Thai Union initiates share buyback, responds to Shark Guardian report accusing it of greenwashing

Thai Union CEO Thiraphong Chansiri presenting the company's Q1 2024 results.
Thai Union CEO Thiraphong Chansiri presenting the company's Q1 2024 results | Photo courtesy of Thai Union
6 Min

Thai Union is nearly halfway through a share-repurchasing program it initiated in January 2024 that has seen it spend nearly THB 1.3 billion (USD 35.7 million, EUR 32.9 million).

The Samut Sakhon, Thailand-based seafood giant, which owns the Chicken of the Sea and John West canned tuna brands, announced its third share-buyback program on 16 January 2024, saying it would reward shareholders by returning excess capital to them and boost the company’s earnings per share.

The program expires 30 June 2024 and is limited to 200 million shares and THB 3.6 billion (USD 99 million, EUR 91.1 million) in expenditures, or 4.3 percent of its paid-up capital. The share repurchases cannot exceed 115 percent of its average share closing price for five working days prior to the share repurchase date, and the repurchased shares cannot be used for resale.

“The purpose of the share repurchases is to ensure the company's excess liquidity management and to increase the return-on-equity ratio and earnings-per-share ratio, to generate future income and profit of the company and to ensure the strong financial position of the company,” it said in its announcement, made via the Stock Exchange of Thailand, where it is listed.

As of 28 December 2023, Thai Union had over 4.6 billion shares issued and outstanding. As of 15 May 2024, it had repurchased nearly 90 million shares, paying THB 1.29 billion (USD 35.7 million, EUR 32.9 million). The company’s stock was priced at THB 14.60 (USD 0.40, EUR 0.37) per share on 16 January, the day it announced the buyback program, and had reached THB 15.20 (USD 0.42, EUR 0.38) as of 15 May.

In Q1 2024, Thai Union reported its net profit climbed 12.9 percent to nearly THB 1.2 billion (USD 31.2 million, EUR 29 million), its gross profit rose 16.8 percent to THB 5.7 billion (USD 155.2 million, EUR 144.4 million), and its sales increased 1.7 percent to THB 33.2 billion (USD 897.2 million, EUR 835 million) year over year.

In Q4 2023, Thai Union posted a loss of THB 17.2 billion (USD 477.5 million, EUR 442.9 million), and in its 2023 fiscal year, the company’s net profit fell 37 percent to THB 4.5 billion (USD 125 million, EUR 116 million), with its sales dropping 12.5 percent to THB 136.2 billion (USD 3.8 billion, EUR 3.5 billion) in the period.

Thai Union announced in January 2024 it is pursuing an exit from its strategic partnership and minority investment in Red Lobster Master Holdings, and it took a one-time, non-cash impairment charge of THB 18.4 billion (USD 510.7 million, EUR 473.8 million) in Q4 2023. Red Lobster is planning to enter Chapter 11 bankruptcy filing before 27 May, according to The Wall Street Journal.

The restaurant chain plans to use the bankruptcy process to negotiate new deals with landlords and creditors in order to erase hundreds of millions of dollars in debt. The company closed 99 of its restaurants from 14 May, including in Florida – many near the company’s home office in Orlando – as well as 11 in New York, 10 in Texas, and eight in California.

The chain has been behind on paying suppliers for months, paying suppliers an average of 48 days past payment due dates in March, Restaurant Business reported.

Elsewhere, on 15 May, U.K. charity Shark Guardian, an environmental NGO dedicated to conserving shark species, issued a report alleging Thai Union has engaged in greenwashing and failing to act on promises to protect threatened ocean species.

The report, “The Art of Greenwashing: Thai Union’s Sustainability Smokescreen,” accuses Thai Union of not working hard enough to advance its sustainability goals, including failing to meet its targets for improving workers’ rights.

“By examining publicly available reports from the Thai Union Group, the report finds critical disparities between the company’s commitments and promises and evidence of a lack of progress in addressing either ocean sustainability or labor abuses,” Shark Guardian Co-Founder Brendon Sing said in a press release. “Talk is cheap and meaningless without action. The disparity between Thai Union’s promises and its actions has major implications for the health of our ocean. Customers are being hoodwinked by empty promises while shark populations collapse, especially in the Indian Ocean, where Thai Union stamps its destructive ecological footprint.”

Thai Union launched its SeaChange 2030 program in July 2023, committing USD 200 million (EUR 184 million) – the equivalent of its entire net profit in 2022 – “to help reshape the seafood industry around sustainable practices.”

