Fishing Industry Profits Spark Wealth Distribution Debate

fishing in Iceland

Iceland’s largest seafood companies made huge profits last year, if the first published financial statements are any indication, Fréttablaðið reports. Opposition MPs are arguing that the industry should be taxed more so its earnings are more evenly distributed throughout Icelandic society. According to Minister of Fisheries Svandís Svavarsdóttir, the nation sees the industry as unjust, largely because consolidation of fishing quota has funnelled large profits into the hands of very few individuals.

Billions in profits

At the end of 2020, the seafood industry’s equity was evaluated at ISK 325 billion [$2.6 billion; €2.4 billion]. In the same year, the industry paid just under ISK 4.8 billion [$37.7 million; €35.2 million] in quota fees, while the state treasury faced record financial challenges due to the coronavirus pandemic.

The fishing industry has continued to grow despite the pandemic recession. Between 2020 and 2021, the total value of catch in Iceland increased around 9%, from ISK 148.3 billion [$1.2 billion; €1.1 billion] to ISK 162.2 billion [$1.3 billion; €1.2 billion], according to figures from Statistics Iceland. Prospects continue to be good, especially since the price of fish has risen dramatically in the wake of the Russian invasion of Ukraine.

Four companies hold 60% of quota

Just four companies hold around 60% of Iceland’s fishing quota: Samherji, Brim, KS, and Ísfélagið. Brim reported profits of ISK 11.3 billion [$88.8 million; €82.9 million] last year, and Síldarvinnslan’s profits are similar. In the first three months of this year, Síldarvinnslan has made profits of nearly ISK 4 billion [$31.4 million; €29.3 million]. Samherji, Kaupfélag Skagfirðinga (KS), and other fishing industry giants have not yet submitted financial statements from last year, but similarly high profits are expected.

In a column published in Morgunblaðið yesterday, Minister of Fisheries Svandís Svavarsdóttir stated that the nation viewed the consolidation of fishing quota in so few hands as deeply unjust, and that it felt that this collective resource was not distributed fairly.

Fishing money in other sectors

Opposition MP and Social-Democratic Alliance Chairman Logi Einarsson echoed these words. “We have watched a huge accumulation of wealth in very few hands, which has also led to a small number of individuals not only holding the majority of fishing quota, but due to this same wealth, accumulated assets in many parts of society, in unrelated sectors.” Logi named these sectors as the media, real estate, transport, grocery stores, energy, and even insurance and banking.

“This creates a very unhealthy situation,” Logi continued. “And now that the entire public expects worsening livelihoods and various healthcare and welfare services are underfunded, quota holders should certainly pay more toward public expenditure, they are well capable of it, to say the least.”

Iceland’s Top 10% Own 57.5% of Total Net Worth

money

The wealthiest 10% of families in Iceland owned around 57.5% of the total net worth in the country in 2018. The data comes from Statistics Iceland’s annual report on liabilities and assets. The report reveals there was an increase in net worth for all family types from 2017 to 2018.

Total net worth of families was ISK 4.75 trillion ($38.2b/€34.8b) in 2018 and increased by 15.6% from the previous year. However, the increase was less than in 2017 when it was 23% between years. The 10% with the most net worth owned around 57.5% of the total net worth, or ISK 2.73 trillion ($22b/€20b).

Between 2017 and 2018, net worth for individuals increased by 15.6%, married couples without children by 13.8%, married couples with children by 19% and single parents by 25.3%. Net worth between years increased most in the age group of 25-29 years (43.9%) and in the age group of 30-34 years (33.6%).

Debts increase

Total debts were around ISK 2.1 trillion ($17b/€15.5b) at the end of 2018, an increased of 7.6% from the previous year. Total debts of families in the highest 10th decile were around ISK 834 billion ($6.7b/€6.1b) or 39.5% of total debts.

Assets consist of real estate, vehicles, deposits and securities. The report is based on annual tax returns.