Shipping Collusion Cost Icelandic Society ISK 62 Billion

Eimskip Dettifoss

The illegal collusion between Icelandic shipping companies Samskip and Eimskip cost Icelandic society nearly ISK 62 billion [$452 million, €416 million], according to a newly-published analysis. Eimskip has paid an ISK 1.5 billion settlement for the violations, while Samskip has appealed an ISK 4.2 billion fine it has been ordered to pay. The violations have been called “a costly and terrible attack on consumers, which must not be repeated” by Chairman of the Consumers’ Association of Iceland Breki Karlsson.

Costly for Iceland’s economy

“These numbers shed light on how costly competition violations can prove to be for the Icelandic economy,” stated Ólafur Stephensen, CEO of the Icelandic Federation of Trade in a press release. “It is important to have effective competition monitoring, which uncovers such violations, as well as for the consequences of such competition violations to be such that they deter companies from such actions,” Ólafur added.

“By colluding with each other, the shipping companies showed complete disrespected to workers and consumers in Iceland, and now we see what it cost society,” VR Union Chairman Ragnar Þór Ingólfsson stated. The report by Analytica was commissioned by the Icelandic Federation of Trade, the Consumers’ Association of Iceland, and VR Union.

Eight-year investigation

The illegal collusion between the companies occurred between 2008 and 2013, and included violations such as sharing sensitive pricing and business information and limiting transport capacity. The Competition Authority’s investigation into the matter was the most extensive in its history, lasting eight years in total. Of the ISK 62 billion the collusion cost Icelandic society, ISK 26 billion can be directly attributed to increases in the shipping companies’ tariffs beyond general price levels.

Impacted mortgage fees

Besides higher costs for consumers and Icelandic businesses, the collusion also had wider impacts on the Icelandic economy. The consumer price index rose 0.7% above what would have been expected if the companies’ tariffs had remained unchanged in real terms. This, in turn, meant that borrowers of indexed loans paid an extra ISK 17.4 billion [$127 million, €117 million] due to the collusion, a figure the report’s authors call a conservative estimate. The collusion also raised prices for companies in export, transport brokerage, and land transport within Iceland.

An international anomaly

The analysis notes that during the time the collusion took place, fees of shipping companies in neighbouring countries decreased, while those of Samskip and Eimskip were raised significantly. The performance of the two Icelandic shipping companies was also much better than leading foreign shipping companies during the same period.

State of Competition in Iceland “Grave” Says Regulator

Alþingi parliament of Iceland

The Icelandic Competition Authority is not equipped to perform core duties due to budget cuts, according to its leadership. Funding has decreased by 20 percent in the last decade, while economic activity in the country has increased by around 40 percent.

As Alþingi, the Icelandic parliament, debates a 2024 budget proposal, the Authority has submitted a comment on the state of its funding, calling the competition situation “grave”, Heimildin reports. The comment is signed by chairman Sveinn Agnarsson and director Páll Gunnar Pálsson. They warn that due to insufficient funding, the Authority can’t carry out its responsibilities according to law. As a result, they’ve had to prioritise and let important categories fall by the wayside. Despite a significant growth in the economy, the Authority now employs fewer people than it did in 2014, while its budget has not kept up with rising costs and wages. “At the same time, important new tasks have been added, while demands have increased, for example regarding the investigation of mergers,” they write. “These developments have gone beyond our tolerance limit.”

Lack of competition damaging to small economies

The Competition Authority goes on to argue that cutbacks to its budget are inconsistent with the reality that competition in many important Icelandic markets is lacking. The Authority has concluded many investigations that support this, many of whom have been confirmed by court rulings. Such hindrances to competition can be especially damaging in small economies like Iceland’s. Promoting competition would be the right response to the current economic situation, the Authority argues, with inflation at 8 percent. “In many of our neighbouring countries, governments have made efforts to strengthen antitrust authorities,” is stated in the comment.

In the wake of the 2008 financial crash, the interconnectedness of the Icelandic business sector became all too apparent. The Iceland’s Competition Authority subsequently warned of threats to future competition as corporate debt was being restructured and the economy slowly recovered. In the years since, the Authority has intervened in a number of cases, including in the fishing industry and the air travel sector.

14 Pilots Exit Play for Icelandair Amid Global Talent Scramble

iceland budget airline play

Fourteen pilots from budget airline Play have resigned to join competitor Icelandair amid a global pilot shortage and rising wages. While acknowledging the challenge of retaining pilots, Play insists that the departures won’t impact operations and emphasizes its ongoing efforts to offer competitive salaries and benefits.

