Baypack owner says Nelbro's efforts quashed plans

Posted: Wednesday, February 26, 2003

ANCHORAGE (AP) -- A Bristol Bay fisherman testified Tuesday that a major processor quashed his 1995 effort to bring a new, independent processing vessel on line in the Bristol Bay sockeye salmon fishery,

Frederick S. Magill of Sitka, testifying in the Bristol Bay price-fixing case, said Nelbro Packing Co. loaned his company, Baypack Fisheries, more than $1.5 million for conversion of a processing vessel, but failed to deliver promised technical support or good prices from Japanese buyers, Magill said. Baypack went out of business after one season. Baypack eventually sued Nelbro and settled out of court.

The class-action price fixing suit began Feb. 3. Some 4,500 fisherman are seeking more than $1 billion, contending Seattle-based processors and Japanese importers conspired to fix prices in Bristol Bay from 1989 to 1995.

Baypack Fisheries was an investment of several Bristol Bay permit holders.

Magill, a third-generation commercial fisherman, said Nelbro's failure to provide skilled technical quality control to grade the fish and get a good price in Japan led to the demise of Baypack's effort to gain a small foothold in the fishery with the 60-foot processor Red Sea.

Magill said Nelbro was supposed to receive 4 percent of Baypack's earnings -- up to $20 million -- for marketing, quality control and production, plus 3 percent of sales in excess of $20 million.

According to Magill, Nelbro did not provide the promised technical expertise and sold Baypack fish for considerably less than it sold its own fish.

''We ended up with a lot of high quality fish graded as low quality fish,'' Magill said.

Magill said he believed he had a good working relationship with Nelbro until other processors found out how much the Red Sea was paying fishermen.

He testified he received a phone call from Nelbro executive Trevor Beeston, ''screaming at me for paying $1.10 cash price at Ugashik,'' he said. ''I said we didn't have tenders at Ugashik.''

Magill said Beeston wanted to know what he was paying and where, but he declined to tell him.

''We agreed that the lawsuit was about to be filed and we would not discuss fish prices,'' he said.

Beeston said other processors, including defendants Trident Seafoods, Ocean Beauty and Unisea, were upset because Baypack had stolen its fishermen. Magill said Beeston told him that Trident executive Chuck Bundrant said, ''he was going to bury Baypack.''

Magill said he was left speechless by the unexpected call, in part because of a 20-year personal and business relationship with Bundrant. Magill said he never discussed the matter with Bundrant.

Magill acknowledged that refurbishing the Red Sea, which he described as ''one of the most modern processors of its time,'' delayed its arrival into the 1995 Bristol Bay fishery until July 1, after fishing had begun.

Under cross-examination, an attorney for Trident Seafoods asked Magill if he bore some responsibility for Baypack's failure. Magill said his major fault in the failure of Baypack was ''that I aligned myself with a bunch of people who put the screws to us.''

''We had the graders from hell doing the grading,'' he said. ''We did not have the graders we were promised aboard the vessel.''

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