According to news published by Camila Knudsen in Norwegian business media E24, Mowi says the layoffs are not relevant to them right now. The reaction from the aquaculture giant was widely expected after another big player, SalMar, announced today that they had sent layoff notices to 851 employees and Lerøy Seafood did the same last week, announcing redundancies to 399 employees.
If we add the two figures together and take into account what both companies stated when making them public, 1250 people will lose their jobs as a result of the government’s proposal for a new salmon tax. Mowi’s Communications Director, Ola Helge Hjetland, thinks these redundancies show the seriousness of the situation and told E24 that this madness must end now. In his words, they cannot understand how the government can sit back and watch people in the districts being laid off without lifting a finger.
Finally, in his statements to the Norwegian media, Hjetland has warned that if the process is not postponed or the proposal to use a standard price is changed immediately, this will, of course, be relevant for them. But, precisely the issue of standard pricing seems to be what is shaping the situation right now.
No fixed-price contracts for processing, no jobs
“Although we have worked intensively for over a month to get contracts in place with our customers, we have not succeeded”, said Henning Beltestad, CEO of Lerøy Seafood Group, last week. “To process the salmon, we have to have long-term contracts, and this market has almost completely disappeared following the government’s proposal to triple the tax and the model they are using”, he added. “If we don’t have customers for our processed products, we can’t produce them either”.
This morning, SalMar followed the same line. “The government’s proposal for a new salmon tax has destroyed the market for long-term fixed-price contracts”, they claimed, and stressed that these contracts are “absolutely necessary in order to fill the facilities with enough processing activity”. The company further stressed that in 2021 it had a processing share of over 45%. “Processing provides three to four times as much employment as the export of whole, gutted salmon. With so much further processing, SalMar and our employees are hit all the harder by the government’s proposal”, said its CEO, Frode Arntsen.
Moreover, the seriousness of the situation alluded to by Ola Helge Hjetland seems to be confirmed by the report ‘The challenges of the salmon tax’. The study by Junior Consulting and NHHS Consulting, which analyzes the possible consequences that the government’s proposal will have for investments, value creation, and jobs, has assured that “the tax will hit harder and wider than what was intended”.