Will a Norwegian EU membership be a benefit for Lerøy Seafood Group ASA?

摘要

Lerøy Seafood Group ASA (LSG) is based in Bergen and is one of Norway’s largest exportersof fish. LSG operates companies worldwide, both inside and outside the EU. The companyhas been growing strongly over the last three decades, with revenues up from approximately100 million NOK (Norwegian kroner) in 1980 to 6057 million NOK in 2008. Sales to the EUarea represented 58.2 percent of total sales in 2008. Salmon is LSG’s most important productand represents approximately 70 percent of the company’s total revenues.Norway is member of the EEA agreement, which brings together the 27 EU members and theEFTA countries (excluding Switzerland) in the “Internal Market.” However, the EEAAgreement does not cover the EU’s Common Fisheries and Agriculture Policies, whichimplies that the trade of fish does not move freely. A Norwegian EU membership wouldimply a full entry into the “Internal Market” and a complete removal of all tariffs.The first part of our analysis examines whether tariffs on Norwegian fish exports are animportant trade barrier. The empirical analysis aims at discovering whether the productsthat received a tariff concession in 1993 have increased their EU share of total Norwegianfish exports. Our findings illustrate no significant correlation. There are clear limitations toour study, but this finding indicates that EU membership is likely to have a minor effect withrespect to a removal of tariffs. Other research both supports and opposes our findings, a factthat undeniably illustrates the complexity of this issue.In our discussion, we find that a change in FTA agreements due to a Norwegian EUmembership seems to be of limited importance. Antidumping countermeasures and minimalprices forced by the EU have primarily harmed EU consumers. The industry might havegained an economic rent because of a price markup, but on the other hand, the industrycould also have experienced increased economic risk and prevented a full utilization of itscompetitiveness. Interviews with shareholders indicate few trade limitations, but do indicateunnecessary transaction costs due to minimal prices. Furthermore, the compensation quotasNorway received when former EFTA countries joined EU will to very little extent reduce thepotential gains from tariff removals. EU membership will result in reduced protectionism ofthe agricultural industry and thus cheaper food in Norway. This implies that in the home3market, LSG could face increased competition from cheaper agricultural products, but onethe other hand, LSG could benefit from an increase in consumers’ real purchasing power.If EU membership will change the export structure for Norwegian fish exporters, animportant question is whether LSG will be able to defend or increase its export share.Market dynamics suggest more benefits than drawbacks for a large and experienced fishcompany like LSG. Marketing activities provide little information on how LSG will be affectedby EU membership, but product differentiation may increase.Poland entered the EU in 2004 and went from being a third country with a bilateral tradeagreement with the EFTA to being a part of the EU tariff union. Poland hence became astrategic place to process fish, and it is currently the most important processing country forNorwegian salmon. Ever since Poland’s accession, there has been a steady increase inNorwegian fish exports in terms of both quantity and value.Our thesis does not indicate clear benefits of a Norwegian EU membership for LSG. Theexplanation behind this conclusion is that trade barriers are currently limited, Norway isdominant player in the EU salmon market, and through the EEA agreement, Norwegian fishexporters are already benefitting from free movements on inputs without membership.Turning to the opposite question, whether EU membership will be an overall drawback forLSG, we find few negative aspects.