Pacific Seafood Group sued over Ocean Gold deal

By

James Wright, Senior Editor

Published on
January 23, 2015

U.S. West Coast fishermen, who several years ago sued Pacific Seafood Group over antitrust allegations, have filed another suit against the Oregon-based supplier, this time objecting to its pending acquisition of a prominent whiting processor based in Washington.

According to The Oregonian, several Oregon commercial fishermen claim that Pacific is abusing its market power and dominant position in the West Coast seafood supply by acquiring Ocean Gold of Westport, Wash., a processor of Pacific whiting, Dungeness crab, pink shrimp, sardines and tuna.

Pacific’s general counsel Dan Occhipinti told the newspaper that the lawsuit is a “frivolous retread” of an earlier complaint. “The same attorneys initiating this stunt are standing in the way of new investments and new opportunity for the community of Westport. More processing capacity in whiting, shrimp and crab means more boats in the port, opportunities for fishermen and good things for the community.”

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.

Haglund told The Oregonian that Pacific CEO Frank Dulcich would control 90 percent of Ocean Gold if this latest acquisition went through. “Under no circumstance should he end up as the owner of Ocean Gold,” he said. The Whaleys are again listed as plaintiffs in the latest motion, according to the newspaper, but are joined this time by three other fishermen from the region: Jeff Boardman from Depoe Bay, Dennis Rankin of Astoria and Robert Seitz.

Pacific 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.

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