StarKist Reaches Settlement Agreement with Justice Department Over Price Fixing
StarKist agreed to plead guilty to one felony charge of price fixing of canned and ready-to-eat tuna, according to the U.S. Justice Department. The company faces a fine of up to $100 million for forcing buyers to pay inflated prices from November 2011 through December 2013. StarKist has also agreed to cooperate with the federal investigation, which began back in 2015. The amount is still to be determined in a hearing by the United States District Court in San Francisco.
“The conspiracy to fix prices on these household staples had direct effects on the pocketbooks of American consumers,” said Makan Delrahim, an assistant attorney general in the Justice Department’s antitrust division. “We will continue to hold companies and individuals who cheat consumers accountable.”
In 2015, Thai Union Frozen Products in Bangkok made an unsuccessful bid to buy Bumble Bee Foods. Thai Union had already acquired Chicken of the Sea and expected the merger with Bumble Bee would allow it to become the U.S. market leader.
Before the merger completed, however, Olean Wholesale Grocery Cooperative of New York, filed a lawsuit in California. Olean said in its complaint that raw tuna prices had dropped, and canned tuna prices should have followed, but did not. Olean said a wave of acquisitions in the canned seafood industry had already created an “oligopolistic structure,” which would become “a virtual duopoly” after the planned merger finalized. The lawsuit also included incidents in which the tuna companies would have had opportunities to collude on prices. Other lawsuits soon followed.
In July 2015, Thai Union Frozen Products disclosed it had been subpoenaed by the U.S. Justice Department and the merger folded. Then, in 2017, Bumble Bee Foods pleaded guilty to the same felony price fixing charge as StarKist and paid a $25 million fine.
Andrew Choe, President & CEO, StarKist Co. issued the following statement: “StarKist is committed to being a socially responsible company and doing the right thing. We have cooperated with the DOJ during the course of its investigation and accept responsibility. We will continue to conduct our business with the utmost transparency and integrity. While this process is long term in nature, we have addressed the necessary actions required in this plea agreement, including continuing to strengthen related compliance best practices.”
Last year, StarKist and its subsidiary, Starkist Samoa Co., reached an agreement with the Justice Department and the Environmental Protection Agency (EPA) requiring the companies to reduce pollution, improve safety measures, and comply with important federal environmental laws at their tuna processing facility. StarKist paid a $6.3 million penalty.
Acting Assistant Attorney General Jeffrey H. Wood of the Justice Department’s Environment and Natural Resources Division said at the time, “The Department will continue to identify violations and enforce federal laws designed to protect the environment and the public. As a result of this action, StarKist has already performed a significant amount of work to correct its violations and we will continue to work together with our partners to bring the facility back into compliance and prevent future violations.”