Hiring and retaining pilots a challenge

Fourteen pilots from budget airline Play have tendered their resignations after receiving job offers from industry competitor Icelandair, according to a press release from Play this morning, Vísir reports. The airline highlights a global shortage and fierce competition for qualified pilots, acknowledging that this has inflated salaries and complicated recruitment efforts.

‘Earlier this summer, it became apparent that rising wages due to competition would make it challenging to hire and retain pilots. As a result, we initiated an internal review of our pilot salaries and working conditions,” the press release noted.

Yesterday, news broke that Icelandair approached Play’s pilots with swift job offers, compelling them to make immediate decisions. “PLAY was not privy to the details of the offers due to the customary confidentiality between parties, but we received 14 resignations from pilots yesterday. While it’s always painful to lose valued team members, these departures will not significantly impact our operations or flight schedules,” the press release added.

Vísir reported yesterday that 18 pilots from Play were directly approached by Icelandair. In response, Play convened a meeting with these pilots on Wednesday evening.

According to, Play pilots earn a base salary of ISK 590,000 ($4,500 / €4,200), significantly lower than Icelandair’s ISK 860,000 ($6,500 / €6,000); Play subsequently offered their pilots a substantial salary increase yesterday, Vísir reports.

Complex factors in wage dynamics

In its press release, Play emphasised that pilot compensation is multifaceted and not easily comparable to other professions. “Recent reports, which are baseless, suggest this will dramatically affect our cost structure … but the impact on unit costs is negligible,” the press release clarified.

Play also took the opportunity to underscore its consistent efforts to improve employee compensation and conditions, extending beyond pilots to include flight attendants and other staff. “We would not have been able to retain our workforce if our packages were egregiously uncompetitive, as is sometimes insinuated,” the release noted.

The airline touted its role in generating approximately 550 new jobs in Iceland’s labour market within just over two years, and its contribution to reviving tourism and reducing travel costs. “Moving forward, Play is committed to offering competitive conditions to attract and retain top-tier talent as we build a company of which we can all be proud,” the statement concluded.

Urban Design Contest Envisions a Carbon-Neutral, Car-Free Future

The City of Reykjavík has launched an open design competition to “create a dense, mixed, diverse, and carbon-neutral new urban quarter” in Keldur, an underdeveloped area on the eastern outskirts of Reykjavík. Streetsblog reports that the contest, which will accept submissions until mid-April, is open to anyone—not just professional designers and urban planners—and will be judged anonymously by a team of local officials and international expert advisors.

The finalists from the first round of the competition will receive €50,000 [$53,582; ISK 7.7 million]. The final winner will receive an additional €50,000.

Where is Keldur?

Sandwiched between the neighbourhoods of Grafarvogur, Úlfarsárdalur, Grafarholt, Halsar, and Höfðar, the 288-acre parcel that, according to the Keldur Competition Brief, city officials are dividing into Keldur East and Keldur West, is a 30-minute bike ride away from downtown.

via Keldur Competition Brief

The area is currently served by four bus routes “with stops in the vicinity” but once the city unveils its new bus route and the first phase of the Borgarlína Rapid Transit (BRT) service in 2026-27, Keldur will have much more direct public transportation options to and from the city centre. Officials estimate that travel time on the BRT from Keldur and Lækjartorg will be approximately 20 minutes.

‘Against excessive parking’

While the building of a new residential community on the outskirts of a city might naturally imply high car ownership, “officials are are recommending against excessive parking,” explains Streetblog, and have “already promised to devote 100% of the profits from the development and sale of the land towards bringing frequent bus rapid transit service to residents. More broadly, the contest organizers called on entrants to ‘prioritize the eco-friendliest, most compact, and least cumbersome mode of transportation’ in their designs.”

Brad Toderian, one of the international experts serving on the Keldur competition’s judging panel, applauds the City of Reykjavík’s focus on creating “a truly urban place, not just a better suburb,” one that is “not just a little less car dependent, but that’s truly multimodal.” Toderian says that from a North American perspective, the competition is unique not only in that it accepts submissions from anyone, but also because “it’s more ambitious than North America is usually willing to be in these kinds of contexts.”

Cycle city

In addition to linking to the BRT, the Keldur neighborhood is intended to attract cyclists and encourage two-wheeled transit. The contest brief particularly emphasizes the “importance of integrating the region into the city’s ambitious Cycling plan — the city wants 10% of all trips to be taken on two wheels by 2025 — creating reliable pedestrian connections to surrounding areas, and making sure residents can meet their basic needs with a twenty minute walk or less.”

