The majority of Norwegian salmon farming companies are family-owned, but on average family-owned companies have fewer permits and produce less than other such companies.
Business ownership can affect a number of factors: For example, the percentage of value added that accrues to companies in Norway, how companies are developed and their impact on local communities and regional areas.
One of the objectives of the Norwegian aquaculture industry has been to have companies of varying sizes, and smaller companies have in some cases been given priority when new permits are issued.
After having identified ownership of those fish farming companies that were in operation in 2020, Nofima is now able to present the results. The report on ownership was commissioned by the Norwegian Ministry of Trade, Industry and Fisheries.
Defined by a common majority
The ownership of fish farming companies is often complicated, as is the case for businesses generally. You will find different group structures, the use of investment/holding companies, cross-company ownership, or various other forms of full- og part-ownership.
Nofima chose to define fish farming companies asfamily-owned ifan individual or family effectively owns in excess of 50% of a company that has been granted permission to engage in aquaculture. In other words, families with a common majority at the AGM of the company concerned.
“In some cases, a family might have majority ownership in a fish farmer’s parent company, but an effective ownership stake of less than 50% percent in the fish farming company itself. Consequently, these fall outside our definition,” explains Thomas Nyrud, a researcher in the Department of Business Economics at Nofima.
Other definitions of family-owned companies found in the research literature also incorporate other conditions, including the family’s role in management, board positions or other matters, but Nofima has chosen to disregard these in its analysis.
122 companies analysed
In total Nofima has analysed the ownership of 122 fish farming companies in Norway, based on the following criteria: they produce edible fish, i.e. salmon, trout and rainbow trout, and have a permit to produce at least 100 tonnes a year. This selection covers most of the edible fish produced on an industrial scale in Norway.
These 122 companies have a total of 1,049 permits and a total capacity of 970,000 tonnes of maximum total biomass (MTB). MTB determines how much live fish the holder of a permit can have in the sea at any given time.
Under the requirement of common majority, 73% of the 122 companies are defined as being family-owned. The family businesses control a capacity of 471,000 tonnes of MTB, or a total of 49% of the total capacity of the 122 companies. The remaining 51% of live fish are controlled by the 33 companies defined as being non-family-owned.
Foreign owners were found to control 31% of the production capacity of the companies included in Nofima’s study. However, among the family-owned companies, the percentage of foreign owners is significantly lower, with just 10% of MTB.
Those companies that are not family-owned have on average 60% higher MTB than the family-owned companies. The companies in the survey range from non-family-owned MOWI (Marine Harvest), which is the largest aquaculture company in Norway – and the world – with a total of 222 permits and 183,000 tonnes of MTB. The smallest company included in Nofima’s survey has only one permit and can hold a maximum of 100 tonnes of biomass.
As many as 90% of the family-owned enterprises have ten or fewer permits and can have a maximum of 10,000 tonnes of fish in their sea cages.
Navigation between what should be defined as family-owned can be done in several ways, and different definitions could change the results somewhat.
For example, two of Norway’s largest companies – Salmar and Grieg Seafood – both listed on the stock exchange, are defined as family-owned because the Witsøe and Grieg families own more than 50% of the shares. These two large companies account for just over one quarter of the total volume of MTB that Nofima has defined as being family-owned.
In Nofima’s report, Lerøy and Nova Sea are not defined as being family-owned. This is because the Møgster family (Lerøy) and the Olaisen family (Nova Sea) have effective ownership of less than 50% of the shares in the companies that hold the fish farming permits.
In total, there are seven companies where the families own less than 50% of the companies, but at the same time exert considerable influence over the companies by virtue of their majority ownership of the parent companies. Such business-groups often constitute an economically and organisationally integrated entity, where the parent company heads the group by taking the interests of the whole group into account. Consequently, these families may exert considerable influence, even if they do not have a common majority at the general meeting of the company that holds the fish farming permit.
As already mentioned, Nofima has chosen to exclude these from its definition of family-owned companies in its report, but if all seven of these companies are included, the number of family companies increases to 96 (out of 122), corresponding to 79% of the companies.
Vestland, Trøndelag and Oslo dominate
The geographical distribution of MTB has also been calculated in accordance with where the various owners reside. Vestland, Trøndelag and Nordland are the three counties with the largest percentage of MTB associated with family-owned companies. Almost three-quarters of all MTB in Norwegian family-owned companies is registered in these three counties. The largest municipality, Frøya, has twice as much biomass associated with family-owned companies as the second municipality on the list, i.e. Bergen.
Among those companies that are not family-owned, the highest amount of ownership is linked to Oslo. Oslo is registered has having almost three times more MTB among non-family-owned fish farming companies than the second municipality on the list, Austevoll.