Legislature(1993 - 1994)
04/25/1994 08:15 AM House RES
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SB 306 - ANTITRUST EXEMPTION FOR FISHERMEN SENATOR JIM DUNCAN, PRIME SPONSOR, stated SB 306 confers state antitrust immunity on fishermen, allowing them to negotiate raw fish prices with processors in order to improve the market price of Alaska seafood. It also permits fishermen and fish processors to agree to the minimum price for which processors will sell the processed fish. He said in recent years, salmon prices have fallen dramatically. Alaska needs to offer greater support to the state's fishing industry, which is the state's largest private employer. SENATOR DUNCAN pointed out that fishing affects every segment of the state's economy, from small coastal villages to the state's general fund. Ex-vessel value of Alaska salmon declined by 67 percent between 1988 and 1993, yet salmon fishermen caught 64 percent more fish. As raw fish prices continue to drop, fishing communities and boroughs suffer from poor local economies, as well as decreased state revenue sharing from fisheries taxes. He stated British Columbia fishermen have consistently been getting higher salmon prices than Alaska fishermen, in part because of multi-year collective bargaining agreements with processors. SB 306 provides for a similar system, allowing fishermen to form associations to negotiate prices with processors. SENATOR DUNCAN said this legislation was recommended in the 1993 Alaska attorney general's report on the Bristol Bay sockeye salmon industry. A state antitrust exemption is the first step. He stated once the legislature has approved a state exemption, the state will request a federal exemption. Collective bargaining between fishermen and processors will help stabilize commercial fishing prices, bolstering local and state economies. He stressed stable raw fish prices also will promote stable consumer prices for processed seafood products, which means greater sales of Alaska seafood. Number 046 JIM FORBES, ASSISTANT ATTORNEY GENERAL, testified via teleconference and said SB 306 is a first step in the recommendation given by the attorney general. REPRESENTATIVE JEANNETTE JAMES asked if there are any negatives to SB 306. MR. FORBES replied he cannot think of any negatives. He pointed out there is a zero fiscal note. He said SB 306 will help facilitate communications between the fishers and processors. REPRESENTATIVE JAMES wondered if there will be fees involved which might be a burden on the small fishermen. MR. FORBES stated SB 306 is neutral on that type of issue. Number 070 REPRESENTATIVE BILL HUDSON asked if it would be possible to require value-added prior to exportation. MR. FORBES replied SB 306 is neutral on that issue as well. CHRIS GATES, DIRECTOR, DIVISION OF ECONOMIC DEVELOPMENT, DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT (DCED), expressed support for SB 306. JOHN ABSHIRE, DEPUTY COMMISSIONER, DEPARTMENT OF LABOR, expressed support for SB 306. He stated the department is involved in mediation in trying to reach a price and SB 306 will help the entire industry. Number 093 TORIE BAKER, MEMBER, BOARD OF DIRECTORS, CORDOVA FISHERMEN UNITED (CFU), testified via teleconference and said CFU supports SB 306 for all of the reasons mentioned. KATE TROLL, EXECUTIVE DIRECTOR, SOUTHEAST ALASKA SEINERS, said in 1991, she was involved in a five day strike and realized at that time that fishermen are stuck in limbo, as they are not the cannery operated and dominated fleet anymore but are also not independent businessmen either. She stated the fishing industry is an industry in transition. She felt SB 306 will help bridge that transition to where the fishermen want to be perceived--as business partners entering into negotiations on price. MS. TROLL said a group got together shortly after the strike to determine how they could best help their industry to be positive and it was felt that supporting value-added products and price stability was important. She stated to get to price stability, there was a need to enter into multi-year contracts. She explained they had a conference to discuss the concept and the major processors were not allowed to attend the conference. After that conference, a pink salmon working group was formed and a formula was developed to spur the idea of multi-year contracts. That formula was sent to the processors. She noted the response was silence because the processors had been counseled by their attorneys that they cannot enter into conceptual types of discussions without conflicting the antitrust regulations. She stressed that is why SB 306 is important-- to get that type of dialogue and constructive negotiations going. MS. TROLL noted SB 306 is a first step. In response to Representative James's question about fees, she anticipates the existing associations will take up the initiative and noted there is a dues structure. She said there are also organizations looking at possibly forming a marketing association, which would be based on a small percentage of whatever was negotiated. She urged committee members to pass SB 306. Number 164 REPRESENTATIVE PAT CARNEY made a MOTION to