LOVERS of Scottish salmon could find themselves paying more for the fish if a deal that would create the world’s biggest Atlantic salmon farmer goes through, according to the trading watchdog.

The Office of Fair Trading (OFT) said yesterday that it had referred the proposed €1.3 billion (£903 million) acquisition by Pan Fish, a Norwegian firm, of Marine Harvest to the Competition Commission for a full investigation.

Pan Fish and Marine Harvest already own most of the fish-farming sites on the west coast of Scotland. Vincent Smith, the OFT’s director of competition enforcement, said: “The merger brings together the two largest suppliers of farmed Atlantic salmon in the European Economic Area. The OFT has found that the loss of rivalry between these companies may cause an increase in the price of farmed salmon and thereby harm UK consumers. In addition to this, we found that any effects were likely to be felt more acutely among those consumers having a strong preference for Scottish salmon.”

Pan Fish agreed in March to buy Marine Harvest to form the world’s biggest salmon farmer controlling about a fifth of globally farmed salmon. A second takeover a few months later of the smaller Norwegian rival Fjord Seafood for $750 million (£408 million) lifted its share of global farmed salmon production to 25 per cent.

Competition authorities in the US and Norway have already approved the deal but a Competition Commission referral in the UK will delay any merger for at least six months.

Atle Eide, chief executive of Pan Fish, said that the Commission referral was not a surprise. “It was part of our planning that this might happen but we absolutely disagree with the Office of Fair Trading. There is no evidence that the merger would influence salmon prices in the UK market or any other market,” he said.

Mr Eide added that the company had less than 50 per cent of total salmon production in the world and that salmon also made up only a small part of total seafood consumption in Europe — about 700,000 tonnes out of a total 16 million tonnes.

Michael Foxley, viceconvenor of the Highland Council, said there were fears that the merger might lead to job losses. “It’s inconceivable this would have been allowed to happen in Norway. We are very concerned that we are handing monopolistic control of our agricultural interests over.”

The Scottish industry has lost 1,500 jobs in three years according to recent figures from the Scottish Executive. In 2001-02 the industry employed 10,000 people, but by 2004, the last year for which figures are available, the industry’s employees had plummeted to 8,500.

FEARFUL CALL OF THE WILD

• Many farmed salmon escape and breed with wild salmon. The farmed fish do not have the migratory instinct of their wild counterparts and so diminish the genetic integrity of wild salmon
• Wild salmon fisheries off the coast of Scotland are highly valuable. They attract lucrative tourism and employment. If wild salmon lose some of their migratory instinct they do not go out to sea to feed and then return
• There are fears that farmed fish may introduce diseases to wild salmon that they would be unable to resist

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