Sealed bid auction proposed for remaining salmon licenses

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The Norwegian Ministry of Trade, Industry and Fisheries (MTIF) has proposed that the salmon production licenses remaining after the auction in June should be sold through a sealed bid auction.

“In June we conducted a successful auction of new salmon production licenses. Almost all the licenses were sold at record-high prices. Only a handful of licenses remain, but our ambition is to achieve the broadest distribution of growth. Therefore, we are now proposing a new arrangement for selling these licenses,” said the Minister of Fisheries Per Sandberg in a press release.

Auctioning of the new salmon licenses took place in June. 14 salmon producers won bids to buy new salmon licenses for a total of NOK 2.9 billion. This accounted for the sale of around 97 percent of the licenses put up for auction.

The Ministry of Trade, Industry and Fisheries’ proposal on how the remainder of the licenses are to be sold will be sent out for public comment prior to a hearing. Forslaget sendes ut på høring.

“We propose that the remainder of the licenses are sold through a new auction. The licenses are assembled in smaller packages, and bidders are given the opportunity to bid on each package through a sealed bid auction,” said Sandberg.

This is a technically simple format that producers will be familiar with from the allocation round in 2013. The deadline for submission of public comments is Thursday, 16th August.

In October 2017, the government implemented a brand new system for growth in the aquaculture industry. The traffic light system is designed to facilitate responsible and predictable growth. The Norwegian coast is divided into thirteen coloured zones. The colour is based on the extent to which the zone is challenged by salmon lice. Green areas are permitted to grow by six percent.

Salmon licenses permit the producer to have a certain tonnage of farmed fish in their marine farm pens, which is stated in maximum allowable biomass (MAB).

Prior to the main auction held 18-20 June, there were around 15,000 tonnes MAB up for sale. 414 tonnes MTB remain to be sold through distribution among six different areas of production.

The MTIF proposal for the hearing is that the remainder is sold at auction through a sealed bid round, as eight different licenses:

License no. Area of production Size of license in tonnes MAB
1 1 16
2 7 100
3 7 45
4 8 100
5 8 100
6 10 40
7 11 2
8 12 11