We explored the possibilities of developing the domestic market to the limit, and considered an advertising campaign the best possible method of appealing to the sentiment of Canadian consumers. It was felt that at the same time we would educate the Canadian housewife and consumer concerning the quality of Canadian canned lobster. The sum of 150,000 was spent as a contribution to help develop the home market for this commodity. It was found however that the home market could not possibly absorb the whole pack, with the result that we had to develop a market in the United States which heretofore had been held by the producers of Russian and Japanese crab meats. We had to displace those products, or fight them in the United States market; and I must say that through the cooperation of good Canadian citizens who were in the business, and who established relations with large chain store distributors in the United States, we succeeded in establishing a market for the whole output of 1941.
This however necessitated organization. We had to convince the fishermen that they should continue to fish rather than ask for relief. We undertook to merchandise and market their output, and for that purpose had to hire help, establish an organization and the necessary machinery. We established an inspection board, because United States buyers would not accept any of our catch unless a guarantee of inspection was given by the government.
We purchased from the fishermen lobster to the value of $88,043.83, making it a condition that the packers should pay the primary producer a reasonable price. We considered it advisable to step up the price considerably, and felt that we had carried out that principle by establishing a minimum price of 51 cents per pound for live lobster. Prices had previously ranged between 24 and 4 cents, the latter price being the maximum which in very special cases had been paid to fishermen supplying lobsters sold for canning. Before the year was over the price had risen considerably above 5 cents. We had no difficulty therefore in this respect. The price to the primary producer was doubled at the start, and before the season was over it had increased considerably. Through the difference between the amount we paid the canner and the price we received in the market, we derived a profit of about $9,000. The amounts we actually expended went for inspection, administration, machinery, labels, and a labelling machine we had to buy to label the cans with the government certificate. Those operations had to be carried on in the following year.
The actual deficit in the whole transaction during the year was $27,000; but the inventory showed that we had to carry an over-supply of labels and a certain amount of machinery, and we had to pay rent for a warehouse. We thought it was not fair to make that charge to the producers, because this was in the nature of an experiment, something which was undertaken for the first time, and should not be charged to the primary producer or the packer, who has shown a willingness to cooperate. It was not felt that in the first year they should be asked to absorb the whole of the overhead and cost of establishing the industry. It is not altogether fair, therefore, to say that this was an improvident transaction.