StarKist pleads guilty to role in canned tuna price-fixing
StarKist pleaded guilty on Thursday, 18 October to fixing the prices of the canned tuna it sold in the United States between 2011 and 2013.
The Pittsburgh, Pennsylvania-based company pleaded guilty to one felony count of price-fixing, a violation of the Sherman Antitrust Act, according to documents filed in the U.S. District Court for the Northern District of California in San Francisco.
StarKist faces a fine of up to USD 100 million (EUR 87.1 million), a probationary term of between one and five years, and must pay restitution as a result of its plea. The exact amount of StarKist’s fine will be determined at a sentencing hearing and the plea agreement is subject to court approval. As part of its plea, StarKist has agreed to cooperate in the investigation.
StarKist became the second company to plead guilty in the case, following Bumble Bee’s guilty plea in May 2017. Bumble Bee faced a fine of up to USD 272.4 million (EUR 234 million), but eventually the Department of Justice agreed to a lower fine of USD 25 million (EUR 22.8 million) to protect the company from potential insolvency.
Former Bumble Bee executives Walter Scott Cameron and Ken Worsham and StarKist executive Stephen Hodge also each pleaded guilty in 2017 to conspiracy as part of the investigation, and former Bumble Bee CEO Christopher Lischewski was indicted in May 2017 on price-fixing charges but has pleaded not guilty. Lischewski’s case is ongoing.
In a press release, the U.S. Department of Justice Antitrust Division said the guilty plea brings to a close investigation into the industry pricing practices, which it initiated in 2015. The investigation began after a failed bid by Thai Union, which owns U.S. canned tuna firm Chicken of the Sea, to buy Bumble Bee in 2015. In September 2017, Thai Union acknowledged Chicken of the Sea was the whistleblower in the case and received conditional leniency as a result.
The investigation was conducted by the Department of Justice’s Antitrust Division – specifically by its San Francisco office – and by the FBI’s San Francisco field office. Federal Bureau of Investigation Special Agent in Charge John F. Bennett, who helped lead the investigation, and Makan Delrahim, the assistant attorney general leading the Justice Department’s Antitrust Division, issued statements after StarKist’s plea was entered.
“Our citizens' confidence in the ability to buy goods within an unbiased market is key to sustaining an efficient and fair economy,” Bennett said. “This investigation stands as a symbol of our commitment to holding corporations and senior leadership accountable and ensuring that activities such as price fixing will not be tolerated.”
“The conspiracy to fix prices on these household staples had direct effects on the pocketbooks of American consumers,” Delrahim said. “All Americans have the right to the benefits of free and open competition – the best goods and services at a price free from collusion. We will continue to hold companies and individuals who cheat consumers accountable.”
StarKist President and CEO Andrew Choe said in a statement that the company “accepts responsibility” and has cooperated with the Department of Justice throughout the investigation.
"StarKist is committed to being a socially responsible company and doing the right thing," Choe said. "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."
The protections Thai Union gained from its status as a whistleblower may still leave it vulnerable in the numerous civil lawsuits that have been filed by U.S. customers and retailers against it and Chicken of the Sea, Bumble Bee, and StarKist. Retailers that have sued include Walmart, Target, Wegmans, Hy-Vee, Publix, and Kroger, though Walmart settled its suit in May 2018.
Photo courtesy of StarKist