Bakkafrost's headquarters and processing facility at Glyvrar in the Faroes.

140 jobs go at Bakkafrost processing facility

Salmon farmer blames extra tax for redundancies

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Salmon farmer Bakkafrost is making 140 of its employees in value added product-related areas in the Faroes redundant.

It says the Faroese government’s decision in May to increase the top rate of a revenue tax on the sector from 5% to 20% is the reason for the move.

“As a result of changes in the Faroese revenue tax, Bakkafrost has adjusted the strategy for contracted VAP to reduce contract exposure for 2024,” said Bakkafrost, which made operating profit of DKK 770 million (£90m) in the first nine months of this year, 59% less than the DKK 1.879 billion made in the same period last year.

For 2024, Bakkafrost has signed contracts covering around 9% of the expected harvest volumes in the Faroe Islands and Scotland combined, compared to 22% at same time last year.

Conditions have changed

It said that over the last couple of months it had “a reasonable hope” that new political changes would be made in the Faroese revenue tax, but this has not transpired.

“We hoped that we could agree a sufficient amount of long-term contracts, so we could keep all our employees. But the conditions have changed, especially since the new revenue tax has been implemented,” said chief executive Regin Jacobsen.

“We had also hoped that new political changes would come in time as promised, but unfortunately we were let down.”

Bakkafrost’s VAP processing in the Faroes takes place at the company’s headquarters at Glyvrar.