By the time that lobster gets to your plate, several people have already taken a nibble.

Lobstermen, wholesale dealers and retailers all get a cut of the final price as the state’s iconic seafood moves from a trap at the bottom of the Gulf of Maine to the dock and into a retailer’s lobster tank.

With lobstermen complaining that the price they’ve been getting recently doesn’t even cover their costs, these markups are getting a lot of attention.

Dane Somers, executive director of the Maine Lobster Promotion Council, said moving lobster to a Mainer’s dinner table is pretty straightforward — at least locally — as a handful of people all get a cut. These include the lobsterman, a dealer, in some cases a second dealer, and finally a retailer.

On the global stage, however, “it’s surprisingly complex,” Somers said. “Once you get outside the local market, it gets very complicated” as shipping costs, duties and other fees get added.

People in the industry are reluctant to talk about anything other than retail prices, and even these vary widely. Lobstermen said they’re getting historically low prices for their catch because of a glut of soft-shell lobsters on the market. Dealers say they get no more — or less — when prices rise or fall. Retailers, meanwhile, say they only charge what the market can bear.

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Lobstermen say they’re getting as little as $2 a pound dockside for lobster, although Robert Bayer, the head of the University of Maine’s Lobster Institute, said it’s more likely $2.50 to $2.75 a pound.

Even using Bayer’s $2.75-a-pound figure, lobstermen’s complaints about losing money seems to be borne out by a 2010 study of U.S. lobster pricing by Gardner Pinfold, a Canadian market research firm. That study suggested that costs such as labor, fuel, gear, bait, insurance, repairs and fees add up to more than $3 per pound.

Bayer said that after the lobsterman gets paid, a dealer typically adds 50 cents a pound as his or her cut for moving lobster along in the market. Sometimes, he said, two dealers are involved, and they’ll each get a cut. The retailer’s markup is usually 50 cents to $1 a pound, he said, although the prices being charged by some retailers suggest their take is a little more right now.

All those margins are probably shrinking now, given the glut on the market, Bayer said.

“There’s always wiggle room if you’ve got product you want to move,” he said, especially if the product can only last a few days in a tank before it’s worthless.

The Gardner Pinfold study found that the way lobsters are bought and sold is inherently flawed, and the normal law of supply and demand “fails more or less completely” when it comes to lobster.

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The study said that producers — in this case, lobstermen — normally would be expected to cut back on supply as demand ebbs and prices fall. However, regardless of price, “when the season starts, everyone goes fishing and fishes hard to maximize their share of the finite supply,” the study said. “Indeed, fishing may be more aggressive when prices are low to try to maintain income.”

People in the industry say they hope things will get better in a few weeks, as shells on what are now soft-shell lobsters harden and they can be shipped greater distances. Increasing the size of the market, they say, will help ease the glut and allow prices to firm up.

Somers said the industry also hopes to reinvigorate demand by launching a regional advertising campaign next month and increasing next year’s marketing budget from the current $375,000 to about $3 million.

He said a bill to increase the promotion council’s surcharge on lobstermen’s and dealers’ licenses to raise more money for marketing will be introduced in the Legislature early next year.

“The only way to exercise any control over our own destiny is to invest more to increase demand,” he said. “To do nothing is no longer an option. That’s not working for us.”


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