Gardar Svavarsson of LVF has postet an article in Austurfréttir criticizing the government’s planned increase of fishing fees.
Calls on MPs from the Northeast Constituency to take a closer look at the impact of fishing fees
Author: Gunnar Gunnarsson • Written by:April 4, 2025.
The managing director of Loðnuvinnslan in Fáskrúðsfjörður says it is clear that the company will have to respond in some way if plans to change fishing fees become a reality, which he describes as an enforcement of the company’s operations. He hopes that the members of parliament in the constituency will take a closer look at what has been happening in the environment of pelagic companies in recent months.
“It is quite clear that the planned fishing fees as set out in the government’s bill will have a very heavy impact on the operations of a company like Loðnuvinnslan,” says Garðar Svavarsson, managing director of Loðnuvinnslan, in response to a question from Austurfréttar about the expected impact of changed fishing fees on the company’s operations.
Loðnuvinnslan is a mixed fishery, has strengthened itself in flatfish in recent years but has also been strong in pelagic fish. The company’s quota is not large, which is evident, among other things, from the fact that its ship Hoffell received less than 2% of the capelin quota that was allocated this winter. However, the capelin industry has been resourceful in purchasing raw materials from foreign ships.
Significant increase in Capelin production
Garðar says that in recent years the company has invested in expensive operating units in the pelagic sector and that they have been operated successfully, despite the limited quota. Last year, 65% of the operating surplus, before taxes and financial costs, went to fishing fees. Based on unchanged catches, the company’s fishing fees should increase by 30% this year.
The bill proposes a significant increase in fishing fees for herring, blue whiting and especially mackerel, which Loðnuvinnslan employees have calculated will increase the company’s fishing fees by 116%. This will further increase the proportion of profits that go to fishing fees, which in turn could affect investments.
Garðar also points out that pelagic fishing is unreliable. There has been a capelin shortage for two years in a row and mackerel has to be harvested far in advance. Therefore, he does not believe that the operation should bear these greatly increased taxes.
It is clear that action is needed if the plans are to succeed.
He also points out that Loðnuvinnslan is the largest owned by Kaupfélag Fáskrúðsfjörður, which in turn is owned by local residents with 360 registered members. The strategy has been to make a modest dividend and use the funds for investments to strengthen the company. “The proposed taxation will significantly reduce the company’s ability to make further investments and stand in the way of necessary renewal in operations,” he says.
He calls on the MPs of the Northeast constituency to carefully examine the impact of the bill. “I simply do not believe that constituency-elected MPs, wherever they stand in politics, can support such an approach to the company’s operations.”
He says that Loðnuvinnslan intends to fight to keep processing in Fáskrúðsfjörður, but advocates for fisheries companies have warned that the bill’s proposals mean that it is more likely that catch will be exported unprocessed from the country to countries where wages are lower. “If these plans become a reality, it is clear that the company will have to respond in some way. However, it is in the spirit of the company and its employees to move forward, and therefore it is unbearable to have to play defensively with the help of the government.”
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