Legislature(1995 - 1996)
03/20/1996 03:40 PM Senate RES
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SB 255 PROMOTION BY SEAFOOD MARKETING INSTITUTE
CHAIRMAN LEMAN brought SB 255 before the committee as the next
order of business.
SENATOR AL ADAMS , prime sponsor of SB 255, explained the
legislation amends the current status governing the Alaska Seafood
Marketing Institute (ASMI) by allowing the institute to promote
Alaska seafood on a regional basis. Currently, seafood promotion
must be generic and statewide such as Alaska salmon, Alaska
sockeye. The bill will amend AS 16.51.110 to allow ASMI to promote
seafood by regional basis such as Yukon kings, the Arctic Circle
chums, or the Copper River reds.
Senator Adams said the existing framework for marketing salmon
produced in Alaska waters assumes that generic product promotions
will increase overall sales thereby providing benefits to fishermen
from all regions of the state. While this works to some extent and
may be necessarily part of the overall marketing program, regional
disparities in the cost of production and transportation requires
that in certain areas niche marketing efforts should be undertaken.
Promotion by brand names will be still be prohibited.
Senator Adams pointed out that the bill carries a zero fiscal note
and there will be no funds taken from ASMI, however, in order to
fund niche promotions, he said he would like to try to find some
other funds from other agencies that are willing to help in niche
marketing through the reappropriation method.
Senator Adams also pointed out that the change in law is
permissive; it does not require ASMI to do anything new.
TAPE 96-33, SIDE B
Number 001
Number 040
DAN ALBRECHT , Executive Director, Yukon River Drainage Fisheries
Association, said the association represents both the Lower Yukon
gillnet fleet and fish wheel and set net fishermen in the Upper
Yukon. He said SB 255 represents an initial attempt to address a
problem that perhaps was unforeseen several years when ASMI was
created, which is a glut on the market and many fish species being
priced out of the market. This has hit the AYK region especially
hard because their fish come out of remote areas and salmon is
their only fishery. They are in a situation now where their chums
are priced out of the market and many other species are as well.
Generic marketing by ASMI doesn't really help them; their fish are
always going to cost more than a fish from other parts of the state
because it's got to come the farthest distance, so they need to be
able to develop markets that will pay that price. He suggested
each region could have its particular fish described for the uses
that it's most appropriate for.
Number 100
HENRY MITCHELL , testifying from Anchorage, said he has been
involved for many years with trying to develop some small scale
fisheries and doing some preliminary niche marketing on behalf of
some of the fishermen in Western Alaska. It was determined a
number of years ago that the best possible approach would be to
allow ASMI to do that type of intensive niche marketing so that the
people, like those in Western Alaska who were experiencing
difficulties, could have that little bit of extra effort paid to
their product to assist in developing a standing in the
marketplace. He noted the Bering Sea Fishermens' Association did
two marketing projects in 1993 and 1994, and they found that on the
east coast the chum salmon products and the coho salmon products
from Western Alaska were rated as superior products, but in order
for the program to be successful, there needs to be an ongoing
program. In addition, there needs to be a mechanism that evolves
that provides the availability of these products on a year-round
basis.
Number 130
JUDE HENZLER , representing the Bering Sea Fishermens' Association
and testifying from Anchorage, pointed out that at the present time
the chum market is primarily July 4 and before, but the chums in
their area arrive July 4 and after. He also said the association
believes that if the public could be educated to the quality of
their chum salmon, it would help that market and ultimately help
everybody's chum market.
Number 145
JEFF STEPHANS , representing United Fishermens' Marketing
Association and testifying from Kodiak, stated their strong support
for the work ASMI does, it has done in the past, and intends to do
in the future with regard to marketing Alaska salmon. He observed
that without ASMI the situation would be much more complex than it
is now. Speaking to SB 247, he said their association is a little
reticent to support this type of approach, and they believe it is
a topic that needs to have a little more discussion or
investigation. He said ASMI already has a very complex task before
it given the current situation of the salmon supply in the world,
and requiring ASMI to get involved in niche marketing really opens
up a tremendous sweep of complex decisions and possibly some
controversies that would be very difficult to deal with.
Number 195
SENATOR HOFFMAN commented that Senator Adams is not asking or
requiring ASMI to start niche marketing. It's basically allowing
that to happen, and if they can identify sources of funds, they can
start assisting an area that is not allowed to sell salmon
presently. He said he is sure that if Kodiak did not have a market
to sell their fish, they would be asking the same. He stressed the
importance of looking farther into the future and pursuing such
ideas as this, otherwise, if too much time passes, it may be too
late. MR. STEPHANS said he understood what Senator Hoffman was
saying and he supports the idea, but he thinks given the structure
of ASMI and the obvious discussions that would take place within
the organization, the whole concept could be pursued and forwarded
quicker if some type of niche marketing program were established in
DCRA or DCED, etc.
