Suing over salmon
$1 billion price-fixing lawsuit traced to windfall for '88 catch
Fishermen happily cashed in. But the high prices drove some processors out of business, transforming a broad competitive market for salmon into one dominated by a handful of large processors. And three years later, prices swung the other way - bottoming out at 38 cents a pound, eventually increasing to 70 cents after fishermen sat out part of the season in protest.
"Nothing," Harsila says, "could explain the degree it dropped."
|
|
The class-action lawsuit representing some 4,500 fishermen seeks more than $1 billion in damages.
A handful of defendants already have settled and deposited about $40 million in an account that will be distributed at the conclusion of the trial. But the remaining processors deny the allegations, saying world market conditions, not a conspiracy, lowered prices to fishermen.
Still fighting the case are Trident Seafoods, Wards Cove Packing, Icicle Seafoods, Ocean Beauty Seafoods, Peter Pan Seafoods and Unisea, plus Japanese importers Okaya, Nichirei, Nichiro, and Nippon Suisan Kaisha.
The state court lawsuit has created a schism between participating fishermen and Alaska leaders anxious to unite and revive an industry battered by competition from farmed salmon.
State Sen. Ben Stevens, an Anchorage Republican, former fisherman and chairman of a legislative group looking to assist the industry, is among those defending the processors. He said he detected no collusion when he fished in Bristol Bay. And he contends the salmon industry could be destroyed if fishermen win a big judgment.
Harsila doesn't buy it.
"Perhaps the most corrupt era of doing business would come to an end," Harsila said. "I don't think the salmon business will come to an end."
Bristol Bay is the indentation of shallow ocean water just above the Alaska Peninsula in the state's southwest. Roughly 320 air miles from Anchorage, the bay stretches 250 miles west and opens to the Bering Sea. The communities along its coastline - Dillingham, Naknek, Ugashik, Egigik, and Togiak - are far off the road system.
The bay is a salmon fishery without comparison, the world's largest for sockeye, the succulent fish known as red salmon for the color of their meat. They're a high-fat food doctors encourage people to eat, rich in Omega 3 oils found to lower incidence of heart disease, stroke, diabetes and some types of cancer.
The trial began Feb. 3 and could take three months.
Lacking a "smoking gun" to prove collusion, the fishermen's attorneys have presented circumstantial evidence, including analyses by economists who could be describing a 19th century company town.
Fishermen depend on processors to stake them with loans for boat repairs, insurance and fuel. Most important, processors buy their catch. A Bristol Bay fisherman without a buyer is out of business.
Joshua Greenberg, an assistant professor of resource economics at the University of Alaska Fairbanks and a consultant for the fishermen, said conditions at Bristol Bay provide a huge incentive for processors to collude. The fishermen are tied to the bay, Greenberg said.
Boats are limited in length to 32 feet - a built-in inefficiency designed to spread the catch among more people. To maximize their holding capacity, fisherman use boats that are wide and shallow. The design decreases their speed and maneuverability and makes them inefficient in other fisheries. Eleven months a year, they're stored on land.
Market share for major processors varied little during the years from 1989 to 1995, Greenberg said. Processor executives acknowledge calling their counterparts at other companies but say it was only to see what price they were offering fishermen. Greenberg testified such information already was common knowledge, even broadcast on radio stations, and he could not imagine why company officials needed to confer.
Jeffrey Leitzinger, a Los Angeles economist and expert witness for the fishermen, said a 95-cent-per-pound price drop from the mid-1980s through 1995 was borne mostly by fishermen.
Processors will counter the fishermen's case with their own economists, plus fishermen and prominent Alaskans who did not detect collusion.
Stevens said he has been worked to revive the salmon industry since he was appointed to the Legislature two years ago.
"I know no matter what I do, this has 10 times the impact of what I do, a hundred times the impact," Stevens said of the lawsuit.
News
Share
Shop
Life
Visit























