Norwegian salmon giant SalMar is to lay off 851 people at its processing plants on Frøya and Senja, laying most of the blame on the government’s salmon tax proposal.
The shock announcement follows Lerøy Seafood’s decision last week to make 339 people redundant and a similar announcement by Romsdal Processing involving 94 workers.
This brings the total number of layoffs so far to almost 1,400 – with more expected to follow.
SalMar said today: “This is mainly because the government’s proposal for a new salmon tax has 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.
“Some 696 of those affected by the notification are associated with further processing at the two plants.
“The remaining 155 will be associated with the slaughterhouse at InnovaMar on Frøya and this is 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.
“In future, SalMar will do its utmost to ensure that those who now receive these notices can have work to go to even after the turn of the year.”
The announced redundancies apply to the period 1 January to 30 June 2023, and include 748 employees at InnovaMar in Frøya (where SalMar was born) , and 103 employees at InnovaNor in Senja.
The statement continued: “The government’s proposal, if adopted, involves a tripling of the tax on salmon production in Norway.”
It explained that the deemed taxable income as the basis for the new tax will be based on be a “spot price” for whole fish, which may deviate significantly from the actual realised sales price of a varied product and contract portfolio.
SalMar said: “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.
“However, there will be room for some activity in processing also after the turn of the year, mainly due to contracts entered into before the government presented its tax proposal on 28/9/2022.”
SalMar said it found the current situation deeply regrettable. “In the future, we will do our utmost to find remedial measures in a difficult and demanding situation for everyone. This will be done in close collaboration with the employees and their union representatives. Such measures can be, for example, maintenance, skills building and the possibility of part-time employment at other departments in the company.”
The company said the 851 affected posts would not all go at the same time but redundancies would be spread over a period.