The program includes the implementation of best practices for preventing endangered, threatened, and protected (ETP) species from becoming bycatch, enhancing its traceability efforts, improving its environmental standards for farmed shrimp and its sourced fishmeal, ensuring a 42 percent reduction in greenhouse gas emissions by 2030, using more sustainable packaging, introducing a new “worker voice and grievance” mechanism, and diversifying its management positions, among other commitments.

But, Shark Guardian called the SeaChange 2030 program misleading.

“Thai Union makes promises it has no intention of keeping as a way to deflect criticism,” Shark Guardian Marine Wildlife Campaigner Alex Hofford said. “A case in point is its so-called SeaChange2030 ‘sustainability strategy,’ which they’ve put up as a front to bamboozle investors, the public, and the media. Thai Union claims to be committed to supporting responsible and sustainable fisheries, but the company’s supply chain network and traceability are murky at best.”

The Shark Guardian report accused Thai Union of using the complexity of global tuna supply chains “to distance [itself] from problematic suppliers and hide behind opaque informal relationships.”

“Making promises is easy, but renewing empty promises every few years is pernicious,” Hofford said. “We’re calling on Thai Union Group to step up and deliver the sustainable future the company claims it aspires to, or else it should be broken up.”

Thai Union responded to the report in a statement sent to SeafoodSource on 16 May,

"Thai Union is committed to the sustainability of the oceans, to protecting their biodiversity, and to providing a safe, decent, and equitable workplace to the women and men that work on the vessels and farms we source from," it said. "Thai Union has been actively driving continuous improvement of labor and ethical conditions in the fishing sector since we launched our Vessel Code of Conduct (VCoC) and Vessel Improvement Program in 2017. The Fisher Work and Welfare (FWW) program provides clear guidance on working conditions on board the vessels that Thai Union sources from, and to encourage better practices at sea. Our SeaChange® 2030 sustainability plan entails the broadest reaching commitments in our industry. Committing the entire 2022 net profit of USD 200 million must invariably come with measurable and tangible progress, which we will begin to show for all our 11 commitments."

Thai Union provided a summary of the progress it said it has achieved in 2023: 

"In 2023, 85 percent of the total tuna volume we source are either MSC-certified, in MSC assessment, or in a credible Fishery Improvement Program. Our Tuna Commitment 2025 performance is independently analysed and reported by Key Traceability," it said. "Of the tuna FIPs that we support, two have now obtained MSC certification and an additional three have entered into the MSC assessment process. In addition, two are on track to enter the assessment process by the end of 2024. We’re the first tuna processor to make a 100 percent commitment to source only from tuna vessels with ‘on-the-water’ monitoring – either electronically or with human observers. In 2023, 90 percent of vessels from which Thai Union sourced had coverage (up 11 percent versus 2022). This is independently verified and is reported through The Nature Conservancy and Thai Union Partnership Reports."

Thai Union is also making progress on social and labor issues in its supply chain, it said.

"We recognize the limited external mechanisms in place that govern social sustainability in the seafood sector. That is why, at the end of 2023, Thai Union proactively aligned its Fishing Vessel Improvement Program and Vessel Code of Conduct (VCoC) with the Consumer Goods Forum’s Sustainable Supply Chain Initiative (SSCI) At-Sea Operations criteria, resulting in a number of updates to our policies and procedures as well as the VCoC itself," it said. "The Thai Union Fisher Work & Welfare (FWW) program continues to be implemented across the vessels we source from. As of 2023, 79 percent of the tuna volume we source are actively working towards improvements in welfare and working conditions through our Vessel Improvement Program as an outcome of the vessel audits. Thai Union continues to deploy resources to the ports from which we source, including but not limited to: Tema, Ghana: Port Louis, Mauritius; Suva, Fiji; Port Victoria, Seychelles; Christmas Islands; Busan, South Korea; and Kaohsiung, Taiwan."

Thai Union is also advancing solutions for bycatch issues, it said.

"In 2023, a bycatch audit, set up by Sustainable Fisheries Partnership (SFP) and its partners Birdlife International and Whale and Dolphin Conversation), was conducted on Thai Union’s tuna fisheries to assess the risk to Sharks, Seabirds, Turtles, and Marine Mammals. Thai Union published the “Overview Analysis Report of Sustainable Fisheries Partnership’s ETP Bycatch Audit” transparently detailing the results of this assessment, alongside a list of recommendations. Thai Union is now working to embed these recommendations and will continue to report out on progress in the Sustainable Fisheries Partnership (SFP) – Thai Union Progress Report."

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