US companies file class-action suit alleging price-fixing by Norwegian farmed salmon firms
A class-action lawsuit filed on behalf of U.S. direct purchasers of Norwegian farmed salmon is accusing multiple Norwegian firms including Mowi, Grieg Seafood, Lerøy Seafood, and SalMar of conspiring to fix the prices of farmed salmon.
The lawsuit, filed on Tuesday, 23 April, alleges the major players in Norway’s farmed salmon industry exchanged competitively sensitive information among themselves, with the aim of artificially controlling the price of farm-raised salmon bought by U.S. seafood buyers, a violation of the Sherman Anti-Trust Act.
The lawsuit is largely based on an ongoing investigation by the European Commission into “suspected anti-competitive practices” in the farmed Atlantic salmon sector in Europe, first made public in February 2019. The investigation included raids by E.C. officials of the Scottish and Dutch corporate offices of several seafood companies based in Norway, including Mowi, Grieg Seafood, Lerøy Seafood, and SalMar.
A letter sent by the E.C. to one of the companies, obtained by SeafoodSource, revealed the E.C. approved a decision on 6 February, 2019, to investigate information received “from different actors operating at different levels in the salmon market” alleging that some Norwegian producers “participate or have participated in anti-competitive agreements and/or concerted practices related to different ways of price coordination in order to sustain and possibly increase prices of farmed Norwegian Atlantic salmon.”
The lawsuit was filed in U.S. District Court in the Southern District of Florida (Miami Division) on behalf of Mentor, Ohio-based Euclid Fish Company, according to Arthur Bailey of Hausfeld LLP, one of the plaintiffs’ attorneys. Numerous other similar suits have and will continue to be filed containing similar allegations, including by Schneider's Seafood & Meats of Cheektowaga, New York, and by Euro USA Inc. of Cleveland, Ohio, Bailey told SeafoodSource. Within the next month, the cases will be combined into one larger class-action suit including all direct purchasers of Norwegian farmed salmon, Bailey said. The case will be heard by James Lawrence King.
The suit alleges that as early as 1 July, 2015, Norway-based farmed salmon producers “participated in meetings and conversations among themselves during which they agreed to charge prices at certain levels, and otherwise to fix, increase, maintain, or stabilize prices of farm-raised salmon and products derived therefrom in the United States and elsewhere.”
The conspiracy affected hundreds of millions of U.S. dollars’ worth of salmon, the suit alleges.
Key to the alleged conspiracy was manipulation of the spot market for Atlantic salmon in Oslo, Norway’s capital, according to the suit. While only 1 percent of Norway’s salmon production is sold on the spot market, with much of the remainder sold via annual contracts, the spot prices set the baseline for longer-term contract prices. The Norwegian firms engaged “in conduct designed to raise and stabilize the prices of farm-raised salmon sold on the spot market and pursuant to contracts,” the suit alleges.
“Since 2015, salmon buyers in Europe have complained that Norway’s salmon producers, including Mowi, have been rigging the spot market by using subsidiary companies, including Mowi’s Polish subsidiary, Morpol (a fish processor and distributor), to drive up the spot price. As the purchasing director of Graal S.A. (a Polish salmon processor), Alina Piasecka, has explained, ‘[W[e’ve seen examples of prices falling in the spot market, and exporters offering fish at increasingly lower prices.’ She continued, ‘[S]uddenly, 15 minutes later there are aren’t fish available, and we find out that Morpol has purchased perhaps 60 truckloads.’ Graal’s CEO, Boguslaw Kowalski, has explained: ‘[W]e are seeing that now and again they take advantage of Morpol to buy at higher prices than that charged by the market, to hike up prices,’” the suit stated.
Other salmon buyers in Europe made similar allegations, according to the suit.
“In 2017, Stale Hoyem, general manager of Suempol Norway, one of the biggest smoked salmon producers in Poland and Europe, complained that ‘Companies in Norway buy small quantities of salmon to raise the price for the rest of the players.’ Hoyem added that ‘[O]ne last thing that affects prices is that some of the major players choose to create their own purchasing departments buying a truckload here and a truckload there’; He was ‘Suggesting this ‘daily’ practice is heavily influencing prices on the spot market.’ Borge Prytz Larsen, purchasing director at Severnaya, which imports salmon into Russia, confirmed Hoyem’s statement: ‘The big players buy fish, and they then use the price as indicators for other customers,’” the suit stated.
The price of farmed salmon from Norway has increased at a higher rate than the cost of producing it, the so-called “cost in box,” according to the suit. Meanwhile, the sales earnings of the companies accused have all increased substantially.
“Defendants frequently – and falsely – asserted that cost increases justify their price increases, but their own data disproves that purported justification,” the suit said.
At the same time, the amount of Atlantic salmon being imported into the United States has increased significantly in recent years, both in volume and in value.
“These price increases – and the defendants’ coordinated behavior that caused them – have come at the expense of [the] plaintiff and the class, who have paid more for farm-raised salmon than they otherwise would have in the absence of collusion,” the suit stated.
Euclid Fish is requesting a trial by jury. The complete list of defendants includes Mowi ASA, Marine Harvest USA, Marine Harvest Canada, Ducktrap River of Maine LLC, Grieg Seafood ASA, Grieg Seafood BC, Bremnes Seashore AS, Ocean Quality AS, Ocean Quality North America, Ocean Quality USA, Ocean Quality Premium Brands, SalMar ASA, Lerøy Seafood Group, Lerøy Seafood USA, and Scottish Sea Farms.