Walmart resolves anti-trust lawsuit against Chicken of the Sea
Walmart has reached an agreement with Thai Union’s Chicken of the Sea International regarding antitrust claims initially brought forth by the retailer back in October 2016, and later amended in May of 2017.
The terms of the agreement will see Tri-Union Seafoods – which trades as Chicken of the Sea International – pay a cash settlement to Walmart and partner with the retail giant in a series of joint programs and new product promotions. New product innovations will also be launched and featured across Walmart stores in the United States as a result of the agreement, Chicken of the Sea said in a press release.
Groups of American wholesalers, retailers, and foodservice outfits began filing lawsuits in 2015 alleging that the three biggest providers of canned tuna in the United States – Tri-Union Seafoods, StarKist, and Bumble Bee – had conspired to "fix, raise, maintain, and/or stabilize prices for PSPs [packaged seafood products]” in the country. The series of lawsuits, as well as Thai Union’s failed bid to purchase Bumble Bee in 2015, spurred the U.S. Department of Justice (DOJ) to launch its own criminal antitrust investigation, examining claims that the three companies had colluded to increase prices for packaged tuna from 2008-2010, until at least July 2015.
Walmart entered the scope of the case in October 2016, when it filed its own lawsuit against the “big three” canned tuna providers. In the first iteration of the suit, Walmart said it purchased approximately USD 400 million (EUR 341 million) worth of packaged tuna products annually from the tuna companies between 2010 and 2015, when price-fixing allegedly occurred. The retailer later amended its lawsuit in May 2017, attaching a “conspiracy players list” that included the names of 56 major seafood industry leaders who Walmart said allegedly took part in the scheme.
Chicken of the Sea came forward last year as the whistleblower in the price-fixing scandal, receiving conditional leniency under the Department of Justice’s Corporate Leniency Program in exchange for sharing information to assist the DOJ’s antitrust investigation. This act has played a part in securing the current settlement reached between Chicken of the Sea and Walmart, according to Christianna Reed, vice president and general counsel, legal and risk management for Thai Union’s U.S. subsidiary.
"We are pleased to have reached an agreement with Walmart that includes a series of continuing programs and promotions,” Reed said in a prepared statement shared with the media on 22 May. “The canned tuna industry has been and remains a low-margin business, which is particularly challenging for a player of Chicken of the Sea International's size. The settlement reflects Chicken of the Sea International's status as the first tuna producer to engage the U.S. Department of Justice as a whistleblower in this case. This resolution is a significant achievement for Chicken of the Sea International and the newly appointed leadership team. We look forward to reaching additional pragmatic solutions to resolve the ongoing litigation."
"Our partnerships with retailers are important to the success of our business," added Darren Parsons, vice president, retail sales and business development for Chicken of the Sea. "The agreement we reached with Walmart highlights our commitment to achieving successful outcomes with our retail partners. We are confident that with Walmart, we will offer our shared customers the healthy sustainably-sourced seafood products they expect from us. We are also excited about a number of consumer-driven innovations in the pipeline that we will bring to market across all of our retailers."
The DOJ investigation has lead to the criminal prosecution of Bumble Bee Foods, resulting in a USD 25 million (EUR 22.8 million) fine, which was later reduced. Former Bumble Bee executives Walter Scott Cameron and Ken Worsham, as well as StarKist executive Stephen Hodge, each pleaded guilty to conspiracy as part of the investigation.
On Wednesday, 16 May, Bumble Bee CEO Christopher Lischewski was indicted on a single count of price fixing relating to the DOJ investigation. He faces up to 10 years in prison if found guilty. Lischewski is scheduled to be arraigned on 29 May in U.S. District Court in San Francisco, California.
Lischewski’s attorney John Keker is already defending his client, assuring the executive’s innocence.
“Chris Lischewski is a decent and honorable man, who has lived a hardworking and ethical life,” Keker told the Times of San Diego. “He has been a leader and beacon within the seafood industry for more than twenty-five years. And most significantly on this dark day, he is innocent of any wrongdoing.”