Starkist Pleads Guilty in Ongoing Criminal Antitrust Investigation of Tuna Price Fixing

StarKist agreed to cooperate with investigation and faces a criminal fine of up to $100 million

Starkist Pleads Guilty in Ongoing Criminal Antitrust Investigation of Tuna Price Fixing
Image: Pixabay
October 19, 2018

As part of an ongoing criminal antitrust investigation by the US Department of Justice, StarKist, one of the top three packaged tuna producers, has agreed to plead guilty for its role in a conspiracy to fix prices of packaged seafood. According to a one-count felony charge, StarKist and its co-conspirators agreed to fix the prices of canned tuna from as early as November 2011 through at least December 2013.

Background

The investigation stems from civil lawsuits filed by Walmart, Wegmans, Kroger, Albertsons, Hy-Vee, Publix and Meijer, who sued StarKist, Bumble Bee, and Chicken of the Sea. The suits alleged that the producers together controlled a significant portion (70% - 80%) of the packaged tuna market and used that control to fix prices at an artificially high level for years despite falling demand. Walmart said in its lawsuit that it purchased approximately $400 million worth of tuna products annually from these companies between 2010 and 2015, which is where is alleged to have discovered the fraud.

Starkist to cooperate; faces large fine

In addition to pleading guilty, StarKist has agreed to cooperate with federal prosecutors in the ongoing investigation. StarKist faces a criminal fine of up to $100 million, but the final amount of the fine will be determined at a sentencing hearing. The plea agreement is subject to court approval.

A total of six charges have resulted from this federal antitrust investigation into the packaged seafood industry, which is being conducted by the Antitrust Division's San Francisco Office and the FBI's San Francisco Field Office. Bumble Bee Tuna pleaded guilty back in May 2017 for conspiracy with its rivals and retailers to fix canned tuna prices. The investigation into the industry is ongoing.

Price Fixing Hurts Consumers

Price fixing is an agreement among competitors that raises, lowers, or stabilizes prices or terms. When consumers make choices about what products and services to buy, they expect that the price has been determined freely on the basis of supply and demand, not by an agreement among competitors. When competitors agree to restrict competition, the result is higher prices.

"The conspiracy to fix prices on these household staples had direct effects on the pocketbooks of American consumers," said Assistant Attorney General Makan Delrahim of the Justice Department's Antitrust Division. "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."