09/01/2019 - 14:36

Lobster lobby angling for alternatives

09/01/2019 - 14:36

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Crayfishermen will consider paying more in royalties to the state government as an alternative to Fisheries Minister Dave Kelly’s planned takeover of new licences, while concerns continue about the fragility of price premiums in the Chinese export market.

Lobster lobby angling for alternatives
Lobster industry leaders will meet in coming days to create an alternative plan to pitch to state government. Photo: Ian Derick, WAFIC

Crayfishermen will consider paying more in royalties to the state government as an alternative to Fisheries Minister Dave Kelly’s planned takeover of new licences, while concerns continue about the fragility of price premiums in the Chinese export market.

Business News understands the Western Rock Lobster Council has told members it is reviewing its options in constructing a counter-proposal, which may include changes to royalty payments.

But that is still in the works, with meetings scheduled in coming weeks to flesh out a plan.

The council provided three alternative options to the government during November negotiations, including a stronger reservation scheme for the domestic market and a special levy, to be charged at a prescribed rate of the average annual beach price.

That levy would be in addition to an existing 5.75 per cent of gross production value royalty fee that has been in operation for most of the past decade.

According to minutes from the discussions, the state government expressed concern that the new levy would be perceived as a tax, leading to political challenges.

Additionally, government representatives said revenue would be dependent on future lobster prices and would create uncertainty for the government, while there was a line in the sand that state ownership of part of the quota would need to be a material component of any model.

Under the government’s current proposal, the production cap for the Western Rock Lobster will rise from 6,300 tonnes to 8,000t over a five-year period.

About 1,365t will be controlled by the state government, to be leased for the purposes of achieving goals such as indigenous participation and supporting tourism.

Fishermen have expressed concern it amounts to a nationalisation of the sector.

One long-time member of the industry told Business News there was concern that major changes could disrupt the premium for local lobsters in the Chinese market.

Founder of lobster fishing business Taupo, John Newby, said he had recently been to China with others involved in the industry to look at the markets developed in recent years.

“At present, Western Australian rock lobster are probably given the premium price of all lobsters in the world,” he said.

“But we were told we’re sitting on the edge of a slippery rock.

“Any hiccups … you could find that the market would drop quite dramatically.”

Mr Newby said WA lobsters achieved a big premium because of higher quality and a greater level of flesh and meat.

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