“BRT has a prime role to play,” says Toderian, “but it’s also about walkability and bikeability; it’s about carbon neutrality; it’s about green building design.”

Read the full Streetsblog article, in English, here. The Keldur Contest Brief (also in English), with information about how to submit a design proposal is available here. Queries about phase one of the project will be accepted until March 17, 2023; submissions will be accepted until April 19, 2023.

Sailing Competitors Seek Safe Harbour in East Iceland

Twenty-three of the competitors in France’s Vendée Artique sailing competition are seeking shelter in Fákrúðsfjörður Bay in East Iceland due to dangerous weather conditions on the Atlantic Ocean, RÚV reports. This is the first time that skippers participating in the race were supposed to have crossed the Arctic Circle north of Iceland, but given the current weather conditions on the course, race organizers have elected to end the race in Fákrúðsfjörður.

Three of the skippers had already arrived in Fáskrúðsfjörður as of Friday night, with the rest expected in the early hours of Saturday morning. Roughly a third of the sailboats were known to have been damaged in the difficult weather on the way to Iceland, where the East Iceland Sailing Club was preparing to receive them.

Route designed to be difficult

Vendée Artique Course 2022

The newly-extended 3,500-nautical-mile Vendée Artique begins and ends in Les Sables d’Olonne in France and circumnavigates Iceland. It is the first qualifying race for the Vendée Globe, a single-handed, non-stop, round-the-world yacht race. As it is intended to help participating skippers test their boats and get a feel for the Vendée Globe, the course was designed to be difficult, with purposefully difficult weather conditions. Sailing from north to south “is a particular technical exercise,” explains the competition website, “requiring numerous manoeuvres and sail changes […] when rounding Iceland.”


Siglingaklúbbur Austurlands, FB

In its explanation for why the race was suspended, the organizers wrote that “a low pressure system is threatening the fleet. The skippers are likely to face tough conditions and the back of the fleet already have more than 40kts at times and gusts to 60kts.” Given the fact that the race “is quite isolated,” there was also the additional risk that rescue would be complicated in the event it was necessary.

The next Vendée Globe will take place in 2024; in order to be entered in the race, skippers must take place in at least two of five qualifying races. The next qualifying race is the Route du Rhum in November, which sales from Saint Malo, in Brittany, France, to Pointe-á-Pitre, Guadelopue.

Five Icelanders Compete in 2022 Winter Olympics

Hólmfríður Dóra Friðgeirsdóttir and Erla Ásgeirsdóttir Beijing 2022

The Beijing Winter Olympics begin today, and five Icelanders are among the competitors. They are Hólmfríður Dóra Friðgeirsdóttir, Isak Stianson Pedersen, Kristrún Guðnadóttir, Snorri Einarsson, and Sturla Snær Snorrason. Two will be competing in their first Olympic games.

Hólmfríður is competing in women’s Alpine skiing, in the slalom, giant slalom, and Super-G events. Kristrún will compete in cross-country skiing, in the women’s sprint freestyle event. Snorri will compete in the 15km cross-country skiing event, Men’s 15km+15km Skiathlon, the 50km mass start freestyle event, and the Men’s Team Sprint Classic event. Isak will compete in the cross-country sprint and the Team Sprint Classic events.

Sturla Snær, Snorri, and Isak all competed in the 2018 Winter Olympics in PyeongChang. Holmfríður and Kristrún will be competing in the Olympics for the first time. Kristrún and Sturla Snær will be Iceland’s flagbearers at the opening ceremony today.

Iceland European Champion in Group Gymnastics

Icelandic gymnastics national team

Iceland became the European group gymnastics champion in Portugal on Saturday when the women’s team won gold with a score of 57,250 points, narrowly beating the Swedish team. The team won the competition’s highest score in floor exercises in the women’s category with 22,300 points.

This was the first year Iceland also sent a men’s team to the competition, and they took home silver medals for their performance. The Icelandic youth team also won silver and bronze in the competition.

Björn Björnsson, one of the team’s coaches, told RÚV he hopes the men’s silver award encourages young men to train in gymnastics. “I think it can do nothing but increase the number of great boys in gymnastics. The next competition is coming up, in nine months, and we need more great boys.”

