Leroy Seafood is cancelling its purchase of a farming permit for 614 tonnes of additional production capacity because it said it is no longer wise to proceed, given the potential new taxes announced on September 8.
The world’s second largest salmon producer said it bought the additional license capacity at auction for NOK 123 million ($11.5 million) this year.
“Lerøy has decided to cancel this purchase. The proposal to introduce ground rent tax and thereby increase the tax rate from 22 percent to 62 percent creates unjustifiable framework conditions for the industry in Norway, and changes opportunities and incentives for investments other than maintenance,” it said.
The company is also pausing major new investment plans in Norway until parliament decides on the tax proposal. It said a NOK 420 million ($39.2 million) project on Skjervøy in Troms, which is already underway, is one of the investments that the board decided to stop.
CEO Henning Beltestad said Norway sets the bar high in farming Atlantic salmon sustainably, thus it is incumbent upon the Norwegian government to continue to facilitate the production of food for the world’s population, especially during these times.
“The proposal for ground rent tax will stop the development of the industry value chain and thus reduce all its direct and indirect ripple effects along the coast,” said Beltestad.