A veteran of WA’s rock lobster industry has hit out at a deal that allowed a Chinese conglomerate to buy local fishing rights.
Peter Prideaux said the deal between Kailis Bros and Legend Holdings to create KB Foods set an alarming precedent for foreign ownership in the fishery.
“The Western Rock Lobster Fishery is one of the most valuable fisheries in the world,” he said. “Competition for control, primarily by processors, and an ever smaller band of surviving fishers has driven access costs through the roof.
“Pot prices and leasing costs have increased six-fold in about five years. This is not an industry suffering from lack of investment capital, in fact, quite to the contrary.”
Mr Prideaux said the Legend deal effectively gave a foreign entity control of a highly valuable WA commodity.
“It is only a small parcel or quota, but it has been given the nod by the Foreign Investment Review Board and a principle has been established,” he said.
Kim Colero, chairman of the Western Rock Lobster Council. Picture: Danella Bevis/The West Australian
A spokesman for KB Foods said the quota licences it owned represented about 0.2 per cent of the total in WA.
“The feedback from fishermen about Legend Holdings’ investment in KB Foods has been overwhelmingly positive due to the opportunity it creates to expand WA seafood products into new markets in China and other parts of Asia,” he said.
Legend, best known for making Lenovo computers, took on $180 million in debt to fund its buyout of most of the Kailis Bros’ seafood business and provide cash for growth projects. Under the deal, the Kailis family sold 90 per cent of its seafood processing, wholesale and export business.
Industry experts estimate the 780,000 licence units, or 78,000 pots in the old terminology, available in the WA fishery are worth about $5 billion in total.
The industry met in Fremantle and Geraldton this week to discuss the total allowable catch quota for next year, with the Western Rock Lobster Council set to make a recommendation to Fisheries Minister Joe Francis. Debate has centred on whether to leave the TAC at 6000 tonnes or increase it.
WRLC chairman Kim Colero said there was no register to provide an accurate picture of who owned licences in WA.
“One of the things we have been arguing for over many years is a clear register of who owns what. That is easier said than done because there are companies, behind companies, behind companies,” he said.
It is estimated few licences are foreign-owned and that several hundred families control about 90 per cent. The WRLC has commissioned a risk and value chain analysis of the industry, which will cover foreign ownership, security of licences and heavy reliance on the Chinese market. $5b The total value of licences in the Western Rock Lobster Fishery