In light of the Norwegian government’s proposal for a 40% resource rent tax on the country’s aquaculture industry and a resulting total tax of 62%, Mowi has announced it is cancelling its acquisition of 914 tonnes MAB for a total value of NOK 183 million (€18.3 million).
“The government’s tax proposal means that Mowi can no longer justify the purchase price. Mowi respectfully advises the government to reconsider its resource tax proposal,” Mowi said in a statement on Tuesday.
“The aquaculture industry is of great importance for the future of Norway and it is in the nation’s best interests to see it grow, however, this proposal will severely damage the ability and willingness to make investments. A tax rate of 62% will put an end to many significant investment plans along the Norwegian coast, leading not only to less employment locally but also to a massive diversion of funds away from coastal communities,” Mowi continued.
Read more: Cermaq freezes investments in Norway
“Mowi is a global company and salmon farming is not bound by geography – it can take place in sea and on land anywhere in the world, close to its major markets. If the proposal for 62% tax is approved by parliament then the Norwegian aquaculture industry faces the greatest setback in its 50-year history, and over time Norway stands to lose its leading position within aquaculture to other countries,” the company concluded.
Mowi’s decision and criticism of the resource rent tax comes after a string of aquaculture companies in Norway froze or cancelled planned investments.
On Monday, Cermaq announced it was freezing investments in the country, while the company waits for a “clearer understanding of the announcement last week and the final proposal for resource rent tax.” Similarly, Leroy Seafood, the world’s second largest salmon producer, cancelled the purchase of an additional licence capacity over the “unjustifiable framework conditions for the industry in Norway,” as a result of the proposed tax.