Norwegian-headquartered farmed salmon group SalMar ASA has sent notice of layoffs to 851 employees at its processing facilities in Frøya and Senja, with the government’s proposed new salmon tax cited as the main reason for the “deeply regrettable” job cuts.
In a statement, SalMar said that 696 people affected by the notification are associated with further processing at the two facilities, and the remaining 155 will be associated with the slaughterhouse at InnovaMar on Frøya.
The slaughterhouse job cuts are due to normal fluctuations and lower slaughter volume in the winter months.
Limited redundancies linked to slaughter volume have been the norm for many years, SalMar said.
According to SalMar, the proposed tax had destroyed the market for long-term fixed-price contracts.
Such contracts are usually entered into well in advance of deliveries and are absolutely necessary in order to fill the facilities with enough processing activity, it said.
If adopted, the tax on salmon production will triple, SalMar stated.
SalMar said that taxable income as the basis for the new tax must be a “spot price” for whole fish, which may deviate significantly from the actual realized sales price of a varied product and contract portfolio.
“This has a particularly negative impact on further processing, which is normally based on fixed-price contracts, not spot prices. There is simply no one willing to enter into fixed-price contracts anymore,” it said.
There will, however, be room for some activity in processing after the turn of the year, mainly due to contracts entered into before the government presented its tax proposal in September.
“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.”
Fellow salmon farming company Lerøy Seafood Group ASA last week sent out redundancy notices to 339 employees at four of its processing operations, also blaming the move on the proposed tax.
