(The following commentary was originally published on sister publication Intrafish.no and was written by Oystein Hage, editor-in-chief of Fiskeribladet and IntraFish.no.)
Norway-based salmon giant Mowi has warned it will file a lawsuit against the Norwegian government in response to the new salmon tax imposed in May.
When record results were presented at the same time as the saber rattling started, the last ounce of people's sympathy also disappeared.
The company believes the tax favors smaller salmon farmers, putting the big companies at a disadvantage, with the tax only applicable on profits above NOK 70 million (€6.5 million/$6 million).
The company has also criticized the tax because it is retroactive: no deduction was given for costs incurred from fish that were in the sea at the turn of the year 2022/2023.
The attack on the base rate comes as major Norwegian salmon companies present record profits in their quarterly earnings. High salmon prices and a weak Norwegian Krona are worth their weight in gold for these companies.
Nevertheless, SalMar owner Gustav Witzoe and Mowi CEO Ivan Vindheim are now getting ready to pick a fight.
There is a broad political majority in favor of the aquaculture tax, and the structure is such that those with the biggest profits have to pay the most. The bottom deduction will mean that some of the smaller locally owned companies are taxed more gently, which is in line with Norway's Center Party's tax and business policy.
With this in mind, it is important to remember that the owners of the small and medium-sized companies received increased wealth tax on their concessions in 2022. The large listed companies escaped that. Nobody heard anything from SalMar and Mowi about that tax hike.
The conflict around retroactivity is more problematic, and we understand the salmon farmers' frustration. Changing the rules of the game in this way is politically poor craftsmanship, and creates little predictability in tax policy.
We still find it difficult to see how Mowi will actually take legal action against these political decisions. This is substantiated by law professor Finn Arnesen, who points out to IntraFish sister publication Dagens Naeringsliv that fish is exempt from the European Economic Area (EEA) agreement, and that Mowi's entire argument appears to be more fantasy than fact.
Not the first time
It is not the first time salmon farmers have taken legal action against the state when they disagree with the introduction of new laws, rules and political decisions. Western Norway's salmon farmers took legal action against the state because they disagreed with the design of Norway's salmon farming industry traffic light scheme.
The argument at the time was that the political decisions would be a form of collective punishment for the farmers in the entire area. After two court rounds, the lawsuit ended with a punch in the stomach for the salmon farmers.
In other matters related to growth, salmon farmers have been diligent users of lawyers. Even if Mowi has enough money to hire a whole team of lawyers, we doubt whether they will succeed any better than the 25 salmon farmers in western Norway did.
We, therefore, think the country's other salmon farmers would be wise not to rely on Mowi in this matter. We fear the industry barely realizes the image they are creating for themselves when they come up with schemes like this.
When record results were presented at the same time as the saber rattling started, the last ounce of people's sympathy also disappeared. If the top business leaders had spoken to a few more average Norwegians, they would have understood. It's really just sad.
Even among the players who were present at the Aqua Nor conference in Trondheim last week, the consequences of the actions were the big topic of conversation.
Although both the salmon farmers and the suppliers are generally opposed to ground rent in farming, they clearly distanced themselves from the threats of Vindheim and Witzoe. The actions would be destructive for the industry's reputation, was the attitude.
We, therefore, feel sorry for all small and medium-sized farmers around the country who work to promote the industry when at the same time they experience some of the country's richest people handling tax matters in this way.
This is pure reputational suicide for Mowi ... in the worst case for the entire salmon industry.