July 16, 2012

 

Norway's limitation on aquaculture control considered violation of EEA

Norway's ban on possessing more than 25% of fish farming concessions is in violation of the fundamental rules of the European Economic Area (EEA), according to the European Free Trade Association (EFTA) Surveillance Authority.

 

Norwegian law states that acquisitions leading to majority control of more than 15% of the total number of salmon and trout farming concessions are subject to prior authorisation of the Ministry of Fisheries and Coastal Affairs. Acquisitions leading to majority ownership of more than 25% of the concessions are outright banned.

 

Since these obstacles hinder or even make impossible business structures above a certain size, the establishment of businesses in Norwegian aquaculture becomes relatively unattractive. The Authority therefore contends that the freedom of establishment has been infringed upon.

 

While the Authority acknowledges that regional policy objectives may justify certain restrictions, Norway has been unable to show that the ownership obstacles are appropriate and necessary to achieve the legitimate objectives. Achieving a particular industry structure such as a certain mix between small, medium and bigger businesses is a purely economic objective which does not justify restrictions to the fundamental freedoms of the aquaculture industry, the Authority argues.

 

Issuing a letter of formal notice is the first stage of the infringement process, giving Norway a two-month deadline to offer its observations. The Authority will afterward consider, in light of any observations received, delivering an opinion.

 

Norway exported more than US$5 billion worth of salmon in 2011, two-thirds of which were sold to other European countries.

 

Analysts consider the news beneficial for Marine Harvest, the world's biggest Atlantic salmon producer, which is producing higher amounts of salmon this year, Reuters reports.

 

"This is a great victory for Marine Harvest, which can be a part of consolidation in Norway," Kolbjoern Giskeoedegaard, an analyst at Nordea, said.

 

Martha Grindaker, a spokesperson at Marine Harvest, said the company had expected ESA's decision.

 

"We see no reason why we as an industry should be regulated more stringently or differently in this area than in other industries," she added.

 

The EFTA Surveillance Authority monitors compliance with EEA rules in Iceland, Liechtenstein and Norway, enabling them to participate in the European internal market. The Authority's job is to protect the rights of individuals and market participants who find their rights violated by rules or practices of the EFTA States or companies within those states.