“The lobster business is very complicated: what anybody says is right, depending on how you look at it,” says Portland lobster dealer Peter McAleney.
The president of the Maine Lobster Dealers Association, McAleney owns and operates New Meadows Lobster, at the end of the Portland Pier, practically next door to DiMillo’s on Commercial Street in Portland. He is the sixth generation of McAleneys who have worked on Commercial Street, not as fishermen or lobster or seafood dealers (his father was in the grocery business) but originally as the owners of the draft horses that lugged freight from ships to the warehouses that lined the waterfront.
Born in South Portland, in 1947, McAleney went to Northeast Louisiana State University where he played basketball and met his future wife, Kathleen, a native Louisianan.
He got into the lobster business purely by accident. Back in Maine in 1977 McAleney was living in South Portland and teaching. “I came down here,” McAleney said, pointing to his wharf, “to buy lobsters from a friend of mine, an old school teacher.” His friend asked, “Do you want to get in the business with me?” McAleney replied, “Yes,” and recalled, “So I started working, and he took a month off. “When he took that month off, I should have known what I was in for. Instead, a year later [with a silent partner] I bought him out and I’ve been working seven days a week since.”
Not long after that, the nineteenth-century wharf and building collapsed into the water. McAleney and his partner wrote a grant proposal and got a Small Business Administration loan with a two percent interest rate. With that in hand, he said, “We really expanded hard and built the tank house.”
Back in 1977 when he started, the lobster business was not as competitive as it is now: there weren’t as many dealers or as many lobstermen (maybe 4,000 in the state) but some of those 4,000 fished 1,000 or more traps, and many of those traps were sunk in Casco Bay. He went after markets across the country and overseas. He went after supermarkets and talked them into holding specials.
He’s worked a long time in this business and he has strong feelings about the regular dealer who, when business is slow or times are bad, has to keep his or her employees on and keep paying the overhead. This is part of the cost of doing business, but McAleney has a hard time with what he calls “The guys with a pickup truck, a hound dog, and battery-operated scales. They have no overhead, so they can pay more cash. They bring the lobster in to a public wharf; the Canadian processors give them an instant check. It doesn’t take much collateral to run such a business.
“They’re not doing the industry any good,” he said, “because they’re not marketing the product, they’re just flipping the product versus the guy who has property, holds the product, and has a tank house and employees, and who has to pay health insurance and business insurance and workman’s comp.”
In other words, it’s not just that Maine lobster costs $50 in California, according to McAleney; the shipping and handling fees from Maine to California go into that eventual $50 price. The cost of laundering that white tablecloth they always talk about, the vegetables on the plate, the chef, the waiters, the dishwasher all go into that cost. And you have to add in money for shrinkage — the amount of lobsters that die en route from Maine to wherever — and the cost of shipping the lobsters from the airport to the restaurant, which McAleney said is another dollar per pound at least. If the plane is late, it costs more to have the driver sit there waiting.
Using an elegant Portland restaurant as an example, McAleney started with a hypothetical lobster costing the restaurant $8 per pound. That eight dollars is not the price paid to fishermen, called the boat price, but the price the restaurant paid, and, to make it more interesting and expensive, he suggested, “It’s a two-pound lobster, so that’s $16. They [the restaurant] multiply that cost by three: that’s what a two-pound lobster costs in the restaurant. That lobster costs $48 in Portland. It’s a gourmet restaurant with high overhead: white linen tablecloth, the guy in the tuxedo who comes to your table, him with two other guys.”
He went on, “Now, you do get your potato, your salad; and the restaurant is a beautiful restaurant: chandeliers; you’ve got a kitchen staff that is unbelievable, a four- or five-star restaurant as opposed to, in Bar Harbor you can go [to a place] along the side of the road where a guy has a picnic table and a cooker. He has no overhead. He adds maybe four or five dollars onto the price he pays, [which in this hypothetical case is $8 per lb.], so for maybe $12 or 14,” he said, “you get your boiled or steamed lobster.
“The lobster doesn’t taste any different,” he said. “It’s all overhead.”
McAleney deals with lobstermen every day and said, “You never hear a lobsterman say, `I’ve got to buy rope or I’ve got to buy gloves,’ and they do. And I realize that. If you get a fisherman and a dealer to sit down side by side, they’ll agree. If they start hashing things out, they talk. But all you hear are the three major things: bait, gas and boat payments. There is so much hidden cost in the industry, it’s unbelievable.”
He makes another point: “If the boat price goes up, whatever amount, the fixed costs remain the same. The only change is the price to the fisherman. When the guy who flips the lobster flips it, that’s it, the true value of the lobster isn’t reached. When we market a lobster properly, the value of the lobster zooms upward, and many people benefit from the Maine lobster.”
Canadian competition is another problem. “Years ago when the industry was set up,” McAleney said, “the Canadians would truck [the lobsters] down here out of Canada up to some dealers here in the state, so we’d sell it to restaurants and stuff like that. Now, thanks to the Boston Seafood Show, the Canadians jumped over us, and they’re selling to our customers.” He explained, “Our customers go to the seafood show — you can’t blame them. But how do we survive? Does that mean I have to lower the boat price to our fishermen, so I can compete? I can’t buy the Canadian stuff, because I pay the same price as my customers do. We can always find new customers, but the Canadians will find out who they are.”
He wonders if the Canadian government subsidizes his Canadian competition because his customers on the West Coast can have their product delivered to the door for the same price he pays to ship it to a major California airport.
“What bugs us,” he said, “is, we quote a customer from Texas a price F.O.B. Boston, which means he has to pay the freight from Boston to Texas, but the Canadians can quote him the same price, delivered to his door. They’re managing to sell them a lot cheaper. This has happened a lot. Doesn’t seem very fair.”
Then there’s the question of selling the Maine shedder, or “new shell” lobster. People ask McAleney why lobster dealers don’t wait and sell the lobster when it’s hard, as they do in Canada. But McAleney tells them, “If the lobstermen didn’t catch lobster in June, July and August, when they taste great but the quality is poor, and they waited till the shell got harder, the problem is, there [would be] no tourists to buy them. That’s all there is to it.”
He thinks the state should do more for the industry in the way of promotion. “We don’t have a problem selling quality Maine lobster,” he said. He’s explained over and over that new shell lobster can’t be shipped very far because it’s too delicate.
“Promote it more in the summertime,” he suggested. The dealers would sell more, and the fishermen would make more money because there would be higher demand. “Create a demand for the product — I never have any problem selling top quality lobster all over the world, but there are only a few markets for new shell lobster. It is just a New England product.”
He explained that the lobster industry provides many services to the state, and it would be in the state’s interest to help the industry by promoting new shell lobster in the tourist season.
“Those 7,000 lobstermen provide an unbelievable amount of services,” he said. “I would hate to think what would happen if all 7,000 lobstermen left, if they all went into the construction business. Those 7,000 men [and women] provide a job for me, as a dealer, because I have to sell their product, the guy that makes the traps, that sells them gas. The fishermen are right: it starts with them. I provide the service to them by selling their product so they can get paid.”
He said he doesn’t know the number of people in the chain between the fisherman and the ultimate consumer: how many people have touched that lobster and made money from it, but he knows the number is mind-boggling. He is particularly irritated at having the state bird instead of the lobster on the license plate. He thinks that no one should have to pay extra to buy a license plate emblazoned with the animal that most enriches the state’s economy. “I’ve traveled all over the place in the wintertime,” he said. “Not one person has asked me about the goddam chickadee.”