MA delegation should protect local fishermen from private equity’s grip and ensure accountability in Blue Harvest acquisition

For immediate release: July 22, 2023

MA delegation should protect local fishermen from private equity’s grip and ensure accountability in Blue Harvest acquisition

On the one-year anniversary of Massachusetts senators speaking out about Blue Harvest, we call on the state’s legislators to scrutinize its acquisition, as well as the catch share policies that enable corporate consolidation in fisheries.

Blue Harvest Fisheries, the largest groundfish operation in New England, is back in the news as Bregal Partners, the private equity firm it’s backed by, has announced its divestment from Blue Harvest and several other of its seafood holdings.

It’s been exactly a year since three New England senators, including Massachusetts Senators Elizabeth Warren and Ed Markey, called for greater federal scrutiny of private equity’s expanding dominance over fisheries. Their calls were in response to a ProPublica and New Bedford Light investigation, which exposed Blue Harvest and Bregal’s practice of turning a profit at the expense of fishermen already struggling to stay afloat.

“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,” Jerry Leeman, a local fisherman working for Blue Harvest at the time, told reporter Will Sennott. The article also dug into Bregal’s ownership by a “highly secretive” billionaire family in the Netherlands.

“I intend to work with federal regulators to address these issues and protect Massachusetts fishing families,” Senator Warren stated in July 2022. Meanwhile, Markey vowed to “ensure that we have a robust federal oversight system” and that the “private equity industry can’t take advantage of companies or their workers.”

As a national coalition of commercial fishers drawing attention to catch shares, a federal fisheries policy that opens the door to corporate consolidation, we were heartened to see these calls. However, since 2022, we have seen little movement on this issue in Massachusetts. In fact, Senators Warren and Markey were part of negotiating a USDA seafood purchasing deal for East Coast seafood producers that resulted in a $1.6 million payday to Blue Harvest. The company also received major USDA contracts in 2020 and 2022.

As of 2022, Blue Harvest was the single largest permit holder in the New England groundfish industry, a multispecies fishery that includes Atlantic cod, haddock, and pollock. At the time of the ProPublica and New Bedford Light report, Blue Harvest owned rights to catch 12 percent of groundfish, which amounts to a whopping 46 million pounds of fish.

However, that number is an underestimate, as Blue Harvest also leases fishing rights, or quota, from other permit owners. The National Oceanic and Atmospheric Administration, the federal agency regulating fisheries, does not place restrictions on leasing, nor does it disclose who controls fish quotas. In effect, corporations have an open pathway toward consolidation — and the public, including the members of our regional fishery management councils, has no way of tracking the extent to which that’s happening.

It concerns us that our decision makers don’t know who controls fishing access in our fisheries. Meanwhile, due to catch share programs, we continue to watch fellow fishers get cut off from the fish in their own backyards and pushed out of their livelihoods, not because the fish aren’t there, but simply because they don’t have the capital to compete with private equity firms. This ongoing dynamic runs markedly counter to NOAA’s recently released equity and environmental justice goals.

“From the start, we knew catch shares would lead to corporate consolidation and vertical integration. We started losing people right from the jump,” says Tim Barrett, a member of our coalition who fishes out of Plymouth, MA. In the five years after catch share policy was introduced for New England groundfish, Barrett saw his fishing fleet, Northeast Fisheries Sector 10, shrink from 28 boats to about a dozen. “Now we’re down to one — that’s me. Last man standing. It’s tragic.”

Similar dramatic decreases in groundfish participation are evident in Rhode Island, Connecticut, Maine, and New Hampshire. We have heard from fishermen currently on the water that they estimate only 30 boats are actively fishing for groundfish throughout New England.

Increasingly, private equity firms and big corporate investors are eyeing fisheries and aquaculture for their investments. In 2021, finance investments accounted for over 43 percent of deals within the seafood sector, more than double the 2017 percentage.

This spells bad news for coastal communities and the ocean. Private equity firms like Bregal are known to prioritize short-term profits over the long-term wellbeing of the environment, local communities, and workers. In May, Blue Harvest unceremoniously laid off 64 workers at its fish processing plant in New Bedford, MA.

Though it’s hard to imagine how it could get worse than Bregal, we call on the entire Massachusetts congressional delegation to keep watch over the acquisition of Blue Harvest and ensure accountability. Furthermore, we ask Massachusetts congressional leaders to block any additional USDA money from going into the pockets of companies like Blue Harvest that are controlled by private equity. This is an opportunity for Senators Warren and Markey to make good on their promises to protect the interests of vulnerable communities and to safeguard fairness and economic justice.

Bregal Investments co-founder and private equity veteran Scott Perekslis has already announced he is leaving the firm to try and purchase Bregal’s seafood holdings. If a new private equity firm takes over, it’s safe to assume the investors will prioritize cost-cutting and profit maximization, resulting in low wages, reduced benefits, and limited market access for local fishers. As small-scale, independent operators, we rely on fishing access for our livelihoods and ways of life. And when we’re cut off from fishing resources in our local waters, it harms the social and economic fabric around us.

Coastal communities contribute to the cultural heritage, economic prosperity, and ecological balance of our nation. The growing influence of private equity firms threatens the very essence of our communities, as the relentless pursuit of profits disregards the well-being of fisherfolks, the sustainability of fish stocks, and the long-term health of our oceans.

Intervention from Massachusetts legislators in the future of Blue Harvest can send a powerful message that our ocean commons, coastal communities, and local fishing families deserve support and protection against the greedy grip of private equity.

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The Catch Share Reform Coalition is a group of fishermen who have directly experienced the harms caused by catch share policy. Together with like-minded leaders from around the country we are addressing the inequities caused by catch share policy in order to sustain and enhance the US’s working waterfronts, fishing communities, marine ecosystems, and food security.