Leroy Seafood Group CEO Henning Beltestad took time during his company's Q4 announcement to criticise the Norwegian government's ground rent tax, the so-called "salmon tax" which has caused shock waves across Norway's salmon farming industry. Calling the tax "a dramatic change for our company and for the whole farming industry in Norway," he said, "this proposal will delay the development of Norwegian salmon in the global industry."
The Leroy group, which today reported a drop in profits of approximately NOK 100 million for Q4 in comparison to 2021, stated in its Q4 report that the Norwegian government's proposed ground rent tax reveals "a lack of insight into the industry's value chain and value creation, and hence of the consequences the proposal will have."
"It is important that the government understands the industry's value chain, including its level of activity and key role in Norway's coastal communities. We have a duty to remind the government, and its advisers, that the industry is currently scheduled to export more than 25,000 tonnes of food every week. This represents almost 125 million meals, and requires predictability."
"Industrial developments and employment in capital-intensive activities exposed to global competition, such as fish farming, fisheries and related industry, represent challenges and require predictability. In turn, predictability of this kind requires businesses and, not least, politicians at national level to implement a reasonable long-term business policy," the report states.
The group describes the government's proposal as "an example of political risk of the kind we have not experienced in recent times in Norway". Noting that the salmon tax conflicts with previous declarations stating that the government "will execute a predictable and responsible tax policy for business and industry", the Leroy report argues that the new tax also contradicts the governing parties' own policy platforms.
Presenting the financial results, Leroy Seafood Group CFO Sjur Malm also alluded to the debate within Norwegian media on the salmon industry's contribution to society and the economy. He said that the group's activities support 13,000 Norwegian jobs, and that the company already contributes more than NOK 1.5 billion in taxes and fees, as well as investing in Norway's coastal communities.
"Investments are important for growth, and they drive knowledge," said Malm during his presentation. "Norway today is world-leading in this industry, and that would not have been possible without investment. With the resource tax it will be challenging to continue with growth investments, and in 5-10 years it will make all the difference in the world to where the industry is positioned."
Leroy Seafood is not alone in making the salmon tax a key theme of its end-of-year results. Fellow Norwegian salmon farming giants Mowi and Grieg Seafood also used their Q4 platforms to criticise the tax initiative. Mowi's CEO Ivan Vindheim said that the tax "will completely undermine future growth prospects for coastal Norway's most critical industry", and described the tax as "a dark cloud" hanging over the industry. Meanwhile, Grieg Seafood chief Andreas Kvame noted that due to the ongoing political uncertainty surrounding the salmon tax, Grieg Seafood has "put all growth investments in Norway on hold," amounting to NOK 2.3 billion. Previously, Leroy has reacted to the ground rent tax with shock layoffs of 339 employees at four of the Group's processing operations, and a freeze on investment projects.