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January 28, 2016

United States

Texas—Global Blue Technologies Challenges Shrimp Improvement Systems

 

In a federal antitrust lawsuit, Global Blue Technologies (GBT), a shrimp farm in Texas, says Shrimp Improvement Systems (SIS)—one of the largest shrimp broodstock companies in the world, owned Charoen Pokphand Foods Public Company Limited in Thailand—can’t use a non-compete agreement to stifle USA competition.  SIS makes clients sign restrictive covenants that preclude them from using its shrimp to start rival breeding programs.  Global Blue Technologies seeks a declaration that its new, state-of-the art shrimp breeding operation in Taft, Texas, doesn’t violate the non-compete deal it signed with SIS.  Global Blue claims “it is not feasible” for any USA farmer to start a rival program without using SIS shrimp because: “(a) the quantities produced by other breeders are too small, (b) the United States’ strict importation requirements and the even more strict requirements imposed by the State of Texas impede would-be breeders from obtaining broodstock from outside the United States, and (c) the cost of obtaining broodstock or postlarvae shrimp from Hawaii is cost prohibitive.”

 

In addition, Global Blue says SIS should not be allowed to monopolize USA shrimp breeding because it obtained its lines of shrimp in the 1980s from the USA Department of Agriculture, which ran a shrimp farming program to make USA competitive with burgeoning shrimp production around the world.

 

Global Blue says that due to SIS’s monopoly, it has no incentive to maintain the quality of its shrimp, which has diminished over the years.  In fact, Texas farmers using SIS shrimp had their worst-ever harvest in 2015, Global Blue says, adding that the last batch it bought from SIS contaminated its entire population of shrimp and hatchery.

 

Global Blue says it launched a breeding program in 2015 and made a sale in May to one of SIS’s biggest clients.  “That client obtained great results from GBT’s products while every other shrimp farmer in Texas—all of whom purchased from SIS—received poor results,” the complaint states.

 

Global Blue attributes its success to its genetics manager, Eduardo Figueras, who worked for SIS from March 2010 to June 2014, but had nothing to do with its breeding program.  Nonetheless, SIS recently sent Global Blue a draft lawsuit, accusing it and Figueras of violating the non-compete agreement by running its own program.  Global Blue disagrees.  It seeks a declaratory judgment, an injunction and damages for violations of the Sherman and Clayton Acts and the Texas Free Enterprise and Antitrust Act.

 

Source: Courthouse News Service.  Antitrust Complaint Against Big Shrimp.  Cameron Langford.  January 28, 2016.

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