Abstract Consolidation of the fishing industry worldwide is an issue heavily debated among scholars. Many economists have argued for its necessity, while others – such as sociologists, anthropologists and geographers – have pointed out negative effects of consolidation on fishing communities. The aim of this paper is to measure the geographical consolidation of fishing in Iceland since the introduction of the quota management system in 1984, and during its development into an individual transferable quota system (ITQ). Lorenz curves, Gini calculations and maps are used for this purpose. Consolidation of the fishing sector is a logical outcome of ITQs and the analysis shows that the ITQ system has led to increased geographical consolidation in the demersal and pelagic sectors in Iceland. Regions and communities are unequally affected by geographical consolidation and many small fishing communities are vulnerable to changes in the industry. The results are of value for fisheries management policy formation. When designing fisheries policy for the 21st century it is important to not only consider economic efficiency, but also geographical consolidation and its impact.