Number 250
VIRGIL UMPHENOUR , a member of the Board of Fish testifying from
Fairbanks, said the fishermen in the Bristol Bay and AYK regions
are very unhappy about ASMI and its one percent assessment, and
they feel that ASMI does absolutely nothing for them. He said that
in his opinion, niche marketing should be done because the only
thing ASMI basically has promoted is king salmon, king crab,
halibut, and a little bit of pollock, and they need to be
advertising and promoting chum salmon and sockeye salmon. He noted
currently AYK has a zero market for chum salmon for the upcoming
season. He also said fishermen from all over the state, even the
fishermen in southeast, are really concerned about the prices of
fish, and no one knows what's going to happen this coming fishing
season. He emphasized there needs to be innovative niche
marketing.
Number 310
ART SCHEUNEMANN , Executive Director, Alaska Seafood Marketing
Institute, said ASMI has gone through a number of positive changes
and transition in the last two years, and they are attempting
through a fairly active instate PR communications program to carry
that message to a wide range of fishermen and processors who are
the benefactors of their programs. He admitted there are people
who are unhappy because their products aren't being promoted in the
marketplace. He said a category marketing organization has to stay
on a focus, and with a strategy that has been developed in the last
two years, they have seen significant growth and consumer awareness
in purchases and intent to purchase of Alaska salmon in all
categories of the seafood.
Mr. Scheunemann said ASMI, with its programs, would like to see the
salmon in Alaska beyond the king in the domestic marketplace, which
is a major focus of their efforts at this point in time, but ASMI
doesn't control the supply and distribution and the decision making
in terms of that part of the business structure. However, ASMI has
been working actively with the fishermen, the processors, etc., to
find ways to get dedicated commitments to the domestic marketplace
for those species. They have been providing active, aggressive
promotional programs that retailers and food service operators and
distributors can utilize to build value in their marketplace, as
well as going through a major educational program with their chef
and training at the retail level on how to utilize, handle and to
merchandise Alaska salmon.
Mr. Scheunemann said the ASMI Board of Directors discussed this
legislation at their recent board meeting in February and took no
official position on it. However, they do have a concern about
changing the statute because they believe that could lend to the
competition of competing regions and interests and species against
each other, which would push ASMI off of its strategy in a number
of different directions and essentially make ASMI the marketing
department for each one of these areas. He added that does not
mean ASMI does not recognize the need for creative niche marketing.
He has had some experience with working with direct marketing and
niche marketing and he knows it works, but whether ASMI is the
right vehicle to make it work is another question.
Mr. Scheunemann said he believes this is a larger economic issue
under which marketing is one part of the solution, but it may not
be the only solution, and it may not be the successful solution
unless the other issues are addressed as well. ASMI believes it is
necessary that there be a organized logical approach, and they
stand ready to provide as much and whatever appropriate assistance
they can, but they have concern in terms of changing the statute.
Number 420
SENATOR HOFFMAN commented that it appears that ASMI is doing
nothing on chums and reds, and by excluding those two species of
salmon, ASMI is doing anti-niche marketing to those two products.
If, in fact, all of the millions of dollars that are being spent to
no avail of Bristol Bay and AYK, those people are being extremely
hurt by what ASMI is presently doing.
MR. SCHEUNEMANN pointed out that the decisions in terms of product
are made between the processor, distributor, broker, and the retail
chain. ASMI is prohibited in getting involved in deciding which
products are bought and sold. However, he also pointed out that
there has been a significant consumer response to properly handled,
properly demonstrated, properly merchandised chum salmon. This
hasn't been done with Bristol Bay sockeye because there aren't any
Bristol Bay sockeye in the marketplace, but ASMI does not control
that decision making. He said it is fair to say that ASMI supports
niche marketing and that they will provide whatever technical
system that they can on the marketing area.
SENATOR HOFFMAN said the state of Alaska, through the Permanent
Fund Corporation, has invested many millions of dollars in malls in
the United States, and he has sent a letter to the governor asking
that they look into having some promotional displays on Alaska fish
in some of the major stores in these malls. He believes this will
target the average consumer on the streets and will have some
impact on the retailing of the fish available out there.
Number 610
There being no further testimony on SB 255, CHAIRMAN LEMAN
stated the bill would be set aside for further action.
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