July 7, 2006

Pan Fish merger up against more barriers

A planned merger between two major salmon suppliers hit a potential roadblock Thursday (Jul 6) as the UK's Office of Fair Trading (OFT) referred the proposed acquisition by Pan Fish ASA of Marine Harvest NV to the Competition Commission (CC).

The OFT said it has decided that the situation warranted the need in relation to the supply of farmed Atlantic salmon in the European Economic Area (EEA).

Vincent Smith, OFT Director of Competition Enforcement said: the merger brings together the two largest suppliers of farmed Atlantic salmon in the EEA.

The OFT said the loss of rivalry between these companies may increase prices of farmed Atlantic salmon and harm UK consumers.

The Commission is expected to report by December 20.

While Pan Fish has gained approval from Norwegian authorities on the planned merger, it faced widespread opposition in Scotland as fears of losses of jobs in the Scottish industry mounted.

If the merger goes ahead, Pan Fish would become the largest producer of Atlantic salmon in Europe and it would control up to half of Scottish salmon production.

Until recently Scottish producers were also worried that the new company would import live salmons from Norway and thus contaminate the gene pool of Scottish salmon. Pan-Fish, along with other major fish companies, laid those fears to rest as it publicised widely a statement saying no live fish would be imported.