"There's been a dramatic decline in market share," Sigmund Bjørgo, China director of the Norwegian Seafood Council, told The Local. "It's gone from 92 per cent in 2010 down to 29 per cent this year."
Norway's salmon industry blames the veterinary regulations China imposed just three months after the Nobel Peace Prize was awarded to dissident writer Liu Xiaobo.
"I won't speculate on the political reasons. We just see that the veterinarian regulations were changed in February 2011, and since then we've seen a huge decline in market share," Bjørgo said.
He said Norwegian salmon was frequently ruined during the long wait for mandatory testing in warehouses at Chinese customs.
"The salmon becomes too old, so its a high risk both for exporter and importer," he said.
As a result, the UK and the Faroe Islands have both overtaken Norway in their share of the Chinese market, pushing the once-dominant country to third place.
Norway now supplies less salmon to China than it did in 2010, despite China's total consumption of the fish increasing at a rate of some 30 percent a year.
Xiaobo, who has called for an end to one-party rule in China, remains in prison in the city of Jinzhou.
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When he was awarded the prize, China blocked all foreign websites reporting it, and lobbied to get 15 countries, including Russia and Saudi Arabia, to boycott the ceremony.
Alf-Helge Aarskog, chief executive of Marine Harvest, on of the country's largest salmon farmers, said companies could not solve the problem without government help.
"It is no secret that declining sales in China are connected to the Nobel Peace Prize," he said. "This is a difficult political situation between Norway and China, and not something that can be solved by the industry."