State probes seafood merger plan

JAPANESE FIRMS: Alaska fears consolidation would squeeze prices paid for fish.

State lawyers have opened an antitrust investigation into the pending merger of two giant Japanese seafood companies with major processing and fishing operations in Alaska.

Officials decided last week to begin the probe, said Cora Crome, fisheries policy adviser to Gov. Sarah Palin.

The decision comes after Palin sent letters last month to the U.S. Justice Department’s Antitrust Division and the Federal Trade Commission, urging them to closely scrutinize the merger.

Palin cited a long list of worries, including the potential for the combined company to consolidate Alaska processing plants, and for local fishermen to receive lower prices for their catches.

Japanese seafood titans Maruha and Nichiro announced in December they plan to merge by October. Media reports out of Japan characterize Maruha and Nichiro as Japan’s largest and third-largest seafood suppliers, respectively.

The state’s investigation will be led by Ed Sniffen, a senior assistant attorney general in Anchorage, Crome said.

“We’ve certainly heard a lot of concerns,” she said, about what the Japanese merger means for Alaska.

“Unfortunately, state law requires that we keep our antitrust investigations confidential, so I can’t share too much information,” Sniffen said Monday. “We will be looking into whether the proposed merger violates any of Alaska’s antitrust laws. Right now, we are in the information-gathering process.”

Such investigations are relatively rare because major company mergers are uncommon in Alaska, Sniffen said.

In a handful of cases, the state — in tandem with federal officials — has demanded and won concessions designed to protect consumers or the state’s interests.

In 2000, the state and the FTC settled major antitrust concerns surrounding the union of two global oil companies, BP and Arco. BP was required to divest Arco’s Alaska assets, and oil companies agreed to a North Slope environmental cleanup, yearly charitable donations and other commitments.

In 1999, former Attorney General Bruce Botelho negotiated an antitrust agreement requiring California-based grocery store giant Safeway to spin off seven Alaska stores as part of its takeover of Carrs, the dominant local supermarket chain.

Executives with Maruha and Nichiro could not be reached for comment after hours Monday.

Maruha’s Alaska holdings include the huge Westward and Alyeska processing plants at Dutch Harbor, which is the nation’s biggest port for seafood landings. Maruha also operates the Western Alaska plant in Kodiak. Nichiro owns Peter Pan Seafoods, which operates processing plants in Dillingham, Port Moller, King Cove and Valdez.

Maruha and Nichiro also are involved with three offshore pollock processing vessels known as motherships.

source

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