European Private Equity Moves In On U.S. Fisheries
From The New Bedford Light, July 6:
INVESTIGATION: How foreign private equity hooked New England’s fishing industry Owned by a billionaire Dutch family, Blue Harvest Fisheries has emerged as a dominant force in the lucrative fishing port of New Bedford. Its business model: benefit from lax antitrust rules and pass costs on to local fishermen.
This article was produced for ProPublica’s Local Reporting Network in partnership with The New Bedford Light. Sign up for Dispatches to get stories like this one as soon as they are published.
Before dawn, Jerry Leeman churned through inky black waters, clutching the wheel of the fishing vessel Harmony.
The 85-foot trawler, deep green and speckled with rust, was returning
from a grueling fishing trip deep into the Atlantic swells. Leeman and
his crew of four had worked 10 consecutive days, 20 hours a day, to haul
in more than 50,000 pounds of fish: pollock, haddock and ocean perch, a
trio known as groundfish in the industry and as whitefish in the
freezer aisle.
As sunrise broke over New Bedford harbor, the fish were offloaded in
plastic crates onto the asphalt dock of Blue Harvest Fisheries, one of
the largest fishing companies on the East Coast. About 390 million
pounds of seafood move each year through New Bedford’s waterfront, the
top-earning commercial fishing port in the nation.
Leeman and his crew are barely sharing in the bounty. On deck, Leeman
held a one-page “settlement sheet,” the fishing industry’s version of a
pay stub. Blue Harvest charges Leeman and his crew for fuel, gear,
leasing of fishing rights, and maintenance on the company-owned vessel.
Across six trips in the past 14 months, Leeman netted about 14 cents a
pound, and the crew, about 7 cents each — a small fraction of the $2.28
per pound that a species like haddock typically fetches at auction.
“It’s a nickel-and-dime game,” said the 40-year-old Leeman, who wore a
flannel shirt beneath foul weather gear and a necklace strung with a
compass, a cross, and three pieces of jade — one piece for each of his
three children. “Tell me how I can catch 50,000 pounds of fish yet I
don’t know what my kids are going to have for dinner.”
Leeman’s lament is a familiar one in New Bedford, an industrial city
tucked below Cape Cod on the south coast of Massachusetts. In recent
years, the port of New Bedford has thrived, generating $11.1 billion in
business revenue, jobs, taxes and personal income in 2018, according to
one study. But a quiet shift is remaking the city and the industry that
sustains it, realizing local fishermen’s deepest fears of losing control
over their livelihood.
Blue Harvest and other companies linked to private equity firms and
foreign investors have taken over much of New England’s fishing
industry. As already harsh working conditions have deteriorated, the new
group of owners has depressed income by pushing expenses onto
fishermen, an investigation by ProPublica and The New Bedford Light has
found. Blue Harvest has also benefited from lax antitrust rules
governing how much fish it can catch.
“What we’re seeing is a
fundamental transformation of the fishing industry. Labor is getting
squeezed and coastal communities are paying the price.”
—Seth Macinko, a former fisherman who’s now an associate professor of marine affairs at the University of Rhode Island
Since it was founded in 2015, Blue Harvest
has been acquiring vessels, fishing permits and processing facilities
up and down the East Coast. It started with the self-proclaimed goal of
“dominance” over the scallop industry. It has expanded into groundfish,
tuna and swordfish, as well as becoming a government contractor, winning
a $16.6 million contract from the U.S. Department of Agriculture this
past February to supply food assistance programs.
The acquisitions are backed by $600 million in capital from Bregal
Partners, a Manhattan-based private equity firm. Bregal is an arm of a firm
owned by a Dutch billionaire family, who are best known for their
multinational clothing company, which maintains a steady track record of
environmental philanthropy and low-wage labor around the globe.
Bregal, its parent company and Blue Harvest President Chip Wilson did
not respond to questions. Wilson said in an email that he has been
“fighting a handful of fires” and that “speaking with the press has been
low on my priority list of late.” He is more concerned “about moving
our strategy forward so that the 200+ folks who work for Blue Harvest
can be confident about their future,” he said.....
