Despite $10M cost, P.E.I. considers breaking lobster processing deal

P.E.I. is thinking about breaking its deal with Ocean Choice International so more lobster processors could open.

No new lobster processing licences was part of the deal OCI made with government when it bought up the assets of Polar Foods in 2004. It left the company with a near monopoly in P.E.I. lobster processing.

Fishermen have been asking government to break the deal for years because they think more processors would mean higher prices for them. With prices this year at their lowest in two decades, they're increasing the pressure.

"I'd like to see them break the contract with Ocean Choice. That's what everybody wants to see. It's no good," Covehead fisherman Robbie Moore told CBC News on Wednesday.

"We're giving lobsters away [for $2.75] a pound, $3. That's no good."

Increasing competition at the wharf

Fishermen argue more processors would lead to more competition on the wharf for the catch fishermen bring in, and so better prices. Others in the industry argue the market for lobster is so depressed that more processors wouldn't lead to higher prices.

Fisheries Minister Neil LeClair wouldn't say what breaking the contract would cost, but a source said it would be about $10 million.

LeClair confirms the government has discussed the possibility of breaking the deal, but it has reservations.

"We need the option to get more processors in here. If that's going to fix the industry, and create more sale for our products and a better price, then I'm all for that," said LeClair.

"When you break a contract, you don't know what's going to come back at you as far as maybe suing. Certainly we'd lose out on the amount of money that's involved in the contract."

LeClair said it's too late in the season to gain any benefit from breaking the deal this year, but it is one of many ideas government will be looking at for next year.

No one from OCI was available for comment Wednesday.