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Iceland: Icelandic seafood companies may be hit by changes in quota system |
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Monday, 09 August 2010 08:49 |
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A new report on the Iceland Seafood market released by Islandsbanki (available at www.islandsbanki.is/seafood) suggests that government plans to phase out the individually transferable system of fishing quotas could have an impact on industry profitability, says Foodnews. The ITQ system has lead to increasing consolidation of shares of the Icelandic total allowable catch (TAC) in the hands of the top 10 fishing companies, from 24% of the TAC in 1992 to 54% in 2009. The company HB Grandi hf was the biggest single quota holder with 11.1%, followed by Samherji and Brim with 7.6% and 5.4% respectively. According to the report this consolidation has contributed to greater profitability and larger and more diversified companies have been better able to withstand fluctuations in prices and catches. To finance the acquisition of quotas companies have taken on more debt over the last years. The bank’s analysis shows that the companies with the biggest quotas will probably be able to meet their commitments to their creditors. However if the government phases out the ITQ system this could have a negative impact on future revenue growth and profitability, says the bank.
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