Wordsmiths Compete at National Scrabble Championship

Iceland’s most zealous scrabble players gather together this weekend to compete at the National Scrabble Championship, RÚV reports. The Championship has been organised yearly by the Iceland Scrabble Association (Skraflfélag Íslands) since 2013. Scrabble, or Skrafl as it is known in Icelandic, has been gaining popularity since the advent of an online version in Icelandic.

Many of this year’s competitors have honed their skills playing scrabble online on a website created by 2015 Championship winner Vilhjálmur Þorsteinsson. Since its creation in 2014, the site has amassed over 16,000 registered players, thousands of whom play daily.

The Championship hit a participation record this year, with 24 competitors vying for the title of Iceland’s best scrabble player. Participants compete in ten rounds over two days this weekend – the player who has the most points after all the rounds are completed is crowned national champion.

The board game’s devotees don’t always agree on the validity of a word. When a competitor challenges their opponent, the tournament organiser is called over to look up the word in a dictionary. If no entry is found, the next step is to call a judge, working remotely, who makes the final call. According to Hildur Lilliendahl Viggósdóttir, the Scrabble Association’s chairperson, disagreement was quite a common occurrence yesterday.

“I haven’t seen anything like today. A judge is being called every few minutes,” Hildur told reporters. “There is a queue for the judge and fights are about the break out here.”

When asked about the skills that make for a superior scrabble player, Hildur stated: “It helps to have good Icelandic skills, then cleverness is also an good advantage, and being quick to think and act.”

Says Supermarket Collusion Keeps Prices High

Silent consultation between low-cost retailers in Iceland keeps prices artificially inflated, says Auður Ava Ólafsdóttir, project manager of price oversight at the Icelandic Confederation of Labour. Supermarkets Bónus and Krónan take advantage of a small market to keep prices high when they could be lowered, Auður stated in an interview on RÚV morning radio today.

“These two parties are in a very similar place in terms of prices and they naturally only see it in their favour to keep prices in a certain place,” stated Auður. “Although these are low-cost retailers in Iceland they could actually be lowering prices more than they are.”

“There is leeway here in Iceland for price reductions, as we saw when Costco came to the country. It’s cheap to import goods and the króna is strong. There are many factors that should have the effect of reducing prices, yet prices have remained quite stable for many years.”

This is because Krónan and Bónus take advantage of the Icelandic market’s lack of competition, Auður says. “They’re careful not to compete with each other’s prices too much because both parties would lose out. It is to the economic advantage of both to have it that way and they can do it by virtue of their strong position.”

Auður says she hoped Costco’s opening in May of last year would lower prices over the long term, but the wholesale retailer’s effect seems to have been temporary. Prices “took a little dip until they opened and into the fall and then rose again and are back to a similar level as before.”

Guðmundur Marteinsson, Bónus’ CEO, says the small price difference between products at Bónus and Krónan can be attributed to both companies lowering prices as much as possible. “There is no leeway for price reduction,” he stated. “We cannot sell products at below cost.” He pointed out that Costco’s recently published annual financial statement showed a loss of ISK 100 million ($900,000/€780,000).

Gréta Margrét Grétarsdóttir, CFO of Festi, also denies the two retailers are artificially inflating prices, insisting the similarity in price between the stores is a result of active competition rather than consultation.

“If you’re brave enough to touch a sheep, you can compete”

The 16th annual Ram Inspecting Competition took place last weekend at the Sheep Farming Museum in the Westfjords, RÚV reports. The roughly 50 competitors were separated into two categories: experienced ram inspectors and “inexperienced and scared” ram inspectors. Ragnar Bragason from Heydalsá emerged as the Icelandic champion.

But what exatly is ram inspecting? Called hrútaþukl in Icelandic, the practice is one of the ways farmers determine which rams to use for breeding in the coming winter. Hrútaþukl essentially consists in a hands-on inspection of rams to assess their physical prowess.

At the Ram Inspecting Competition, a jury selected four rams and assigned them points based on factors like leg length and muscle size. Competitors then assessed the rams according to a system used by farmers, aiming to reach the same conclusion as the jury. Competitors in the inexperienced group simply had to rank the animals.

The competition is open to all, said jury member Sigríður Ólafsdóttir. “If you’re brave enough to touch a sheep, you can compete.” Sigríður said competition was close in the inexperienced group, as many competitors ranked the rams in the correct order. The tied competitors then had to explain their decision and were judged both on their reasoning and how entertaining their explanations were. Sigríður recounted that one year, a competitor won the inexperienced group without touching a single ram. He ranked the animals in the correct order, then wrote and recited an ode to each one.