The Seafood Processors of Newfoundland and Labrador Inc. (SPONL) is refusing to buy lobsters from harvesters — again.
This is an almost exact repeat of how the process of setting a minimum price for the crustaceans unfolded last year, says people involved in the industry.
SPONL, which represents 25 processing facilities in the province, issued a news release Wednesday morning stating it could not afford to agree to the price set by the Standing Fish Price Setting Panel so it is refusing to buy lobster.
In the statement executive director George Joyce decried the panel’s decision.
“This is the second year that collective bargaining between the parties has occurred for lobster and the second year of instability in the industry,” said Joyce.
SPONL and the Fish, Food and Allied Workers (FFAW) union had until recently been in negotiations to set the base price of lobster for the upcoming season. But the two groups could not reach an agreement so the dispute was sent to the panel. It subsequently sided with the union and harvesters.
Last year when the two sides could not reach a deal harvesters asked the province to let them sell their catches in the Maritimes. The minister of fisheries at the time indicated he was considering allowing that. But a last-minute deal was reached between the two sides and the season went ahead as planned.
The agreed price last year was $3.65 a pound with both sides having the option to ask for a review on a weekly basis by an independent third party.
Joyce claims that arrangement resulted in significant losses for processors and they’re looking to avoid that outcome this year.
“Companies are not in business to lose money,” he said.
The difference between this year and last year, added Joyce, is during the previous season buyers had already invested money into supplies before negotiations broke down. They felt they had no choice but to eventually agree to the panel’s ruling or risk facing even deeper losses then they did.
This year is different, he said, because buyers haven’t made those investments yet. So they’re on a more stable footing.
But FFAW president Earle Mc-Curdy expressed his doubt at some of Joyce’s statements and specifically he wondered why the group is taking the position it is.
The sticking point between the two organizations is how to properly price lobster.
The union wants the price to be tied to the Urner Barry index out of Boston while SPONL is calling for the formula to be the weighted average daily price multiplied by 95 per cent.
The formula needs to change, said Joyce.
“Unless the formula is changed, the panel’s flawed decision will result in business losses and reduced earnings for harvesters. We are headed down the same path as last year,” said Joyce.
But McCurdy compared SPONL’s preference to going back to the days when there was no set base price for lobster.
He added if need be, harvesters would again search out markets outside the province to ensure they get a fair price.
“If there are buyers here to buy within the pricing system put down by the panel, then let’s get on with it, if there aren’t, then we’ll have to find somebody who will,” he said.
As for whether that will happen — it’s anyone’s guess at this point, he added.
“There’s a couple of weeks between now and the season, so we’ll see what happens.”
Meanwhile, the issue came up in the legislature as well.
In the House of Assembly Wednesday, Fisheries Minister Darin King downplayed the issues, saying he hasn't heard anything is wrong.
NDP fisheries critic Christopher Mitchelmore raised the issue during question period, saying the problem is the processors, and the government should be pushing for a co-op model instead.
King, however, said he wasn't aware of any problem at all.
“The issue the member opposite raises — I have to say that I am not aware that there are significant challenges in the lobster industry at this point in time,” he said.
“It is always difficult when there is fear mongering in the House of Assembly. I am aware that discussions have been had and I am aware that there has been an agreement between the FFAW and the processors on a base price for lobster that will see the season open,” King said.
“I say to the member opposite, if that changes, and I would certainly like him to advise me if I am not already aware, but I am not aware that there are challenges today.”