The European Commission has informed six of the largest Norwegian salmon producers it is advancing an investigation into price fixing in the spot market.
The E.C. alleges Mowi, Cermaq, Grieg, Bremnes, Lerøy, and SalMar breached E.U. antitrust rules by colluding to distort competition in the market for spot sales of Norwegian-farmed Atlantic salmon in the E.U. between 2011 and 2019, including exchanging commercially sensitive information. It said it acted after receiving information from several market players about alleged illegal conduct.
“The Commission has concerns that, between 2011 and 2019, the six salmon producers exchanged commercially sensitive information relating to sales prices, available volumes, sales volumes, production volumes, and production capacities, as well as other price-setting factors,” it said. “The suspected aim of this alleged conduct was to reduce normal uncertainty in the market for spot sales of Norwegian-farmed Atlantic salmon into the E.U.”
The investigation began in February 2019 and included raids of company facilities in several E.U. countries. Since then, the E.U. has not issued any update on the investigation’s status, even as the U.S. Department of Justice opened and then closed its own investigation and as several class-action lawsuits were filed and settled. The E.U. does not face any legal deadline to complete antitrust inquiries into anticompetitive conduct.
“The duration of an antitrust investigation depends on a number of factors, including the complexity of the case, the extent to which the companies concerned cooperate with the Commission, and the exercise of the rights of defense,” it said.
The E.C.’s subsequent statement of objections “does not prejudge the outcome of an investigation,” it said.
Rather, it advances the investigation by formally informing the six salmon companies in writing of the allegations against them. The companies are then permitted access to review the E.C.’s investigatory file, including documents, and must reply in writing. The companies can also each request an oral hearing with E.U. and national competition authorities to present their views on the case. Following the exercise of these so-called rights of defense, if the E.C. concludes there is sufficient evidence of an infringement, it can move to prohibit this type of conduct in the future and impose a fine of up to 10 percent of a company's annual global sales.
E.C. Executive Vice President for A Europe Fit for the Digital Age program Margrethe Vestager said in a statement the alleged anticompetitive conduct only concerns sales on the spot market into the E.U., as opposed to sales based on long-term contracts. Spot sales are those for which prices, volumes, and other sales conditions are agreed per sale, based on the market conditions on the day of the sale, according to the E.C. If true, such behavior would be an infringement of Article 101 of the Treaty on the Functioning of the European Union, which prohibits cartels and other restrictive business practices.
The allegations only concern sales of fresh, whole, and gutted Atlantic salmon farmed in Norway, which accounts for nearly 80 percent of all farmed Atlantic salmon exported from Norway. Norway accounts for over half of the production of farmed Atlantic salmon worldwide, and the E.U. is its main importer. The alleged conduct does not concern frozen farmed Atlantic salmon or processed products such as salmon fillets, loins, or smoked salmon, according to Vestager.
“We are concerned that six salmon producers exchanged commercially sensitive information with the aim to limit competition on the market.” Vestager said in a statement.
Each of the companies named in the statement of objections denied engaging in any illegal behavior regarding the manipulation of spot salmon prices.
“LSG strongly rejects the Commission's allegations. LSG is dedicated to ensuring compliance with relevant competition law and always competes vigorously to offer customers the best products and terms,” Lerøy Seafood Group said in a statement. “The [statement of objections] is not a final decision and has been issued in accordance with the Commission's ordinary procedures for such an investigation. The [statement of objections] includes the Commission's preliminary assessments only. LSG has a right of response and will, after carefully reviewing the SO, provide its comments to the Commission. LSG has cooperated with the Commission throughout the Commission's investigation and will continue to work constructively with the Commission.”
Lerøy Seafood said it couldn’t comment further on the case.
“It is not possible at this stage to make any statement on whether the case will result in sanctions, other negative consequences for LSG, or when the case will end,” it said. “As this is an ongoing investigation, it is not possible for LSG to provide any further comment.”
Grieg Seafood it “will examine the statement of objections carefully and continue to fully cooperate with the Commission's investigation.”
“Grieg Seafood ASA denies any anti-trust infringements or anti-competitive behavior by it or any of its subsidiaries. The Company will exercise all its rights of defense,” it said.
Mowi, the world’s largest salmon producer, denied it had been involved in any illegal behavior.
“Mowi contests the Commission's preliminary view and the characteristics of the alleged behavior in the market for farmed Norwegian Atlantic salmon and strongly believes there has been no infringement of competition rules,” it said. “Mowi will now carefully review the Commission's statement and reply in writing, following standard process.”
SalMar said it had cooperated with the E.C. throughout the entire case, including during the 2019 raid of a Scottish Sea Farms facility jointly owned by SalMar and Leroy Seafood.
“SalMar strongly disagrees with the Commission's preliminary assessment and will account for SalMar's view in a thorough reply to the Commission.
Cermaq said it “will fully cooperate with the European Commission in their investigation.”
“Cermaq Group AS disagrees with the preliminary findings from the Commission and will carefully examine the details of the statement of objections and consider how to respond,” it said. “Due to the ongoing investigation and hearing period, we will refrain to comment on the matter until the European Commission had made a final decision.”
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