Maine investigates lobster price-fixing complaints

AP News
Posted: Dec 16, 2009 2:21 PM

Maine's attorney general, responding to complaints by lobstermen suffering under rock-bottom prices, has opened an investigation into allegations of price-fixing among some lobster dealers.

The inquiry is in the early stages and is expected to last several months, said Kate Simmons, a spokeswoman for state prosecutors. It was begun after the office received a complaint letter signed by more than 50 lobstermen.

"The office has just begun to investigate and has not made any conclusion or determinations that anything illegal is happening," Simmons said.

The case illustrates the ongoing tensions between lobster harvesters and dealers who buy their product along the rugged Maine coast.

The state accounts for 80 percent of the U.S. lobster catch and prices set at the docks here can ripple into the retail market. The state has nearly 6,000 licensed harvesters and dozens of dealers who buy from them before sending the seafood on its way to retail stores and restaurants the world over.

For decades, lobstermen have accused dealers of working together to set low dockside prices and control the market. A task force created by the governor last year got an earful from lobster harvesters who complained about dealers, said Department of Marine Resources Commissioner George Lapointe.

"I said if you want to do something about it, file a complaint with the attorney general's office," Lapointe said. "Clearly someone did."

Simmons said her office has sent civil summonses to a number of dealers seeking information, but she wouldn't divulge which dealers _ or how many.

Norbert Lemieux, a longtime Cutler lobsterman, said dealers talk to each other on a daily basis in figuring how much they'll pay for the catch that day. It's unfair that dealers pay lobstermen $3 a pound, the going price these days, when those same lobsters might retail for as much as $25 a pound, said Lemieux, who said he was not among those who signed the letter asking for a probe.

"Dealers make out like bandits," he said.

Dana Rice, a lobster dealer from Gouldsboro who said he is not a target of the investigation, said complaints by lobstermen reflect a lack of understanding about the economics of the industry. Prices are low because of slack demand, not dealer collusion, he said.

"The basic problem is the world is broke," Rice said.

The situation today is similar to the mid-1950s, when lobstermen _ not dealers _ were targeted in a price-fixing investigation. Back then, the newly created Maine Lobstermen's Association called upon thousands of lobstermen to stop fishing in protest of a 5-cent price reduction, to 30 cents a pound, of what they were offered for their catch.

Their actions resulted in the association and its president being charged with, and later found guilty of, violating the Sherman Antitrust Act. They were given suspended fines, but most people in the industry say little has changed since then.