Revised MSC royalty fee structure to reduce supply chain costs and promote use of ecolabel
Feb 06, 2013
The Marine Stewardship Council (MSC) is introducing a revised charging structure for ecolabel licence holders from 1 April 2013. The revised pricing model incorporates a tiered volume royalty rather than the current single fixed percentage rate and will reduce the effective logo fee charged on the sales for the largest MSC’s existing logo licencees. Smaller businesses will also see benefits with a single fixed fee and the elimination of all logo fees that would have been due on sales of certified and labelled seafood.
The different strands within the revised pricing model are designed to meet the needs of both large and small companies and to promote and incentivise the use of MSC’s consumer-facing ecolabel. Companies generating over 75 per cent of total royalty income will benefit from this new charging regime.
‘The MSC has been listening to its stakeholders. We are introducing this revised charging structure after extensive consultation with our partners and supporters. The new structure will reduce the overall costs of participation in the MSC program and add value to those companies who share our vision of healthy and productive oceans. We also hope it will encourage greater use of the ecolabel in the global marketplace that is increasingly demanding credible, third-party and fully traceable assurance of the sustainability of its seafood choices.’ said Rupert Howes, Chief Executive Officer, MSC.
Increasing the value proposition for all MSC partners and where possible, taking out costs and complexity whilst maintaining the rigour of the programme, is one of the core strategic objectives as outlined in MSC’s new Strategic Plan, covering the period 2012-17.
Main strands of revised MSC ecolabel usage pricing
Effective 1 April 2013, the beginning of the MSC financial year, the revised royalty arrangements will be as follows:
• The royalty fee of 0.5% will be tiered to decrease as the value of sales of MSC labelled products rise. In the tiered system, adding new products will result in a progressively lower rate, which is designed to incentivise an increase in products from key high-volume supply partners.
• Independent outlets such as fishmongers and restaurants trading less than £125,000 ($200,000) wholesale value of MSC labelled products annually will pay a fixed fee of £156 ($250) annually rather than a fee based on percentage of sales. Small businesses will no longer pay the volume licensing fee. The annual fixed fee will make the MSC programme more accessible to small businesses such as independent restaurants and fishmongers by making costs more predictable upfront, reducing uncertainty and minimizing any administrative burden of tracking and reporting sales. It will also encourage use of the MSC ecolabel in these settings.
The tiered royalty fees for higher-volume licensees and fixed fees for small businesses will be implemented across all markets globally.
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