Bloomberg: Ukraine war bankrupts Alaskan fishery

Alaskan fishermen.
Photo: eugenefishmarket.com

The war in Ukraine has rippled through European debt markets and prompted US import bans on everything from Russian diamonds to vodka. This week it helped send an Alaskan fishing business to bankruptcy, Bloomberg writes.

Whittier Seafood and its Alaskan and Washington affiliates, a group of companies that generated $41 million last year, filed Chapter 11 in Anchorage on August 19. The company sought court protection months after the Russian government took over the company’s Russian crab supplier.

Most of the world’s supply of king and deep-water crab has historically been harvested in Russian waters, and a Whittier affiliate called Marine Fishing International was cut off from its supply of the crustacean after the war began. The sudden shock followed years of declining crab and salmon populations, which has tested Alaska’s fishing industry.

The company’s customers also became less willing to purchase products originating from Russia. That reaction caused the value of MFI’s existing inventory of crabs to fall, forcing the company to sell at lower prices, Whittier founder Aleksey Kozlov said in a court filing.

MFI imported crab from JSC Tefida, a sister company located in the Russian port city of Vladivostok. President Joe Biden and the European Union responded to the war with an embargo on Russian seafood, which rendered MFI “unable to import its primary product,” Kozlov said.

Russian authorities took action, too. Last year, the government revoked Tefida’s fishing licenses. That meant Tefida was unable to provide crab to MFI and MFI, in turn, was unable to serve customers in the US, China, Korea and Japan, according to court documents. The Russian government took more drastic action this year and confiscated Tefida for the state.

Whittier has faced other financial challenges. A key lender alleged Whittier defaulted on loans that were used to fund the construction of a food processing facility in Washington state. The lender also alleged in a court filing that mismanagement is a major factor in Whittier's failure.

read more in our Telegram-channel https://t.me/The_International_Affairs