Lischewski target of new lawsuit filed over canned tuna price-fixing
A newly filed lawsuit has targeted former Bumble Bee Foods CEO Chris Lischewski over his potential role in an alleged price-fixing conspiracy between the three largest U.S. canned tuna companies.
The lawsuit, filed by Associated Wholesale Grocers on 14 August, claims Bumble Bee, Starkist, and Chicken of the Sea and their parent companies colluded to exchange pricing information, coordinate price announcements, reduce the quality of their products and restrain their product output between 2004 and 2015.
The lawsuit references several other civil lawsuits filed by a number of American retailers, and an ongoing investigation by the U.S. Department of Justice into the alleged wrongdoing. As a result of that investigation, two Bumble Bee senior sales and marketing executives and one Starkist senior sales executive have pled guilty to charges related to price-fixing. Bumble Bee itself also pleaded guilty in May 2017 to fixing the price of canned tuna between 2011 and 2013, and Lischewski was indicted by a federal grand jury in May 2018 and has since resigned as Bumble Bee’s CEO.
The lawsuit claims that the three tuna companies conspired to raise prices on canned tuna in 2008, 2010, 2011, and 2012. It also claims meetings between Starkist parent company Del Monte executive Barry Mills and Chicken of the Sea executive John DeBeer, and between Lischewski and Chicken of the Sea CEO Shue Wing Chan in 2007 and 2008 resulted in the three companies reducing the size of their cans from six ounces to five.
Additionally, the use of a common can vendor, Impress, and a co-packing arrangement between Bumble Bee and Chicken of the Sea also facilitated the alleged collusion, the lawsuit claims. Other ties, including frequent personnel moves between the three tuna companies, also further the price-fixing, according to the lawsuit.
“The conspiracy was facilitated in part by the fact that during it, a number of senior sales and marketing executive and other employees left the employ of one Defendant to go work for another. This familiarity helped to cultivate a culture of collusion in the packaged seafood industry and resulted in communications by telephone between these senior sales and marketing executives for competing companies,” the lawsuit alleges. “A select number of industry trade associations also facilitated the conspiracy by providing Defendants with cover to meet and conduct company business.”
Lischewski’s personal behavior is also called into question by the lawsuit, which alleges that he “profited substantially from the conspiracy in numerous ways.”
“He used his role to reap unlawful profits by selling Bumble Bee numerous times throughout the conspiracy period,” the lawsuit states. “He used Bumble Bee as his personal private banker, authorizing loans to himself from Bumble Bee even while Bumble Bee was woefully undercapitalized.”
Significant portions of the lawsuit are redacted, including in areas of the suit alleging misbehavior by Lischewski. Additionally, the lawsuit – and new filings by the plaintiffs in a separate lawsuit led by a group of retailers including Albertsons and Kroger – argue that Lion Capital, the private equity owner of Bumble Bee, release “highly-probative” documents, including emails allegedly deleted by Lischewski “perhaps in an effort to conceal his illegal conduct.”
While the judge hearing the case previously ruled that producing the requested documents represented an “undue burden” on Lion Capital, continued withholding of these documents may impede the depositions of witnesses, including depositions scheduled with Thai Union employees for this fall, according to the retailers’ court filing.