SalMar and Lerøy Seafood Group shaken by new resource rent tax proposal.
The Norwegian Government this morning proposed to introduce a resource tax on salmon and trout farming of 40 perent for volumes above 4-5,000 tonnes. The tax is proposed with effect for 2023 and must be approved by the Norwegian parliament. According to the press release, the proposal if approved, will give a marginal tax rate on farming of salmon and trout of 62 perent.
Commenting on the proposal CEO of SalMar Linda L. Aase says:
“This is a tax on aquaculture companies creating value and workplaces on the coast of Norway. A tax like this will have significant negative ripple effects for all adjacent industries of the aquaculture industry and the jobs it creates.”
“SalMar will revert with additional information on the consequences of such taxation for our group operations once further details of the new tax have been clarified.”
Another salmon farmer, Lerøy, shares the view of Aase and SalMar:
“The Board and management in LSG are in the process of assessing the proposal but do not have a complete overview yet. However, the proposal is undoubtedly hostile to the industry. If approved, it will have a strong negative impact on the entire industry, unless decision makers at the “Storting” and people along coastal Norway manage to stop the proposal following the ongoing consultation period,” the board of Lerøy states.
Lerøy, SalMar and most of the other salmon farming stocks fall steeply at the Oslo Stockexchange. SalMar has lost a whopping 27 percent of its market cap so far today.