San Pedro Fishermen, Hurt by Closing of Canneries, Want to Buy One of Their Own : Boat Owners Seek Deal With Star-Kist

Bruised in recent years as one cannery after another has shut down, a group of San Pedro fishermen is angling to purchase one of the last remaining fish processing plants in Los Angeles.

The San Pedro-based Fisherman’s Cooperative Assn., a group of about 30 boat owners who net most of the fish caught off the local coastline, has entered final negotiations with Star-Kist Foods to purchase a 170,000-square-foot cannery on the Port of Los Angeles’ Terminal Island. Both sides said the sale could be completed within several weeks.

Neither the cooperative nor Star-Kist would discuss a possible sale price or other details of the negotiations. The cannery stands on land leased from the Port of Los Angeles.

Frank Iacono, the cooperative’s 65-year-old general manager and a fisherman for 42 years before retiring nine years ago, said 25 of its members have agreed to pay $20,000 each toward a down payment for the cannery. Five other fishermen have indicated an interest in investing the same amount, he said.

Star-Kist announced in December that it would close the cannery and lay off 200 workers, possibly as early as this month, to consolidate its canning of mackerel as pet food at an underutilized cannery it owns on Terminal Island.

Ensures Storage Facilities

The company said it was halting the production of mackerel for human consumption because it was unprofitable. Sales of the company’s Eatwell brand mackerel have dropped sharply, largely because the price of canned tuna has declined and consumers have opted for the latter, Star-Kist said.

The cannery purchase is important to the boat owners because it will ensure them a place to store and process the fish they catch. Besides Star-Kist, only one other cannery still operates a cannery locally, Pan Pacific Fisheries, which processes both mackerel and tuna. At one time, more than a dozen canneries operated in the area. Many have closed because they were unable to compete with lower-cost canneries in Asia and elsewhere.

“We didn’t know who would be taking over the plant and what they would do if they did,” Iacano said. “And we knew we needed that plant to keep our boats alive. There used to be enough canneries here to absorb all the fish the boats caught. But that has changed.”

The cannery purchase is the latest in a series of efforts by the 50-year-old cooperative--whose membership has dwindled from a high of about 170 in the early 1950s to the current 30 or so--to find new markets for its catch.

Last winter, for example, cooperative members sold more than 50,000 pounds of bluefin tuna, a premium variety, directly to a Tokyo fish buyer instead of going through local wholesalers, who were offering a lower price.

But most of the cooperative’s efforts have been aimed at finding new foreign outlets for mackerel. An oily fish that has never been popular among consumers in the United States, mackerel has become the fleet’s predominant catch in recent years as the market for anchovies--once their staple catch--declined.

In 1985--the last year for which figures are available--mackerel represented 81% of the total fish caught and 67% of revenues for fishermen plying the coastline from Monterey to the Mexican border, the state Fish and Game Department reported.

That translated into 96 million pounds of mackerel, representing $8 million in revenue for the fishermen, according to the National Marine Fisheries Service, a branch of the U.S. Commerce Department. The San Pedro cooperative’s members landed the lion’s share of the mackerel.

Mackerel is “the backbone of our industry right now,” said 47-year-old Frank Vuoso, who followed in the footsteps of his father and grandfather to become a commercial fisherman.

Vuoso said that although fishermen do not have much trouble catching mackerel these days, they are limited by quotas set by canneries in response to market demand. Hence the fishermen often remain anchored in port when they could be working.

“We’ll catch 60 or 70 tons a day and we’ll be done for the week,” Vuoso said. “We could go fishing every day and catch that.”

Although a proposed deal to sell mackerel to the Soviet Union recently fell through because the price was too low, the cooperative last year began selling mackerel to the Fiji Islands, Iacono said. During the past three months, it has exported about 3,000 tons to Fiji.

Preserving the Fleet

The cooperative is looking at other foreign markets such as New Guinea, where mackerel is a staple, but are hampered because it does not have enough storage space to hold the fish for future sales--a problem that could be eased by the cannery purchase, he said.

Roy Scharer, a group vice president for Star-Kist’s pet food division, said the company had three other candidates that were interested in purchasing the cannery before it decided to negotiate exclusively with the cooperative. He would not identify the other potential buyers.

Scharer said the company likes the idea of selling the cannery to the cooperative because Star-Kist wants to make sure that the local fishing fleet can continue supplying it with fish for pet food.

Of the 700 people now employed at the cannery, about 500 workers will keep their jobs when the company’s pet food operations are consolidated at the former tuna cannery. The 200 workers involved in processing mackerel for human consumption will lose their jobs unless those operations continue at the cannery under new ownership.

Cooperative members said that even though sales of Star-Kist’s Eatwell brand of canned mackerel have declined by about half in the past five years to 300,000 cases annually, they might be able to continue canning the product by cutting production costs. Star-Kist has indicated that it would be interested in distributing the product if the cooperative can produce it at a lower cost.

Iacono said the cooperative, which is willing to operate the cannery on a break-even basis for several years, hopes to “salvage as many jobs as it can.” That means the cooperative will probably ask for concessions from the workers’ union, the United Industrial Workers Local 24.

Steve Edney, national director of the union, said the union would approach any discussions with the cooperative with an “open mind” geared toward keeping the cannery open and the workers employed.