Posted on: Thursday, May 24, 2001

Oceanic Institute undercuts fish sales, lawsuit says

By John Duchemin
Advertiser Staff Writer

A Kona fish hatchery has sued the nonprofit O'ahu research organization Oceanic Institute, claiming it flooded local markets with thousands of inexpensive fish bred for research, undercut for-profit suppliers and endangered the local fresh-fish industry.

In a lawsuit filed yesterday in U.S. District Court in Honolulu, Pacific Harvest Inc. of Kailua claims that Oceanic Institute is selling moi, or Pacific threadfin, to supermarkets at prices far below its production costs, hampering profitable operations by commercial fisheries.

Pacific Harvest, which operates the only other moi nursery in the state, also claimed in the suit that the institute is selling hundreds of thousands of baby moi at low prices to local fisheries, undercutting Pacific Harvest by about 50 percent.

The company wants the court to bar the institute from producing moi until the lawsuit is resolved, said Robert Badger, Pacific Harvest's lawyer.

Oceanic Institute officials said they would not comment on the suit until they could see a copy.

"Oceanic Institute is an organization of high integrity, professionalism and general concern for the public interest," said Thomas Farewell, president of the 60-scientist institute, which has operated a marine research facility near Makapu'u since 1960.

Oceanic Institute is breeding moi in underwater cages off 'Ewa Beach, part of a federally financed project to prove moi's viability as a farmed product.

"We abide by all laws and regulations in the course of our work, and I'm sure whatever is alleged will get worked out," Farewell said.

Pacific Harvest claimed that the institute's selling practices would drive for-profit fisheries out of the moi market.

"All I ask for is a level playing field," said Benjamin Krause, founder and president of Pacific Harvest, which since 1997 has operated out of the Natural Energy Laboratories of Hawai'i near the Kona airport.

Moi is considered a "depleted" fish in Hawai'i. Local stock was depleted in the 1960s because of overfishing, said the Oceanic's Farewell.

Since the institute began breeding moi — first in land-enclosed nurseries, then in open-ocean cages — the moi industry has revived somewhat. The institute has supplied more than 250,000 immature "fingerling" moi to about eight local fisheries, Farewell said.

The institute has shared its research data and cultivation procedures with companies such as Pacific Harvest. Krause said he has invested and borrowed about $1 million to get his business off the ground. Pacific Harvest can now produce thousands of moi fingerlings.

When the institute began breeding hundreds of thousands of moi in its cages last year, it assured local fisheries that it would not compete with them in local markets, the lawsuit said.

Pacific Harvest will seek upward of $3 million in relief, plus millions more in punitive damages.