Ocean Beauty image as price leader challenged

Posted: Thursday, May 08, 2003

ANCHORAGE (AP) A processor's claim of a competitive Bristol Bay sockeye salmon fishery came under fire Wednesday by fishermen's attorneys who called Ocean Beauty Seafoods a price follower in a shrinking market.

The clash came during testimony by Richard Parks, an economics professor from the University of Washington, who described Ocean Beauty as a price leader, that in no way conspired to lower prices to fishermen.

In a competitive market, participants have to be well informed, said Parks, who acknowledged that Ocean Beauty discussed prices with competitors.

Parks was the latest economist called in the class action lawsuit brought by 4,500 Bristol Bay fishermen against Seattle-based processors and Japanese importers. Fishermen allege that processors and importers conspired to lower prices to fishermen to increase their own profits.

At the crux of the case is whether processors and importers constantly exchanged pricing information among each other.

Any price interaction between Ocean Beauty and its competitors is inconsistent with any agreement to suppress prices,'' Parks said. When all is said and done, Ocean Beauty consistently paid more than the other processors.''

Plaintiffs' attorney Parker Folse said Ocean Beauty's statistics were misleading. Ocean Beauty's prices are not significantly different than prices paid by competitors,'' Folse said.

Folse said he did his own calculations and concluded that only 9 percent of fish purchased by Ocean Beauty were at prices above other defendant processors.

In 1989, when Ocean Beauty posted $1.25 a pound on June 13, so did four other processors, Folse said.

In 1990, Ocean Beauty posted $1.30 a pound on June 1, but bought just one percent of its season total before lowering the rate, to $1.15, and then $1.10, Folse said. On July 23, when the run was just about over, the processor boosted the price back up to $1.30 a pound, buying less than two percent of that season's supply of fish, Folse said.

Folse also challenged Parks' conclusion that a history of competition in Bristol Bay facilitated growth of Ocean Beauty's market. Trident Seafoods bought two competitors and merged with a third, and Wards Cove Packing Co. acquired another former competitor in the bay, Folse said. Trident and Wards Cove are defendant processors.

The market became more concentrated, didn't it?'' Folse asked Parks.

A slight bit,'' Parks said.

The trial began Feb. 3. Judge Peter A. Michalski has advised attorneys to prepare for the case to go to the jury May 27.

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