Major U.S. seafood supplier Pacific Seafood Group has abandoned plans to acquire Washington-based Ocean Gold Seafoods due to ongoing legal issues brought on by allegations of antitrust violations.
The acquisition was derailed late last week after a group of commercial fishermen successfully blocked the maneuver in federal court, earning a temporary restraining order. They claimed Pacific would gain a monopoly in the West Coast groundfish, whiting and coldwater shrimp markets and could suppress prices paid to fishermen. A federal judge had set a hearing for Feb. 9.
But according to numerous reports, Pacific has opted to drop its plans, after the company’s general counsel Daniel Occhipinti had called the lawsuit a “frivolous retread” of an earlier complaint.
“It will be of significant benefit to the competitive health of the West Coast fishing industry if [Ocean Gold] can be an independent competitor rather than under the control of Pacific Seafood through either an exclusive marketing agreement or by Pacific Seafood Group acquiring it,” Michael Haglund, a Portland attorney representing the fishermen, told the Daily Astorian (Ore.).
On 2 April 2012, Pacific settled a class action lawsuit filed by two Brookings, Ore., fishermen regarding allegations dating back to 2010 that Pacific was violating antitrust laws by paying West Coast fishermen below-market prices for whiting, groundfish, shrimp and Dungeness crab. Lloyd and Todd Whaley alleged that Pacific illegally conspired with Ocean Gold to suppress whiting prices.
The suit was settled and terms were not disclosed but according to the Whaleys' attorney, Mike Haglund, the result included a five-year agreement with multiple pro-competitive features: A 10-year exclusive agreement between the two companies would not be renewed in 2016 to potentially create a large new processing competitor; the two companies would report average wholesale prices to a seafood market reporting service to build transparency; conflicts of interest involving fishermen’s cooperatives would be eliminated; and the two companies would accept fish scrap from new processors that enter the market.
Pacific, based in Clackamas, Ore., is one of North America’s largest seafood suppliers with annual sales estimated at well more than USD 1 billion, employing more than 2,500 people at processing plants and distribution facilities throughout the western United States.