U.S. Antitrust Division Seafood Price-Fixing Investigation Nets Guilty Plea by StarKist

In one of a recent series of television advertisements featuring StarKist products, actress Candace Cameron Bure exclaims to StarKist’s legendary cartoon tuna Charlie, “Bold choice, Charlie!”  Today, StarKist made a bold, if difficult, choice of its own: to plead guilty to a criminal violation of price-fixing under section 1 of the Sherman Act, exposing it to a criminal fine of as much as $100 million, and to cooperate with the U.S. Department of Justice.

In a press release announcing the plea, the Department stated that StarKist and its coconspirators “agreed to fix the prices of canned tuna fish from as early as November 2011, through at least as late as December 2013.”  As part of the Antitrust Division’s continuing investigation of the packaged seafood industry, the Division has already charged five defendants since 2016.  The first four agreed to plead guilty to price-fixing under section 1 and cooperate with the government:

  1. December 7, 2016: a Bumble Bee Seafoods senior vice president of sales;
  2. December 21, 2016: a Bumble Bee senior vice president of trade marketing;
  3. May 8, 2017: Bumble Bee Foods;
  4. June 28, 2017: a former vice president of sales at StarKist; and
  5. May 1, 2018: the President and Chief Executive Officer (CEO) of Bumble Bee Foods, who was indicted.

All three of the individual cooperating defendants face criminal fines.  Bumble Bee has been sentenced to a $25 million criminal fine, which the Department said “will be increased to a maximum of $81.5 million if Bumble Bee is sold, subject to certain terms and conditions.”

Note: The packaged seafood market reportedly is a multi-billion dollar industry in the United States, in which tuna “represents about 73 percent of the market and generates about $1.7 billion in annual sales.”  Bumble Bee, StarKist, and Tri-Union Seafoods, which trades under the Chicken of the Sea brand, together “controlled 80 to 85 percent of the U.S. market between 2003-2015.”

The StarKist information, like the Bumble Bee information, described the conspiracy’s means and methods in bland and general terms: “engag[ing] in conversations and discussions and attend[ing] meetings with representatives of other major packaged-seafood-producing firms; agree[ing] and reach[ing] mutual understandings during these conversations, discussions, and meetings, to fix, raise, and maintain the prices of packaged seafood sold in the United States; and negotiat[ing] prices with customers and issued price announcements for packaged seafood in accordance with the agreements and mutual understandings reached.”

The Bumble Bee CEO indictment, by contrast, describes the conspiracy’s means and methods in more telling detail.  It alleged that the conspirators

a) participated in meetings, conversations, and communications concerning prices of packaged seafood to be sold in the United States;

b) agreed during those meetings, conversations, and communications on prices for packaged seafood sold in the United States;

c) agreed during those meetings, conversations, and communications to limit and restrict competition between the conspirators as to certain types and categories of products, including, but not limited to, competition for products based on certain types of fishing methods;

d) collected, exchanged, monitored, and discussed information on prices, sales, supply, demand, and the production of packaged seafood for the purpose of reaching agreements on prices and monitoring and enforcing adherence to the agreements reached;

e) issued price announcements and pricing guidance for packaged seafood in accordance with the agreements reached;

f) sold packaged seafood in the United States at collusive and noncompetitive prices;

g) accepted payments for packaged seafood sold in the United States at collusive and noncompetitive prices; and

h) employed measures to conceal their conduct, including, but not limited to, using code when referring to coconspirators, meeting at offsite locations to avoid detection, limiting distribution and discouraging retention of documents reflecting conspiratorial contacts, and providing misleading justifications for prices.

To date, neither Tri-Union nor any of its executives have been criminally charged in the Antitrust  Division’s investigation.  The guilty pleas by Tri-Union’s principal competitors, however, are likely to intensify the pressure on Tri-Union to plead and cooperate.  That, in turn, should hearten the dozens of companies seeking class-action certifications in their civil price-fixing litigation against the three companies.

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