Legislature(1997 - 1998)

02/24/1998 01:42 PM Senate L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                                                                               
            HB 73 - SALMON MARKETING ASSESSMENT & ASMI                         
                                                                               
CHAIRMAN LEMAN called the Senate Labor and Commerce Committee                  
meeting to order at 1:42 p.m. and announced HB 73 to be up for                 
consideration.                                                                 
                                                                               
REPRESENTATIVE HUDSON, sponsor, testified that this bill would                 
extend the current one percent domestic salmon marketing assessment            
when the law is scheduled to sunset on June 30, 1998.  This                    
assessment is essential to continue funding the needs of the Alaska            
Seafood Marketing Institute (ASMI) and its various programs.  It is            
fishermen and women taxing themselves and trusting the legislature             
to appropriate it back to them, which it has always done.  This                
fund accompanied with a self-assessment by the processors and a                
fund available through the federal overseas marketing program are              
the three funding essentials of the entire seafood industry for the            
State of Alaska.  This has broad support from the harvesters in                
Alaska and ASMI.                                                               
                                                                               
SENATOR HOFFMAN stated that one of the biggest contributors to the             
fund presently are the Bristol Bay fishermen and they feel that                
ASMI does little to assist them in their markets which are                     
primarily Japanese.  They feel that they are unduly taxed by this              
program.                                                                       
                                                                               
REPRESENTATIVE HUDSON responded that a majority of fishermen and               
women have indicated strong support for this legislation, but he               
understands the situation Senator Hoffman is talking about.                    
Representative Hudson said, however, that it is absolutely                     
imperative to have some funds to replace the farmed salmon products            
that are competing with Alaska salmon markets, particularly in the             
domestic marketplace.  The Japanese market is largely handled by               
the federal assessment which manages for the sale and export of all            
Alaska salmon, including those from Bristol Bay. He said those                 
people benefit indirectly by the fact that they are creating a                 
"bigger pie" and a higher perception of value among competing                  
protein sources.                                                               
                                                                               
Number 127                                                                     
                                                                               
MS. BARBARA BELKNAP, Executive Director, ASMI, responded to Senator            
Hoffman that she was sympathetic to his concerns.  She was pleased             
with the Southwest Alaska Municipal Conference resolution to                   
support funding of ASMI.  She said they had struggled with this                
issue since the tax was enacted in 1993, but their problem is that             
they don't control the supply of product to market.  Last year they            
were able to do a nationwide Safeway promotion for reds and most of            
the stores also put Bristol Bay salmon on the adds.  If they are               
able to get the product, they do sockeye salmon promotions along               
with their canned salmon promotions.  She noted that the sale of               
canned red salmon overseas has been boosted tremendously by ASMI's             
programs.                                                                      
                                                                               
CHAIRMAN LEMAN said he has seen results that he is pleased with                
while the organization hasn't been perfect from his perspective.               
He asked if the one percent was more than replaced by the good                 
accomplished in the marketplace.                                               
                                                                               
MS. BELKNAP answered "unquestionably."  She also noted that the                
Norwegians have recently doubled their marketing budget to $40                 
million and they have a very good product and control a great deal             
of the market.  ASMI still felt that marketing was necessary and               
that it is important to expand.  The feedback she is getting from              
fishermen and their organizations is that they see the necessity               
for an overall marketing program simply to keep Alaska salmon a                
viable product in the marketplace.                                             
                                                                               
CHAIRMAN LEMAN asked how the Fishermen-in-Stores program worked                
this past year.                                                                
                                                                               
MS. BELKNAP said ASMI cut most of its programs except for the basic            
in-store demonstrations.  Five fishermen went out in the spring and            
it went real well as it always does.  It's a question of having the            
money, because it costs $1,100 - $1,600 a piece to send them out.              
                                                                               
CHAIRMAN LEMAN said some legislators have suggested that the                   
marketing directors of ASMI shouldn't be located in Bellevue, but              
should reside in Alaska, although ASMI has done studies to show                
that the Bellevue location is more appropriate.                                
                                                                               
MS. BELKNAP answered that it is a good business decision to have               
them in Bellevue.  When the lease expires in August 1999, they are             
going to move to another area in Ballard.  They have found that it             
would increase their costs 20 - 30 percent to move them to Alaska.             
Efficiency would be impaired.  A very expensive study was done                 
three years ago for Senator Donley in which the industry across the            
board said the best business decision was to keep it in Seattle.               
The Board is working with only industry money  now and feel they               
have a fiduciary responsibility to spend that money as wisely as               
possible.                                                                      
                                                                               
SENATOR HOFFMAN asked what ASMI was planning on doing to assist the            
new facility in Anchorage in marketing.                                        
                                                                               
MS. BELKNAP said they would be producing value-added products and              
the facility would be another client for their marketing programs.             
                                                                               
MS. LIZ CABRERA, Petersburg Vessel Owners Association, supported HB
73.  She said they recognize ASMI's work as essential in                       
maintaining our share of the domestic salmon market.                           
                                                                               
MR. JERRY MCCUNE, United Fishermen of Alaska, supported HB 73 to               
help keep our share of the domestic salmon market.  He said that               
they don't agree with everything that's done in ASMI, but they were            
going to get together and work through some of the problems they               
see as fishermen, including Bristol Bay fishermen.                             
                                                                               
MR. JEFF STEPHAN, United Fishermen's Marketing Association,                    
supported HB 73.  He said a large component of their membership are            
salmon seiners.  ASMI has been very important to UFMA and to all               
the members (crab, halibut, salmon, whitefish, etc.).  "As bad as              
our position in the salmon market is, we would be far worse off                
without the good efforts of ASMI over the years."  He said that                
Alaska salmon needs to have a continual marketing program that hits            
retail, food service, consumer, food service magazines, T.V.,                  
promotions, etc.  ASMI knows exactly where to put money, he said,              
and the only thing they need is money to put in.                               
                                                                               
CHAIRMAN LEMAN asked if the salmon fishermen are assessing                     
themselves one percent and the processors are assessing themselves             
3/10 percent, would it be appropriate for the fishermen of other               
seafood products in Alaska to do a comparable assessment.                      
                                                                               
MR. STEPHAN said at this time he wouldn't support adding on any                
direct taxes like the salmon marketing tax for any other species               
until there is a chance to discuss it as an industry.                          
                                                                               
MR. THEO MATTHEWS, Executive Director, Cook Inlet Driftnetters                 
Association, said his group is in the same situation as Bristol                
Bay.  Eighty percent of their harvest is sockeye and 95 percent of             
their value of harvest is sockeye salmon which is sold directly to             
Japan.  When his Board voted unanimously to support this tax, their            
primary concern was that the legislative funding has been cut so               
drastically and so rapidly to ASMI that without this tax, ASMI,                
itself, might be in jeopardy.  That is not acceptable at all.                  
There is a place for ASMI in both foreign and domestic marketing.              
                                                                               
CHAIRMAN LEMAN noted that he is a seller of salmon and has a                   
potential conflict of interest.                                                
                                                                               
Number 373                                                                     
                                                                               
SENATOR HOFFMAN said he didn't want to delay this bill, but he                 
would like to hold it over and bring it up as soon as possible.  He            
wanted to call his constituents first, although he knows they                  
support the tax.                                                               
                                                                               
SENATOR KELLY said he supported the bill.                                      
                                                                               
CHAIRMAN LEMAN said he would schedule the bill for next Tuesday.               

Document Name Date/Time Subjects