The Danish fishmeal industry may be small in a global perspective and some Danish companies generate larger export income for Denmark, but DKK 2 billion surely makes a difference to Denmark’s domestic economy.
The industry employs over 300 people, as well as five times as many fishermen, to which should be added support industries for both vessels and factories.
Production is located in Skagen, Hanstholm and Thyborøn. In all three towns, the factories are among the largest individual workplaces in the area.
For many years, the industry has fought on many fronts and tackled the challenges that presented themselves.
The production capacity has been reduced as a result of declining quotas and today Denmark – unlike its competitors in the UK, Norway and Iceland – has a production capacity that corresponds to the number of vessels and the quotas allocated to Denmark.
Massive investments in a better environment and energy savings:
For many years, increasingly stringent environmental requirements have necessitated investments running into tens of millions of kroner in environmentally correct and energy-saving technology and the Danish factories are at the forefront in this respect internationally.
The industry takes the environmental issue seriously and, in total, over DKK 250 million has been invested in removing dioxin from the products to ensure food safety. In this respect, too, Denmark is in the lead.
Is the intention to phase out the industry?
Denmark is now about to jeopardise all this, if the industry has to contribute towards the future income tax reductions through the introduction of taxes on energy and electricity.
Based on the cost of energy and raw materials in 2008, this will mean an extra bill to TripleNine of more than DKK 11million or approx. DKK 0.04 per kg of raw material. To this should be added the increased tax on waste water discharge, equalling approx. DKK 0.01 per kg of raw material, in total amounting to DKK 15 million per year.
These costs do not apply to our competitors in Scandinavia and South America and as we compete with them globally, we cannot add the taxes to the price of our products.
We can only recover the added taxes from one source, i.e. the fishermen. At today’s settlement prices, DKK 0.05 per kg amounts to more than 5 per cent of the value of the fish.
The fishermen are already struggling to survive and find it difficult to make ends meet, so DKK 0.05 more or less per kg makes a significant difference!
Those who have the option can of course land their catches outside Denmark to get more for the fish.
This will slowly, but surely, phase out the opportunities for continued fishmeal and fish oil production in Denmark.
The fishing industry meets the conditions for being exempted from energy taxes
The political majority behind the income tax reductions have exempted some energy-heavy Danish companies from these taxes on the grounds that they are energy-heavy in accordance with the EU definitions, that they have already made investments so that they are among the best performing companies and that there is a risk that the companies and therefore the jobs will relocate abroad if they are not exempted.
I may be blinkered and subjective, but as far as I can see, the fishmeal industry meets the same conditions. I see no reason why we should not be exempted from these taxes, too.
If the taxes are nonetheless imposed on us, it will also mean that the companies have fewer funds available to invest in further energy-saving technology.
Moreover, it will not benefit the environment if Danish fishermen land their catch abroad.
There is therefore a clear need to reassess the energy taxes on energy-heavy companies – unless of course the intention is to force them abroad!
If that is the agenda, it should be clearly stated instead of slowly suffocating the industry.
Several other energy-heavy companies are in the same situation as TripleNine and have, like TripleNine, raised objections to the bill.
On the basis of these objections, the bill has been returned to the Ministry of Taxation for new calculations and deliberations, so at the moment of writing the nature of the final bill is not known.
