21-08-2012 | Restrictions on foreign ownership of the fish-farming industry
The Faroese Minister of Trade and Industry has introduced a bill which restricts the level of foreign ownership of Faroese fish-farming companies to a maximum of 30 per cent. This is in order to prevent important strategic decisions about the industry from being taken in other countries.
From now on, the level of foreign ownership of the Faroese fish-farming industry will be restricted. This is the result of a bill presented to parliament by the Minister of Trade and Industry, Johan Dahl, which will enter into force with retrospective application from 9 August.
Since 2009, foreigners have been allowed to own up to half of Faroese fish-farming companies. According to the Minister of Trade and Industry, the purpose of the new bill is to restrict the level of foreign ownership of Faroese fish-farming companies to a maximum of 30 per cent.
The bill was presented to parliament on 9 August, but it has yet to receive a full parliamentary hearing. This is in order to avoid unintended actions from foreign companies, who would be likely to seek ownership of Faroese fish-farming companies before the bill came into action. Thus, when the bill enters into force after the hearings, it will be with retrospective application from 9 August.
The bill comes at a time when the Faroese fish-farming industry is doing very well. The largest fish-farming company, Bakkafrost, saw a significant increase in their profit after taxation for the first half of this year compared to the same time period last year. The profit for the first six months this year was 14.4 million Euros compared to 10.5 million Euros for the first six months in 2011.
'As a whole, we are very happy with the result for the first half of 2012, during which all our branches of activity have achieved a surplus. The price of salmon has remained decent, even though supply has increased by about 30 per cent. The prospects for the future also look good. The increase in supply is not expected to last, so we expect there to be a better balance between supply and demand from the fourth quarter and onwards', says Regin Jacobsen, CEO of Bakkafrost.
Bakkafrost has achieved these good results even though the global price of salmon has declined.
The CEO of Bakkafrost was unaware that the political authorities were thinking about restricting the level of foreign ownership of the Faroese fish-farming industry. He wants representatives for the industry to have a say in the upcoming parliamentary hearing, and he wants all investors to receive equal treatment during the proceedings.
On the other hand, the bill would benefit Bakkafrost. There is talk that the large Norwegian fish-farming company, Salmar, which already owns almost 30 per cent of Bakkafrost, has plans to purchase an even larger proportion of the successful Faroese company. The majority owners do not wish for this to happen, and thus the new bill will protect Bakkafrost from being taken over by foreign investors.
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