FFAW Calls for Halt to Acquisition of Quinlan Brothers by Royal Greenland
September 22, 2020
ST. JOHN’S, NL – FFAW is calling for an immediate halt to the acquisition of Quinlan Brothers by Royal Greenland, a fish processing company wholly owned by the Government of Greenland, pending a debate and vote in the House of Assembly on the merger.
“The purchase of Quinlan Brothers by Royal Greenland creates the largest processing company in the history of this province, in terms of percentage of the processing sector under its control,” says Keith Sullivan, President of FFAW. “The elimination of Quinlan Brothers as competition means that three large processing companies now control approximately 75% of all fish processing in the province, and close to 85% of the lucrative shellfish processing in the province, which has an export value in excess of $500 million per year.”
It is well-established that competition, wages, and price suffers as corporate concentration increases in a free-market system. Fish harvesters in this province are already feeling the effects of a concentrated processing sector as companies have worked together to limit the ability of harvesters to change buyers. Fewer processing companies made it easier for companies to engage in an illegal lockout of shrimp harvesters this year and of cod harvesters in 2019.
The fact that Royal Greenland is a crown company and that the Government of Greenland is its sole shareholder is of great concern to fish harvesters. “A company has to do what is in the best interests of its shareholder, which in this case means the government of Greenland,” Sullivan explained. “The Greenlandic fishery is a direct competitor with the Newfoundland and Labrador fishery, fishing many of the same species and selling into the same markets. It is inevitable that the interests of the Government of Greenland and its people will conflict with the interests of fish harvesters in this province. In that conflict, fish harvesters in Newfoundland and Labrador will likely get the short-end of the stick.”
There is also the issue of illegal controlling agreements that it is widely believed both Quinlan Brothers and Royal Greenland are involved in. “Quinlan Brothers is thought to be the processing company most actively involved in illegal controlling agreements, whereby a person or corporation other than the named license-holder controls, influences and benefits from the license,” Sullivan states. “These agreements stifle competition and are the biggest impediment to new recruitment into the fishery, as fishing license prices have become so inflated so as to be out of the financial reach of new harvesters.”
The impact that this acquisition will have on tens of thousands of workers spread out over 500 communities in this province means that there must be more debate and analysis than that which was performed by the Fish Processing Licensing Board. In fact, the Licensing Board noted to the Minister of Fisheries, Forestry and Aquaculture, Elvis Loveless, that there were no letters of objections to the Royal Greenland takeover of Quinlan Brothers, which is not true. FFAW objected in writing and spent three hours meeting with the Board in person setting forth our objections.
“If we are going to upend the economics of the fishery in this province, there must be more than just a recommendation from a four-person unelected board that was incorrect in its reporting. It is imperative that this acquisition be debated on the floor of the House of Assembly and a vote on a motion for or against this Royal Greenland-Quinlan Brothers purchase needs to be held,” Sullivan concluded. “The people of Newfoundland and Labrador need to know whether their elected representatives are with the hard-working people of this province, or whether they are with enhanced corporate concentration with a foreign-owned company at the head of that spear.
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