Fish together, money apart

Needless to say, this is extremely beneficial for large fishery owners with the resources to upgrade the fleet? And please: in the summer of 2021, Vitaly Orlov announced plans to build four new longliners for cod fishing quotas. Besides, in “norebo” announced plans to acquire (in fact, “absorb”) fishing group “Saami” from Murmansk. Market expansion continues.

At the same time, how both industrialists amassed their fishing empires is also a separate story with a bunch of scandals and omissions. Many still believe that Vitaly Orlov could have rudely seized the shares of his former partners in “norebo” – Swede Magnus Roth and Russian Alexander Tugushev.

Orlov had to deal with them in the High Court of London. Tugushev claimed that once in “norebo” he owned 34%, while Magnus Roth and Vitaly Orlov owned 33% each. However, allegedly Orlov greatly underpaid Tugushev for his share, as a result of which he lost his business, in fact, for a penny.

Among the scandals with the owner “norebo” there were also international ones: someone even believed that the rapprochement with Frank was precisely because the latter could help whitewash the reputation of the fisherman in front of Western buyers of his products.

In 2019, the well-known WikiLeaks resource devoted an investigation to Samherji, the largest Icelandic fishing company. According to the authors, Icelandic fishermen have for years bribed the Namibian authorities to obtain fishing quotas and laundered the proceeds through the Norwegian state bank DNB NOR.

Not to fat: Frank and Orlov

Vitaly Orlov does not hobnob with fish in shallow water and wants to monopolize the market? Photo: RBC

It follows from the published documents that “norebo” Orlova allegedly bought one of the “laundries” for laundering illegal proceeds – the company Katla Seafood Canarias SLU, registered in the Canary Islands. And also later she could conduct joint activities with Samherji in catching fish and the same money laundering through the Norwegian bank DNB NOR. Wrote about the scandal “SeverPost.ru”.

As for Gleb Frank, he also does not get out of scandals. Son of a former director “Sovkomfolot” and then Minister of Transport Sergei Frank, not only from childhood was surrounded by influential people – he also married the daughter of the co-owner of the group “Gunvor” Gennady Timchenko. It is clear that such a need is either all or nothing.

Using his connections and insight, he turned into a real crab king of the Russian Federation, using the same principle of auction distribution of quotas. But if earlier market experts assumed that sooner or later he would meet in a confrontation with Orlov, now it is clear that the parties decided to act together – and they can simply cut the country’s fish market into two.

Persons:
Vitaly Orlov
Ilya Shestakov
Gleb Frank
Sergei Frank
Tags:
norebo
Rosrybolovstvo
Russian fishing company
Regions:
Murmansk region
Andrew Fink

Andrew Fink

Andrew Fink was born in 1977 in Bellows Falls, Vermont. His career as a journalist began with the regional publication Bellows Falls Times. political commentator, one of the founders of the project "Russian crimes".

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