What is the Maine Lobster Marketing Collaborative?

First published in Landings, August, 2013.

LD 486, An Act to Provide for the Effective Marketing and Promotion of Maine Lobster was signed into law by Governor LePage in July. The act creates a new public organization to promote and market Maine lobster called the Maine Lobster Marketing Collaborative (MLMC). The existing Maine Lobster Promotion Council will be dissolved.

We sat down with Department of Marine Resources Commissioner Patrick Keliher to review MLMC’s purpose and organizational structure.

Q:  Commissioner, where did the idea for a new lobster promotion group come from?

A:  The Lobster Advisory Council started looking at better ways to market Maine lobster two years ago. It formed a subcommittee and hired John Sauve of the Food and Wellness Group in Portland to create a strategy. That was the beginning of the whole concept.

Q:  What is the purpose of the new Collaborative?

A:  It’s straightforward: to increase demand for Maine lobster with the end goal of driving up the boat price. The old Maine Lobster Promotion Council did not have enough money to do that. The Collaborative does.

Q:  What is the Collaborative’s life span?

A:  The MLMC has a sunset clause, which means it must be reauthorized by the Legislature after five years (in 2018). That came through loud and clear during our meetings with lobstermen this past January: if it doesn’t work, get rid of it. So if lobstermen show up to the Legislature [when the Collaborative is up for reauthorization] and say that this thing is no good, it won’t continue.

Q:  What is the budget for the Collaborative?

A:  In three years, it will be between $2.25 million and $2.5 million. That’s a far cry above the $350,000 allotted to the MLPC and is in line with the marketing budget for other natural resources. It starts out at $750k for the first year, $1.5 million in the second year, and $2.25 million for years 3 through 5.

Q:  Where does that money come from?

A:  Annual surcharges on harvester, dealer and processor licenses. Those charges gradually increase for each of the first three years. So, for example, in the first year the surcharges range from $31.25 to $93.75 for lobstermen, and $250 for a business with a wholesale seafood license with lobster permit. By 2016, that amount caps at from $165 to $240 for lobstermen, and about $1,000 to $4,000 for lobster processors. The surcharges then stay at that level through to 2018, although I must annually review the surcharges starting in 2014.

Q:  And where does that money go?

A:  To the Lobster Promotion Fund, which is held by DMR. DMR then moves the money to the MLMC where it must be used for the purposes of the Collaborative. Remember, the MLMC is not part of state government. It is a public instrumentality, which means its money can’t be touched by other parts of state government or the Legislature.

Q:  So when does Collaborative start and who will be serving on it?

A:  The law will come into effect in mid-October, 2013. The MLMC will have a new, 11-member board of directors and new staff. The board will be made up of nine people appointed by me. Of those nine, four will represent the state’s lobster zone councils, two will be from wholesale seafood processors and one will be from the state’s lobster dealers. The two remaining seats will be public seats. Everyone serves a three-year term. Representatives of the Department of Economic and Community Development and DMR also will be ex officio members of the Collaborative.

Each of the seven lobster zone councils will put together a list of up to three people they think should serve on the Collaborative. The Lobster Advisory Council will put together a list of people active as seafood processors or lobster dealers. And they will also make a list of people with marketing and promotion or retail sales experience to be possible public members. And I will choose the directors based on those lists.

Q:  It sounds like there’s quite a bit of organizing to be done before October.

A:  Yes, there certainly is! DMR is working right now with the existing Promotion Council on making this transition. I’m looking at a lot of the past work that’s been done on lobster marketing and economics in order to front load the process. I want the Collaborative to hit the ground running.

Q:  That brings us to a question that many people are asking: what should lobstermen expect to see from this Collaborative?

A:  We all know that nothing is going to happen overnight. The law says explicitly what the Collaborative will do: undertake promotional marketing programs in cooperation with the lobster industry; promote national and international markets for Maine lobsters; provide material and technical assistance to businesses seeking to market Maine lobsters; conduct other efforts as necessary to increase the sales of lobsters harvested or processed in Maine. By January of next year, the MLMC has to present a detailed three-year marketing plan on how it’s going to do this to the Legislature’s Marine Resources Committee.

The MLMC will need more than a couple of months to show progress in achieving its goals. But built in to the law are ways to measure its effect. The MLMC must have an annual audit of its expenditures, and provide an annual report of its activities to the Marine Resources Committee and the Lobster Advisory Council, and to a meeting of Maine’s lobstermen, which probably will take place at the annual Fishermen’s Forum. Furthermore, the MLMC must undergo a third-party, independent audit for the effectiveness of all its activities from 2014 to 2017. Based on that audit and the recommendations of the Lobster Advisory Council, the Marine Resources Committee will decide whether to renew the MLMC in 2018.

Q:  What do you think is most important for people to understand about the new Collaborative?

A:  That improving the price paid for Maine lobster really has to be a shared process. The MLMC will meet at least four times a year or more. The meetings are open to the public. Anyone can and should come to make their opinions known.