Icelandic Trade and Services Association mulls legal action over meat processing plants law

The Icelandic Trade and Services Association is considering taking legal action over the Icelandic Parliament’s handling of a bill concerning meat processing plants. The association’s lawyer, Benedikt Benediktsston, suggests that the legislation may violate provisions of the European Economic Area (EEA) Agreement.

The legislation in question, which was approved by the Icelandic Parliament in late March, exempts the country’s meat processing plants from competition laws. Consequently, it enabled Kaupfélag Skagfirðinga to acquire a majority stake in Kjarnafæði-Norðlenska, a move that was reported on Sunday.

The Trade and Services Association has been critical of the bill, questioning whether the Parliament has acted lawfully in implementing the changes. They highlight inconsistencies within the new provisions and other provisions of the laws governing agricultural products, and they ask whether the changes are too far-reaching.

The association’s lawyers are examining two primary areas of concern: whether the issue received lawful consideration in Parliament according to the constitution, and whether the bill violates Iceland’s obligations under the EEA Agreement.

Benedikt suggests that they are likely to seek the intervention of the EFTA Surveillance Authority (ESA) in relation to potential breaches of the agreement, rather than file a lawsuit in Iceland. He points out some ambiguity in the legislation, such as what kind of activities will be exempt from competition laws and which service elements they will apply to. He also raises questions about whether the companies will be allowed to collaborate on transportation or the purchase of supplies related to meat production.

The association’s lawyers have been examining the bill for some time, and by the end of the summer, it should be clear whether the issue will go to court and on what legal grounds they will argue their case. Benedikt emphasizes the urgency of resolving the issue, and suggests that it can be expected that there will soon be more mergers or takeovers of companies in this sector.