“Salmon producers have little market power”
No Norwegian salmon producer is large enough to influence the market prices, a fresh doctoral thesis shows. “This is an important result that can contribute to further growth in the Norwegian salmon industry,” says doctoral candidate and Nofima scientist Thomas A. Larsen.
Larsen reveals that no Norwegian producer of salmon is sufficiently large to be able to influence the export price of fresh salmon to their advantage.
“This may mean that the markets perceive fresh salmon as a generic product, and that they have equal preference for the various Norwegian producers and their product. If this is the case, the Norwegian Seafood Export Council has done a brilliant job promoting Norwegian salmon out in the markets,” says Larsen.
Contracts are widespread
Larsen has also analysed the use of contracts in the salmon industry, and has found a widespread use of fixed-price contracts between actors in the Norwegian salmon industry and foreign importers.
Even though there are at times large differences between the market price and the contract price, the total income for the industry has not been significantly affected by the contracts. However, for individual companies the contracts have had a significant effect, in a positive direction for some companies and in a negative direction for others.
The thesis ascertains that what the commercial actors have believed is actually correct. The price of salmon is controlled by supply and demand, and no individual producer can affect the prices to an extent that is worthy of mention.
The use of contracts between Norwegian producers and overseas buyers is widespread, which probably contributes to increased efficiency and reduced costs in the chain of distribution.
Larsen will present his doctoral thesis entitled “Aspects of Competitiveness in Norwegian Salmon Aquaculture” at the Tromsø University Business School on August 30.
The thesis studies the different aspects of the competitiveness in the Norwegian salmon industry, with the main focus on the setting of prices in the salmon markets.
The various source data from the Directorate of Customs and Excise has played an important part in the doctoral project.
Thomas A. Larsen is 36 years old and grew up at Andenes in Nordland. He completed his Master of Science in 1999 and has worked as a market analyst in the business sector and as a scientist in the academic sector.
He has been employed as a scientist at Nofima in Tromsø since July 1.