March 13, 2010

Rough waters for lobstering



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Gordon Chibroski

click image to enlarge


Gordon Chibroski

Staff Writer

With the price of lobster at a near-record low, the Maine Lobster Council is launching a new ad campaign this week -- the first time it has ever advertised in the ''off-season'' of October -- to encourage consumers to buy lobster, now selling at stores for as low as $3.49 a pound.

To get through this rough patch, lobstermen, dealers, restaurateurs and grocery store owners also have reached an unusual agreement to collectively tighten their belt to make it work.

''Everyone is willing to take a little less profit,'' Lobster Council Executive Director Dane Somers said. ''It's not normal times.''

The worldwide economic crisis is to blame. Traditionally, most Maine lobster are sold to Canadian processors at this time of year. However, many of those processing plants have shut down in recent weeks because they were financed by Iceland-based banks, which have collapsed.

At the same time, the lobsters are hitting like crazy, creating a glut of product -- and lobstermen are paying near-record fuel and bait prices.

It all adds up to one of the toughest times the industry has ever seen, Somers said.

''People feel out of control. Events are happening that they don't understand, and they're shocked at how quickly the impact of this is felt at the Main Street level,'' Somers said. ''This has been sudden and fierce and hard for people. It's like being hit by a hurricane.''

In addition to the advertising campaign, which will launch mid-week on radio and print, the Lobster Council has been trying to keep the industry going by getting everyone focused on moving as much lobster to consumers as possible. Somers said he has convinced several major grocery chains such as Hannaford Bros. and Shaws, and restaurant chains such as Kittery-based Weathervane, to commit to offering special promotions and advertising for lobster.

Even local communities are pitching in: Over the weekend, the Penobscot East Resource Center in Stonington threw a community lobster bake to help the eastern Maine lobster fleet. Thousand of people attended the $3.50 per lobster fundraiser.

Hannaford will run a special advertising campaign and offer lower-than-usual pricing for lobsters, spokesman Michael Norton said Monday.

Lobsters currently selling for $7.99 a pound in Massachusetts and New Hampshire will drop $2 a pound on Wednesday to $5.99. Coastal Maine stores are selling lobster for $4.99 and inland at $5.69, he said.

At those prices, Hannaford's profit margin is close to break even, Norton said.

''We're trying to do our part here,'' he said. ''Now that the supply is cheap enough, you can bring (the price) down and hopefully that will help keep the product moving.''

Dealer Pete McAleney said he's now operating at a break-even pace, too. On Monday, he said he was just able to sell his stock on hand, despite lobstermen taking a few days off over the Columbus Day weekend.

''It took me all weekend (to sell my stock). If the fishermen had gone out, I couldn't have done it,'' said McAleney, owner of New Meadows Lobster in Portland. He sells about 2 million pounds a year and is usually working with five Canadian processors during October. Two of them have shut down, he said.

Reaching for a historical comparison, McAleney said the price drop after 9/11, when planes weren't flying, was similar. But this time, the problems are tied to a global financial crisis.

''This time, it's not a week-long problem. I think this will last a year at least,'' he said.

Somers, from the Lobster Council, agreed.

''I think we are going to be facing these issues throughout 2009,'' he said. ''We will be challenged to come up with innovative ways to open up new markets and develop the markets we already have. It's going to be a year where everyone is going to work harder than ever.''

In the meantime, nobody is making much money on the lobster trade.

''You just hope to break even right now. Nobody is greedy,'' he said. ''If I can pay my workers, I'm happy.''

The calendar is not helping. Maine's autumn tourism season is waning and, when the leaf peepers go home, there will be fewer out-of-state visitors asking for lobster.

At Two Lights Lobster Shack in Cape Elizabeth, demand was still high Monday, and the restaurant barely had to drop its price, said owner Jeff Porch. A full lobster dinner was going for $19.99, down $1 from a week ago.

''We're just hoping everything holds together for the next few weeks,'' before they shut down for the winter, he said. Business has been stronger than usual the last few weeks, he said.

Usually in this post-Labor Day period, they would expect to sell 20 or 30 lobsters a day, but they've been selling between 60 and 70 a day. On Sunday, they sold 100 lobsters, he said.

But Porch said he understands the dilemma for the lobstermen.

''Why bother going out at all?'' Porch said.

Staff Writer Noel K. Gallagher can be contacted at 791-6387 or at:

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