MercoPress. South Atlantic News Agency

UK Fair Trading Office scrutinizes salmon industry

The United Kingdom Office of Fair Trading has referred the anticipated acquisition by Norway's Pan Fish ASA of its competitors Marine Harvest NV and Fjord Seafood to the Competition Commission, CC.

According to FIS, CC has been asked to decide whether the acquisition may be expected to result in a substantial lessening of competition in the UK market for the supply of farmed Atlantic salmon in the European Economic Area, EEA.

The acquisition will bring together the two main producers of farmed Atlantic salmon in the EEA and CC considers that the lessening of competition could cause an increase in prices and therefore harm British consumers.

"And this will be particularly damaging for those consumers who have a strong preference for the Scottish salmon", said Vincent Smith from CC.

Pan Fishing Managing Director Atle Eide said that "the British production volume is a relatively small part of the total production of Pan Fish ASA. But we have a share above 50% n the British salmon production and we do not need to keep the share so high".

Pan Fish apparently holds a small percentage of the EU sea food market, 700.000 tons out of a total 16 million tons. But the company seems willing to sell some of its production capacity in the UK to satisfy CC, precisely if it is believed that Pan Fish's market control is growing too strong and thereby hindering free competition. "We have already been considering that option, independent of the outcome of the decision to be made by the CC", said Eide.

Pan Fish agreed last March to buy Marine Harvest for 1.3 billion Euros from Dutch owners Nutreco BV, forming the world's biggest salmon aquaculture producer. A second takeover a few months later of the smaller Norwegian company Fjord Seafood for 750 million Euros lifted its share of global farmed salmon production to one quarter. Michael Foxley from the Highland Council said there are mounting fears about the merger and the possible loss of jobs that might occur.

"It's inconceivable that Norway should have authorized. We're concerned that our agriculture interests might end under monopoly control", insisted Foxley.

The Scottish salmon industry has lost 1.500 jobs in three years. In 2001 and 2002 the industry employed 10.000 people, while in 2004 the linked labour force had dropped to 8.500. A decision by the CC is expected by September 20.