Lobster Pricing Agreement Ends the Dispute

The agreement continues to tie prices to market conditions, adjusted on a weekly basis, using the Urner Barry commercial market reports. The original formula was tied to the price of 1 1/4 lb lobster. The amended formula recognizes that a portion of the lobster sales from NL realizes a lower price in the market because it does not meet the specifications for the premium price.

The amended formula effectively reduces raw material prices by 10 to 12 cents a pound - roughly two and half per cent. The amended formula comes into effect on Sunday, 6 May.

FFAW President Earle McCurdy said the key factor from the Unions perspective is that the price to harvesters will continue to be based on market conditions.

In collective bargaining this spring, the Union proposed a price-to-market formula, while the buyers essentially wanted to set the price themselves. After the Provinces Standing Fish Price-Setting Panel ruled in favour of the Union, most buyers refused to buy.

The Union filled the vacuum by organizing harvesters into a co-operative structure in partnership with the Fogo Island Co-op. The co-op so far has shipped five tractor trailer loads of lobster - about C$1 million worth - including a load currently being put on board a truck on the Port au Port Peninsula.

The buyers were convinced we would fall flat on our face with this initiative, Mr. McCurdy said. They only got serious about settling the dispute when they realized that we meant business, and that the harvesters didnt need them to move their lobsters.

He said it was remarkable that the fledgling organization was able to co-ordinate the sales of this amount of lobster at the eleventh hour, without the normal infrastructure in place.

But with the lobster season set to open next week on the Northern Peninsula and other areas, Mr McCurdy said the co-op would have been hard-pressed to keep up with the demand to move lobsters.

At no time did we anticipate being able to buy and market millions of pounds of lobster in our initial year. But establishing the co-op structure was essential to getting the buyers back to the table. We felt it was in the best interests of the long-term success of the co-op to find a resolution to the price dispute.

He said the co-op is here to stay. Now that the price impasse has been resolved, he said the elected Board of Directors will have the time, in co-operation with the Union and Fogo Island Co-op, to develop a long-term plan.

This is not something you can do overnight, Mr McCurdy said. Its one thing to move a few loads with an ad hoc structure, but to try to move millions of pounds would be exceptionally difficult, and to try to move too far too fast could jeopardise the harvesters dream of establishing their own sales organization. Now we have time to organize the kind of infrastructure and marketing structure you need to be a major player in that industry.

But Mr McCurdy said the principle involved is much bigger than a few cents a pound. The buyers will think twice about trying another lockout, and now we have time to put the building blocks in place for our the harvesters new organisation.

He was confident 2012 will turn out to be a turning point in the evolution of the lobster fishery in this province.