The war waged by the Russian Federation in Ukraine has seriously affected European debt markets and caused the US to impose a ban on the import of various goods from Russia, such as diamonds and vodka. It also reportedly led to the bankruptcy of fishing companies in Alaska Bloomberg.
Specifically, the Whittier Seafood Group of Companies and its Alaska and Washington affiliates, which earned $41 million last year, filed for Chapter 11 bankruptcy in Anchorage on Aug. 19. The company previously sought protection after the Russian government purchased a supplier crabs
It’s worth noting that Chapter 11, called “Reorganization,” is mostly used by businesses that want to continue operating while paying off debts to creditors under a court-approved plan.
The company joined several other major companies that also faced supply disruptions due to the war. However, the impact on Whittier Seafood was particularly felt. Historically, most of the world’s stocks of king crab and deep-sea crab were harvested in Russian waters. After the war, a branch of the company called Marine Fishing International lost access to these supplies. This was a major blow to Alaska’s fishing industry, especially after long-term declines in crab and salmon populations.
The company’s customers also began to refuse products from Russia, which led to a drop in the value of the available stocks of crabs. This forced the company to sell products at reduced prices, which was confirmed by the founder of Whittier, Oleksiy Kozlov, in a court case. The company branch imported the crab from Tefida JSC, a subsidiary company located in Vladivostok, Russia. However, the US and EU imposed an embargo on Russian seafood, preventing MFIs from importing the staple product.
The Russian authorities have also adopted their own measures. Last year, the government revoked Tefida’s fishing licenses, making it impossible to supply crabs to MFI and, accordingly, serve customers in the US, China, Korea and Japan. Kozlov said that this year the Russian government took more decisive measures and confiscated Tefida for the state.
In addition, Whittier faced other financial difficulties, including paying off loans. The company plans to restructure its debts.
Despite these challenges, the authors indicate that Whittier and other Alaska fishing companies may regain their position next year thanks to higher salmon prices. Kozlov noted that rising demand and a limited supply of fish could raise prices in 2025.
