With judgment of the Supreme Court of Iceland , which was delivered today, 21 May, overturns the judgment of the Reykjavík District Court, delivered on 19 November 2024, which held that the derogation powers under the Agricultural Produce Act, approved by the Althingi in Act No. 30/2024, had no legal force.
The background to the case is that Innness had demanded that the Competition Authority take action regarding the cooperation and mergers of meat processing plants, which were relying on exemptions from competition law approved by the Althingi in Law No. 30/2024. Innness argued, among other things, that the exemptions had not come into force as the Icelandic Parliament's amendments to the agricultural produce laws were not compatible with the Constitution of Iceland. The Competition Authority rejected Innness's request on the grounds that it was not within its remit to assess the constitutional validity of laws.
Innnes then brought proceedings before the Reykjavík District Court to overturn the aforementioned decision of the Competition Authority. In its judgment on 18 November 2024, the district court concluded that the exemptions in question under the Agricultural Produce Act were inconsistent with the constitution and therefore had no legal force.
Following the district court's judgment, the Competition Authority wrote to meat processing plants and their associations, drawing their attention to the judgment, requesting information and ordering them to cease any measures based on exemption provisions which the district court had ruled had not become legally effective.
Following a review of the grounds of the district court's judgment, the Competition Authority considered it necessary to obtain a final ruling on the issues addressed therein. The Competition Authority obtained permission from the Supreme Court to appeal the Reykjavík District Court's judgment to the court. A judgment has now been delivered.
The Supreme Court's conclusion is based in essence on the fact that the Althingi has a wide discretion to assess when an amendment to a bill constitutes such a fundamental change that it must be treated as a new bill. The handling of the bill that amended the Agricultural Produce Act by the majority of the Althingi did not exceed that scope. However, the judgment does not take a position on whether these changes are beneficial for Icelandic agriculture. The Supreme Court states that it is not its role to review the political judgement that lay behind this amendment to the agricultural laws.
The above conclusion leads to the finding that Act No. 30/2024 has the force of law, unless amended. Furthermore, the Competition Authority's conclusion remains that it is not legally authorised to take action regarding the cooperation and mergers of meat processing plants established under the law's current exemption provisions.
A bill is before the Althingi proposing amendments to the Agricultural Produce Act, which provides for the repeal of the aforementioned exemptions from competition law (see Parliamentary Paper 107 – Item 107). In light of the Supreme Court's judgment, the Competition Authority reiterates the importance of the bill becoming law as soon as possible. As the Competition Authority has argued in detail, anti-competitive mergers and co-operation among meat processing plants can result in irreversible damage for farmers and consumers.
It should be emphasised in this regard that the current exemption powers have no precedent in neighbouring countries. For instance, the supervision of mergers of meat processing plants has repeatedly been used to protect farmers from the power of their counterparts.
For further details, see Opinion of the Competition Authority to the Parliamentary Committee on Economic Affairs, dated 27 March 2025, and Comments to the Ministry of Food (now the Ministry of Fisheries and Agriculture), dated 19 June 2024.
"*" indicates required fields
