SEA-NL asks Premier for independent review of price-setting system; anti-competitive behaviour
The following letter was sent to Premier Andrew Furey earlier this afternoon (Sept. 6, 2023):
The inshore fleet of Baie de Verde.
Dear Premier,
I write to you on behalf of licensed inshore owner-operators to urge you to order an independent investigation of this province’s failed fish price-setting system — including widespread accusations of anti-completive and punitive behaviour by the processing sector against the inshore fleet.
The landed value of Newfoundland and Labrador’s 2023 snow crab fishery (the world’s largest) stands at $258 million — roughly $500 million less than 2022 — and while seafood markets around the world are beyond our control, the pricing system is solely in the hands of the provincial government.
That legislated system stands in place of a free and open market, and, as such, the province has a duty to ensure the mechanism is in place to deliver a fair market return to the inshore fleet.
However, the 2023 season confirms inshore enterprise owners are not receiving a fair market return from the final-offer selection model of fish pricing.
Further, there’s evidence the processing sector is controlling inshore harvesters as much or more today than fish merchants ever did, and misusing government-issued licences to punish owner-operators who speak out publicly.
To be frank, Mr. Premier, the provincial government is not the solution to the problem with fish pricing — the province is the problem.
That is why SEA-NL also urges that an investigation be sweeping in scope, conducted by an independent third party, and include public meetings with owner-operators on every coast.
Seafood prices dictated by the panel this year and in 2022 failed to get commercial fisheries up and running, often for weeks, leading to industry chaos with fleets either refusing to fish for panel-set prices or processors refusing to buy.
This year’s snow crab fishery was delayed seven weeks when the inshore fleet refused to fish for the panel-set price of $2.20/lb that even the panel warned was not the “correct” price.
In the case of lobster — the province’s second most valuable fishery after snow crab — the price is set by a long-standing agreed-to formula that the panel reiterated again this year may be obsolete.
The formula pays fishermen as if their catch is being sold soon after it’s caught when the lobster may be kept in holding tanks and sold later for higher prices.
The response of Barnard Davis, minister responsible for Labour, to a SEA-NL request earlier this year tor a review of the lobster-pricing formula was to say he would take it under advisement.
With respect, Mr. Premier, that’s unacceptable.
Again, the province has a duty to ensure a fair market return to the inshore fleet by virtue of the fact it controls the pricing system.
In the case of northern shrimp, the province’s third largest fishery, that fishery was last reviewed by the province 21 years ago, and basic seasonal yield rates are not even up to date.
Ultimately, a fair market return to the inshore fleet has yet to be defined, but if the bar is set at even 50% the inshore fleet is underpaid for most species.
In August, SEA-NL compared DFO’s landed-value data with NL seafood prices on the Urner Barry seafood index and found the inshore fleet has a 9% share of the U.S. market price for cod; 29% share of the snow crab price (a huge drop from 2022’s 51% share); 43% share of the halibut price; and 58% of lobster.
Despite repeated calls for fish prices to be based on actual market receipts, processors and buyers have refused to hand them over, and the province has, to date, refused to make them.
From SEA-NL’s perspective, any pricing system that does not include actual market receipts is open to manipulation —and especially so with limited competition.
The province ordered a review of the pricing system following the 2022 season, but the three-month exercise essentially recommended the status quo, as advised by the union and processors.
Once the snow crab fishery finally got underway this year the inshore fleet faced trip limits and fishing schedules that jeopardized safety and were often seen as being used like a stick to punish inshore boats (particularly smaller ones) blamed for the tie-up.
According to the media, the union and processors are set to meet this month to discuss 2024 fish prices, but Mr. Premier it is imperative that your government call an independent, third-party review as soon as possible and include public hearings.
Inshore enterprise owners have been “punished” in recent weeks by processors/buyers who refuse to buy their fish for comments published on social media and expressed on call-in radio.
Complaints are also once again rampant of processors/buyers refusing to buy cod from owner-operators who sold their crab to another company.
Those action cannot be condoned, and from SEA-NL’s perspective should result in a fine or loss of the processor’s/buyer’s licence.
Owner-operators in this province have complained for years that they cannot move freely between buyers/processors, and companies have been accused of operating as a cartel to keep prices down and the inshore boats controlled.
As you are probably aware, Mr. Premier, fish pricing in this province is excluded from the federal Competition Act, which is another serious cause for concern from the inshore fleet’s perspective in terms of standing in the way of a fair market return.
SEA-NL was disappointed with your refusal to meet with our organization, and then forward our request to the minister of Fisheries, Forestry, and Agriculture when fish pricing falls under Labour.
To summarize, Mr. Premier, it is incumbent on the provincial government that controls the fish price-setting system to ensure the inshore fleet receives a fair market return from the sale of their fish, and action must be immediate when indications are that is not happening.
It is in that light that SEA-NL formally requests an independent third-party investigation and province-wide public hearings as soon as possible this fall.
Yours,
Ryan Cleary,
Executive Director, SEA-NL
Seaward Enterprises Association of Newfoundland and Labrador (SEA-NL) is a professional, non-profit organization that serves as the distinct voice for licensed, independent owner-operator inshore fish harvesters. Visit sea-nl.ca to join. Contact me at sea-nl@outlook.com or 709 682 4862.