A new Norwegian salmon tax threatens to increases the price of salmon in the UK even further after a range of price hikes over the past month.
Waitrose was the latest retailer to raise the price of salmon fillets this week, up 13% to £5.54 for 260g of Scottish salmon, according to the Grocer’s KVI tracker.
Aldi, Sainsbury’s and Tesco all put their prices of salmon fillets up in January.
Salmon is now on average 38% more expensive across the retailers than this time last year.
Lidl prices have risen most, up 48% meaning its own-label salmon fillets now cost £3.69. Aldi remains the cheapest at £3.59.
Prices have been climbing since September, for both Norwegian and UK produced salmon.
The price of salmon is historically high, said Ibi Idoniboye, Senior fish & seafood analyst at Mintec due to strong demand in Europe. Inflation in fuel, feed, and labour is also having an effect.
On top of rising prices, salmon will soon be affected by a new Norwegian salmon tax, announced last year.
The specifics of how the tax will be calculated have not yet been announced, but the tax will apply to salmon produced since 1 January 2023.
The initial plans were met with “a lot of negative sentiment”, according Idoniboye, and had impacted investment in Norwegian salmon.
The tax will be applied to sea-farmed salmon and was initially proposed at 40%. Analysts now believe a 15%-20% tax rate is more likely
There was controversy over how the tax would be calculated, with the government initially suggesting the price would be based on the NASDAQ salmon index, a weighted average of the spot prices of salmon. This price tends to reflect high-quality salmon whereas many producers operate on contracts with prices below the spot price.
Norway accounts for approximately 50% of annual global output of farmed salmon and is Europe’s largest supplier, which means changes in Norwegian production could have impacts across Europe.
The impact of the Norwegian tax could be felt as early as Q3 or Q4 this year, said Idoniboye.
The tax is bad news for prices but could spell good news for UK salmon producers, who are likely to become more competitive as the supply of cheap salmon is reduced.
“This is absolutely good news for producers in the UK”, said Idoniboye. “UK producers struggle to compete on price with the Norwegians because [Norway] produces far greater economies of scale.”
Salmon had a difficult year last year, with volumes down 8.6% and a value loss of £28.4m.
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