Legislature(1999 - 2000)
02/08/1999 05:06 PM House FSH
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE SPECIAL COMMITTEE ON FISHERIES February 8, 1999 5:06 p.m. COMMITTEE CALENDAR PRESENTATION: OVERVIEW OF ALASKA SEAFOOD MARKETING INSTITUTE AND SEAFOOD MARKETS CHAIRMAN BILL HUDSON called the House Special Committee on Fisheries meeting to order at 5:06 p.m. Members present at the call to order were Representatives Hudson, Dyson, Harris, Morgan, Kapsner and Smalley. Also present was Representative Austerman. SUMMARY OF INFORMATION BARBARA BELKNAP, Executive Director, Alaska Seafood Marketing Institute (ASMI), presented a brief overview of ASMI and its programs. She explained that ASMI is fully funded by the industry and receives no general fund dollars. ASMI works with food service and retail outlets to promote consumption of all varieties of Alaskan seafood. They attempt to build relationships with the decision-makers; for example, ASMI sponsors a three-day seminar for executive chefs at the Culinary Institute of America, which has garnered thousands of promotions throughout the country. MS. BELKNAP, in response to questions from committee members regarding farmed salmon, indicated that farmed salmon outsells wild product in the United States. Alaska finds itself in the position of developing a market in the U.S., since most of our product has gone overseas. She noted that some places like Europe and Japan are becoming more concerned about the "artificial" aspects of farmed salmon. There is an increasing trend toward natural products. ASMI is about to start a major campaign to show Alaskan salmon is not endangered. She noted that there are two misconceptions about salmon: one is that all salmon is farmed, and the other is that there are no wild salmon left. MS. BELKNAP addressed questions from the committee regarding ASMI's financial resources. She noted that the biggest challenge is getting consumers to choose seafood, and then, by extension, Alaskan seafood. The United States is primarily a nation of beef and chicken eaters. ASMI recently received a $5 million federal grant which has helped bolster their budget. It is still much smaller than our competitors; for example, Norway spends $20 million per year on their marketing effort. The State of Alaska withdrew general funds when the 1% assessment went into effect, but continued providing $500,000 in matching funds for a federal program until three years ago. SANDRO LANE, Owner, Taku Fisheries and Taku Smokeries, and ERIC NORMAN, General Manager, Taku Fisheries, operate a small value-added company called Taku Smokeries and a medium-sized processing facility, Taku Fisheries. Mr. Lane stated that he did not see value-added as being a volume business. He noted that there is a price differential between wild and farmed fish. He felt it is even more difficult to compete against that price differential when you "add value" because of additional labor costs. MR. LANE stated, in response to questions regarding the oversupply of farmed fish and the decline in the Asian markets, that the greater problem has been an oversupply of farmed fish. The Asian economy has declined, but it seems to have bottomed out. The oversupply of farmed fish has required him to reorganize his business. Fifteen years ago, Taku Smokeries did the majority of its business on the wholesale market and only a small portion through retail. As it became obvious that they could not compete with the increased production and lower costs of farmed fish, they now do almost all of their business through their local retail store and mail order. Mr. Lane also stated that he had filled out several questionnaires for the Federal Trade Commission regarding unfair trade practices by Chilean farmed salmon producers, but he has not heard anything from them. MR. LANE was asked about new product development, and he noted that he was able to take advantage of a federal program for small businesses; however, he did not believe the State of Alaska offered a comparable program. He also stated that there is a great deal of capital and risk involved in developing a new product, which makes it even more difficult for small companies to get the necessary financial backing. MR. LANE discussed quality issues and the need to improve management of the resource to maximize quality and value. He stated that he had discussions with the Alaska Department of Fish and Game (ADF&G) regarding managing for quality. He felt that ADF&G would continue doing things the same way because it is the way it has always been done. REPRESENTATIVE MORGAN asked a question regarding the effects of a federal takeover of subsistence fisheries on commercial fisheries. Neither witness felt qualified to answer, but Mr. Norman did not think there would be much of an impact. COMMITTEE ACTION The committee took no action. ADJOURNMENT The meeting was adjourned at 6:06 p.m. NOTE: Due to a mechanical malfunction, no tape is available for this meeting.
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