Chicken of the Sea announces price-fixing settlement with 29 more retailers, criticizes holdouts
Chicken of the Sea International, a division of Thai Union, on Wednesday, 9 January announced it had settled civil complaints by 29 U.S. retailers in relation to antitrust claims made as part of a larger price-fixing scandal in the canned tuna sector.
The settlement follows upon an earlier agreement the company reached in April 2018 with Walmart, one of the largest retailers of canned tuna in the United States. Both rounds of settlements included cash payments and a promise from Chicken of the Sea to conduct promotional campaigns and other programming in partnership with the retailers.
"We are pleased to have reached an agreement with these companies, who are important partners to COSI. This demonstrates our commitment to putting this matter behind us and further strengthens our valued customer partnerships," Chicken of the Sea International Vice President and General Counsel Christianna Reed said in a press release.
The latest settlement included agreements with Affiliated Foods, Inc.; Affiliated Foods Midwest Cooperative, Inc.; Alex Lee, Inc.; Associated Food Stores, Inc.; Associated Grocers of New England, Inc; Bashas' Inc.; Big Y Foods, Inc.; Brookshire Brothers, Inc.; Brookshire Grocery Company; Certco, Inc.; Dollar Tree Distribution, Inc.; Greenbrier International, Inc.; Family Dollar Stores, Inc.; Family Dollar Services, LLC; Fareway Stores, Inc.; The Golub Corporation; Giant Eagle, Inc.; Kmart Corporation; K-VA-T Food Stores, Inc.; Marc Glassman, Inc.; McLane Company, Inc; Meadowbrook Meat Company, Inc.; Merchants Distributors, LLC; Schnuck Markets, Inc.; SpartanNash Company; URM Stores, Inc.; Western Family Foods, Inc.; Woodman's Food Market, Inc.; 99 Cents Only Stores LLC; and all of their affiliates.
"The settlement is a significant achievement for COSI and our revamped management team," Reed said.
In her prepared remarks, Reed also criticized the remaining holdout companies who have refused to negotiate a deal with Chicken of the Sea to end their lawsuits.
"We are also hopeful [this settlement] will encourage any remaining litigants to put posturing aside and work with us to find pragmatic solutions that reflect the industry's challenging market realities,” Reed said. “It is also an unfortunate reality that litigants who continue to pursue aggressive, unrealistic negotiation tactics are putting an iconic American seafood brand and American jobs at risk."
In its second quarter 2018 financial report, Thai Union estimated the total cost to the company to settle all of its civil cases related to price-fixing issues would be THB 1.359 billion (USD 42.6 million, EUR 36.9 million), which it charged to its second quarter results.
The company does not face penalties from the U.S. Department of Justice, which prosecuted related antitrust cases against Bumble Bee Foods and StarKist as part of a conspiracy the three companies engaged in to artificially inflate the price of canned tuna, because Chicken of the Sea acted as the whistleblower in the case.
The investigation has resulted in guilty pleas and subsequent millions of dollars in fines for Bumble Bee and StarKist and criminal prosecutions against several of the companies’ executives, including Bumble Bee CEO Christopher Lischewski, who was indicted in May 2018.