Alaska company invests in farmed fish

Icicle Seafoods' purchase of Chile plants surprises some industry observers

Posted: Wednesday, March 21, 2007

A homegrown Southeast Alaska seafood company took some by surprise when it announced earlier this month it had bought farmed-fish plants in Chile.

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After all, the state has spent millions marketing its unique wild seafood to the global market since the industry took a huge hit from farmed fish in the 1990s.

"I am not trying to convince Alaska fishermen that it is a good thing, but this farmed industry is not going away," said Don Giles, president and CEO of Icicle Seafoods.

"We tried to ignore it for a while. For us to be involved in both makes us a better, more diversified supplier," Giles said.

"Obviously there has been some heartburn. We knew that there was going to be," he said.

Icicle was founded as Petersburg Fisheries in 1965 by fishermen in Petersburg. This isn't the first time it has delved into fish farming. It had a partnership in the '90s with another Chilean company to market farmed salmon.

It is the first time Icicle has owned farmed-fish plants, however, and the move has some Alaska fishermen wondering how it will affect the state's wild-fish industry.

"I think anybody could see that as they become more involved in the sale of, and perhaps the ownership of salmon farms, they possibly need us less and perhaps could even supplant us in the marketplace," said David Harsila, president of the Alaska Independent Fishermen's Marketing Association.

"We have always felt that it was a pretty major concern for us," said Harsila, whose 41-year old organization represents fishermen of Bristol Bay.

Bobby Thorstenson Jr., son of Petersburg Fisheries founder Bob Thorstenson and a 3 percent owner of Icicle, said the move should serve as a wake-up call. Thorstenson is president of the fishermen's advocacy group United Fishermen of Alaska.

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"The real story here is the most Alaskan of all companies just bought a farm in Chile. The best way this decision could help Alaska's industry is if the industry wakes up and decides to try and become more competitive and more efficient," Thorstenson said.

Alaska accounts for roughly 12 to 14 percent of the international market for salmon. In 1981, its world share was 95 percent, Giles said.

Farmed fish production overtook wild Alaska salmon production in 1991, according to a recent report on changes in the industry. Titled "The Great Salmon Run," the report was commissioned by the wildlife trade network Traffic.

"Wild salmon could never supply the market demand being met by farmed salmon. A fundamental point of the report is that the debate should not be about wild versus farmed, but whether each method of production is being done right," said Gunnar Knapp, professor of economics at the University of Alaska Anchorage, and one of the study's authors.

The report found that the rapid growth in farmed salmon has dramatically changed the industry, which has, in turn, raised several questions about how wild salmon can stay competitive.

As Icicle's president, Giles also has a seat on the board of the Alaska Seafood Marketing Institute.

The agency receives significant public funding and has launched several marketing campaigns since it was created more than 25 years ago.

Ray Riutta, executive director of the marketing agency, would not comment on whether the institute took issue with Icicle's decision.

"You just have to understand what our mission is: Increase the value of the seafood overall through effective marketing. We don't get involved in the political issues," he said.

The seafood market, like the beef industry, is diverging. Alaska's more expensive wild fish appeals to the upscale market. The marketing institute plans to capitalize on that.

With seafood, as with beef, there are premium and lower-quality products, Riutta pointed out.

"Now the main focus is to get people to appreciate why they should pay a premium for salmon," said Laura Fleming, the institute's spokesperson.

Sen. Gary Stevens, R-Kodiak, an ex-officio board member, said he was promised by Icicle officials they would keep the wild product a priority and the same brand would not be used to market both wild and farmed fish.

"I don't think it should have a negative impact as long as they keep Alaska seafood at the forefront of their marketing," he said.

Giles said each time the company invests in marketing seafood from outside Alaska, it helps Alaska's business. He cited examples of selling Russian king crab or Thai shrimp.

"We think it makes us a stronger company," he said.

Harsila questioned this logic, saying that Alaska fish still compete with farmed fish.

"I could agree with them that it may benefit Icicle Seafoods and their future goals, but I don't think that they are going to gain much support from the wild-salmon fishermen," Harsila said.

He said he could envision some fishermen refusing to sell to Icicle in protest.

The timing of the Icicle announcement coincided with a proposal by the Bush administration to help expand fish farming.

The plan would help make it easier for companies to start fish farming plants in federal waters as a way to compete for a greater share of the $900 billion global market. Alaska fishermen vehemently oppose it.

• Brittany Retherford can be reached at brittany.retherford@juneauempire.com.



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