MOVE SB 306 out of committee with INDIVIDUAL RECOMMENDATIONS. REPRESENTATIVE HUDSON asked if there were any representatives of the processors association present. SENATOR DUNCAN said the processors were represented at Senate hearings on the bill and expressed support for SB 306. REPRESENTATIVE HUDSON asked if anyone has talked to Senator Stevens and the Congressional delegation to get them moving on the second step. SENATOR DUNCAN responded he has not yet spoken to anyone because he wanted to ensure SB 306 gets passed first. He noted the state of Washington has received a federal exemption. REPRESENTATIVE ELDON MULDER asked if there was a committee substitute (CS) coming out of the Senate on SB 306. SENATOR DUNCAN stated no. He said when the bill was in the Judiciary Committee, Senator Taylor wanted to look at what it would take to set up a state agency and have state oversight, instead of going through a federal exemption. REPRESENTATIVE MULDER clarified that is one of the options outlined in the attorney general's memo. SENATOR DUNCAN replied it is one option and the other option is the federal exemption. He felt the federal exemption is the option which should be pursued because it does not require the costs, efforts, etc., involved in creating a state agency. REPRESENTATIVE MULDER asked how realistic it is to get the federal exemption. SENATOR DUNCAN responded he is not sure, but pointed out it has been done in the state of Washington. REPRESENTATIVE JAMES felt the simplest way to go is to get the federal exemption and leave setting up a state agency as the last option. REPRESENTATIVE CON BUNDE felt the demand for fish is a driving force and not just individual tastes but also price. He said a possible negative to SB 306 is these associations and long-term agreements might increase consumer price. JERRY MCCUNE, PRESIDENT, UNITED FISHERMEN OF ALASKA, felt there will not be any increase in price because of the negotiations on price. He said fishermen are currently being paid less than they have ever been paid and the consumer price remains the same. He stressed the middle person is the person making the money. He noted fishermen are currently at the whim of supply and demand and what the processors will pay. He pointed out that in Japan the price is continually going up on the retail level for the export. REPRESENTATIVE BUNDE said that is his concern. The fishermen are not getting paid--it is the middle people who are marking up the price. If the middle people do not chose to reduce their mark-up, the consumer price is going to go up to reflect the increase to the fishermen and a decreasing spiral occurs. He wondered if the middle people will absorb enough so the fishermen can get an increase without the end product costing more to the consumer. Number 264 MR. MCCUNE stated many processors are cutting out the middle people, such as the broker, and are going to market for themselves resulting in less costs to the fishermen. He explained in the United States, the fishermen send their fish to a broker, the broker takes bids and gets the highest price possible. Many processors are going direct to the consumer, so they get lower costs in their business which does reflect a higher price for the harvester. However, the problem is the harvester has no leverage to get a higher price and the only options are a strike or delivering to one processor. REPRESENTATIVE HUDSON felt SB 306 could lead to an expansion of marketing of the state's fish product in the domestic market particularly because at the present time, the antitrust constraint against the fishermen talking to the processors is the same constraint of them talking to each other. He said when he was involved on the seafood marketing side, one of the big problems was that everyone was cutting their own deal with their own broker and their own distributors, yet they could not share that information in order to get a uniformly higher price for the product. He said the lowest price tended to establish the price on a regional basis. REPRESENTATIVE HUDSON thought if the federal exemption can be approved, SB 306 will be revolutionary in providing for some price negotiations which would expand marketing and at the same time, improve quality. He said there would be an ability to not only negotiate a three year contract for price but also control the quality, which would ultimately lead to an increase in the consumer price on the product. If the consumer perceives the product is going to be available, the quality is going to be consistent, and the price is going to be known, the fishermen in Alaska would get more money for their fish on a raw fish basis. Number 327 MR. MCCUNE stated if he could stabilize the price on a three year basis, he could then do some financial planning. In addition, the processor would know what he needs to do to make his profit with the consumer. He stressed unfortunately fish are currently like oil, the price is up and down. He did not feel it will be difficult to get the federal exemption. CHAIRMAN WILLIAMS asked if there were any objections to the motion. Hearing none, the MOTION PASSED.
| Document Name | Date/Time | Subjects |
|---|