Canadian scallop quota valued at $200M sells to 3 Nova Scotia companies

In a blockbuster seafood deal, St. John's-based Ocean Choice International (OCI) has sold its Canadian offshore scallop quota worth an estimated $200 million to three Nova Scotia companies.

Ocean Choice held 16.77 per centof the offshore scallop quota, which is fished mostly on Georges Bank off southern Nova Scotia.

A key driver in the sale was the sinking of the company's factory trawler Atlantic Destiny on Georges Bank in March 2021.

CEO Martin Sullivan says they opted not to replace it.

"We had to make a decision on a new vessel and with the current economic climate, interest rates and everything it was a hard decision to make," Sullivan told CBC News.

"We were looking at our options and we talked to these three Nova Scotia companies that have been industry partners of ours for a long time."

Three Nova Scotia companies

The quota has been sold to Comeau's Sea Foods of Saulnierville, LaHave Seafoods nearLunenburg and Mersey Seafoods in Liverpool.

Nova Scotia companies have harvested OCI scallop quota since the sinking.

"It's bittersweet for us to be honest with you. We never want to sell quota. But you know if we were, we wanted to give an opportunity to the guys in the industry that we've known for a long time. We wanted to see if we could work a deal with them and we didn't talk to anybody else," Sullivan said in an interview after the announcement.

Financial terms of the sales agreement were not disclosed but "permanent" scallop quota sells for over $100 per pound, putting the value of the OCI share at around $200 million.

The deal, announced Thursday, was six months in the making.

Mersey Seafoods was one of the companies fishing OCI's quota.

'It's just a great investment,' says Mersey president

"It's just a great investment for the company and hopefully sends a strong sign to everyone at Mersey that we're in this for the long haul," Mersey president Greg Simpson told CBC News.

Five years ago, Mersey opened a new scallop processing plant at its Nova Scotia headquarters.

Simpson says the purchase doubles its current scallop quota and should ensure its two scallop vessels, Fortune Lady and Mersey Seven, are fully utilized.

"We think we'll be able to catch most if not all of this additional quota. So our crews got the call today and were pretty excited about what this means for the rest of the year and into the future," he said.

Nova Scotia companies now hold the entire Canadian offshore scallop quota of 5,205 tonnes. Landings were valued at $166million in 2023.

Prior to the sale, Clearwater Seafoods held 43.8 per cent, Adams and Knickle 9.77 per cent, Comeau's 16.68 percent, LaHave 5.92 percent, Mersey seven per cent and OCI 16.77 per cent.

Unspoken vote of confidence for DFO

The deal includes a sales and marketing agreement with Mersey Seafoods that will see Ocean Choice continue to sell Canadian sea scallops to its global customer base.

Ocean Choice is consolidating its fishing operations in Newfoundland and Labrador.

Under the deal, Ocean Choice is acquiring Newfoundland and Labrador offshore quota for Greenland halibut and northern cod from Mersey, and Greenland halibut, Northern cod and redfish from LaHave.

LaHave is acquiring Ocean Choice's Nova Scotia offshore quota for pollock, haddock, and flounder as well as the company's assets in Riverport, N.S.,according to the agreement.

The investment is also an unspoken vote of confidence in the management of the scallop fishery by Canada's Department of Fisheries and Oceans.

The department has been under fire for its management of other fisheries in the region including the baby eel or elver fishery. It announced last week it intends to cancel the upcoming season because it cannot control poaching.