When Canada’s lobster processors were unable to obtain the lines of credit they needed to purchase Maine’s annual glut of soft shell lobster because three of the Icelandic banks that financed them had gone into bankruptcy, Maine found itself knee-deep in lobster as the boat price, the price paid to the fishermen who trapped the lobster, dropped to a low of $1.75 per lb.
On Oct. 24, Gov. John Baldacci, in response to calls for help from the Maine Lobstermen’s Association (MLA) issued an executive order forming an eight-person Task Force on the Economic Sustainability of Maine’s Lobster Industry.
Patrice McCarron, MLA executive director, in a phone interview, said one of the criteria for being eligible for the task force is that members cannot earn their living from the lobster industry. In other words, the task force has no fishermen, dealers, processors, poundkeepers, or co-op managers.
The task force consists of chairman Ron Philips, president of Coastal Enterprises, Inc.; co-chair McCarron; Philip Conkling, president of the Island Institute; Dana Dow, former state senator and president of Dow Furniture; Daniel Hildreth, of Diversified Communications; George Lapointe, commissioner, Maine Department of Marine Resources (DMR); James Nimon, of Maine’s Department of Economic and Community Development; and Dane Somers, Maine Lobster Promotion Council executive director. These members will serve without compensation. The DMR staff will provide such help as the task force finds necessary.
Philips reported in a phone interview that the task force held what he called, “a very productive” meeting at the DMR offices in Hallowell in early December. Members had the DMR put together a request for proposal to hire one or more consultants with experience in the food service industry who would conduct an analysis of various strategies based on the SWOT factor: Strengths, Weaknesses, Opportunities, and Threats of and to the lobster industry.
The deadline for proposals was January 20. A maximum of $150,000, from the Maine Lobster Promotion Council’s Lobster Plate Fund, was to be spent on this project.
In response, Maine’s lobster dealers, not understanding that task force members cannot earn their living from the lobster industry, reacted to Baldacci’s task force by calling a meeting of the Maine Import and Export Lobster Dealers Association [MIELDA,] at a Chinese restaurant in Brunswick. Thirty-two dealers from all over the state showed up to voice their opinions. Never had so many dealers attended a meeting, attesting to the gravity of the issue.
William Atwood, of Spruce Head’s Atwood Lobster Co. reported, of the 32-dealer meeting, “Everybody got up in arms.” The dealers’ association sent a letter to the task force. “We requested the task force take notice to contact the dealers’ organization to get first hand information on marketing of the industry,” Atwood said, “Dealers are being very patient waiting to hear from the governor. We do kind of demand some attention because we’ve been marketing lobster worldwide for the last 50 years.”
Asked what he thought about the governor’s task force, Peter McAleney, of Portland’s New Meadows Lobster and president of the Maine Import and Export Lobster Dealers Association, said, “I still can’t figure that out. It’s a waste of money.”
“The lobster industry is not broken,” McAleney said in response to a statement Conkling had made in his November Working Waterfront column (“The Maine lobster business model is broken.”).
“The whole world has a problem, not just the lobster industry,” McAleney said. “That’s pretty nervy to even state that. The problem is, it’s a world commodity market, and the old-timers say the economy of the U.S. goes with the price of the lobster. ‘Watch the stock market’ they used to say. The stock market crashed and so did the lobster market. The lobster industry is not broken. It’s as simple as that.”
McAleney went on, “The idea that those eight guys will try to tell us in four months how to run the lobster industry? That’s a joke.”
Conkling, in a phone interview, explained the reasoning behind the need for a task force, setting out industry-wide, long-standing problems:
“One, Maine’s lobster brand has been weakened by having over 50 percent of the harvest exported to Canada where Maine’s lobster brand is extinguished. Then it is re-imported to the United States as Canadian lobster.
“Two, lack of value-added processing in the state. There are only four [major] processors in Maine.
“Three, the industry is fragmented, there’s no pricing power for harvesters. The question becomes how can the industry get more pricing power in the market?” Conkling stated, “The biggest issue is the fragmentation,” adding that the main question, “is whether people are sufficiently concerned about the deteriorating economics of the industry to embrace the kinds of changes necessary to reduce the fragmentation of the industry. That’s why the governor appointed a task force,” Conkling said, “because nobody knows the answer to that.”