Harvesting salmon at a Norwegian slaughtering facility. (Photo: Odin Hjellestad)
Norway's aquaculture ceiling considered a violation of EEA
Friday, July 13, 2012, 03:00 (GMT + 9)
The Norwegian ban on controlling more than 25 per cent of fish farming concessions is in breach of the fundamental European Economic Area (EEA) rules, according to a letter of formal notice sent by the European Free Trade Association (EFTA) Surveillance Authority to Norway this week.
Norwegian law states that acquisitions leading to majority control of more than 15 per cent of the total number of salmon and trout farming concessions are subject to prior authorisation of the Ministry of Fisheries and Coastal Affairs. Acquisitions leading to majority ownership of more than 25 per cent of the concessions are outright banned.
Since these obstacles hinder or even make impossible business structures above a certain size, the establishment of businesses in Norwegian aquaculture becomes relatively unattractive. The Authority therefore contends that the freedom of establishment has been infringed upon.
While the Authority acknowledges that regional policy objectives may justify certain restrictions, Norway has been unable to show that the ownership obstacles are appropriate and necessary to achieve the legitimate objectives. Achieving a particular industry structure such as a certain mix between small, medium and bigger businesses is a purely economic objective which does not justify restrictions to the fundamental freedoms of the aquaculture industry, the Authority argues.
Issuing a letter of formal notice is the first stage of the infringement process, giving Norway a two-month deadline to offer its observations. The Authority will afterward consider, in light of any observations received, delivering an opinion.
Norway exported more than USD 5 billion worth of salmon in 2011, two-thirds of which were sold to other European countries.
Analysts consider the news beneficial for Marine Harvest, the world's biggest Atlantic salmon producer, which is producing higher amounts of salmon this year, Reuters reports.
"This is a great victory for Marine Harvest, which can be a part of consolidation in Norway," Kolbjoern Giskeoedegaard, an analyst at Nordea, said.
Martha Grindaker, a spokesperson at Marine Harvest, said the company had expected ESA's decision.
"We see no reason why we as an industry should be regulated more stringently or differently in this area than in other industries," she added.
The EFTA Surveillance Authority monitors compliance with EEA rules in Iceland, Liechtenstein and Norway, enabling them to participate in the European internal market. The Authority’s job is to protect the rights of individuals and market participants who find their rights violated by rules or practices of the EFTA States or companies within those states.
By Natalia Real