Saving Seafood

Canned Tuna Maker Bumble Bee Preps for Bankruptcy Filing

November 18, 2019 — Bumble Bee Foods LLC is preparing to file for bankruptcy within days over mounting legal expenses stemming from its involvement in a conspiracy to fix prices on canned tuna, according to people familiar with the matter.

The San Diego-based company, owned by London-based private-equity firm Lion Capital, is expected to file a chapter 11 petition shortly and will put itself up for sale, the people said. Bumble Bee didn’t respond to a request for comment. Lion Capital, which bought the company in 2010 for $980 million, also didn’t immediately respond.

Bumble Bee pleaded guilty in 2017 and agreed to pay a $25 million fine for having formed a cartel with its two main competitors, Chicken of the Sea and StarKist Co.

The Justice Department subsequently indicted Bumble Bee Chief Executive Christopher Lischewski for his alleged role in the conspiracy. Mr. Lischewski, who pleaded not guilty, took a leave of absence from Bumble Bee last year and is on trial in California federal court.

Read the full story at The Wall Street Journal

As the guilty pleas pile up in tuna case, will consumers ever get anything back?

November 6, 2018 — First, Chicken of the Sea came forward as a whistleblower. Last year, Bumble Bee Foods pleaded guilty, followed by StarKist Co. in October.

The big three tuna companies — familiar names on the shelves of your nearest grocery store — have been under investigation by the U.S. Department of Justice for keeping the price of canned and pouched tuna artificially high.

It’s a high-level antitrust case involving lots of big companies, but it’s also the kind of case that reaches all the way down to the grocery store checkout and family budgets.

Thomas Burt, an attorney with the law firm Wolf Haldenstein Adler Freeman & Herz, said with consumer cases like this, “Psychologically, these hit home in a way that others don’t.”

“If a group of companies fix the price of basic industrial chemicals or computer chips that we use in the devices around us, the psychological distance is further. We don’t feel it as directly,” Mr. Burt said. “This is a product that people have a relationship with. They know this brand. They’ve eaten it since they were kids.

“It’s a kick in the pants for consumers,” he said.

It remains to be seen if consumers will be directly compensated in some way, and, if so, how.

The packaged seafood market, which also includes salmon, shrimp, clams and the like, is a multibillion-dollar industry in the United States. Tuna represents about 73 percent of the market and generates about $1.7 billion in annual sales, according to court documents.

Read the full story at The Pittsburgh Post-Gazette

StarKist admits fixing tuna prices, faces $100 million fine

October 22, 2018 — StarKist Co. agreed to plead guilty to a felony price fixing charge as part of a broad collusion investigation of the canned tuna industry, the U.S. Department of Justice announced Thursday.

The DOJ said StarKist faces up to a $100 million fine when it is sentenced. Prosecutors allege that the industry’s top three companies conspired between 2010 and 2013 to keep prices artificially high.

“We have cooperated with the DOJ during the course of its investigation and accept responsibility,” said StarKist chief executive Andrew Choe. “We will continue to conduct our business with the utmost transparency and integrity.”

StarKist is owned by South Korean company Dongwon Industries, one of the largest tuna catching companies in the world. The parent company’s website carries pledges to abide by ethical standards and good corporate citizenship.

The scheme came to light when Thai Union Group’s Chicken of the Sea attempt to buy San Diego-based Bumble Bee failed in 2015, according to court records. Chicken of the Sea executives then alerted federal investigators, who agreed to shield the company from criminal prosecution in exchange for cooperation.

Bumble Bee Foods last year pleaded guilty to the same charge and paid a $25 million fine, $111 million lower than prosecutors said it should have been. Prosecutors said they feared putting the financially struggling Bumble Bee out of business with a high fine and agreed to let the company make interest-free payments for five years.

Read the full story from the Associated Press at the Gloucester Daily Times

Lawsuit takes aim at kings of the tuna industry

June 5, 2017 — Clandestine phone calls. Surreptitious emails. In-person meetings to avoid a paper trail.

The purpose of all the secrecy? To keep the price on packaged tuna — the quick source of protein found in cans and pouches — artificially high.

New details of exactly how the country’s three largest tuna companies, including Pittsburgh’s StarKist Co., allegedly spent years sharing information and collaborating are included in a pile of amended complaints submitted last month in federal court by numerous grocers, restaurants and suppliers.

It’s the latest round in an ongoing court battle alleging price fixing in the packaged seafood industry. Bumble Bee Foods and Tri-Union Seafoods, which trades under Chicken of the Sea, both based in San Diego, are also named.

The U.S. Department of Justice, which is conducting its own investigation into alleged price fixing in the industry, announced in early May that Bumble Bee Foods agreed to pay a $25 million fine after pleading guilty to conspiring with competitors to fix prices. The DOJ said the company also is cooperating with the antitrust investigation. It’s the third charge to be filed in the investigation.

The DOJ had released information that triggered the amended complaints, according to one attorney.

A spokesperson for Starkist, Chicken of the Sea and Bumble Bee declined to comment on pending litigation, but in 2016 attorneys representing StarKist urged the court to dismiss the case. They argued that it’s not unusual for people working in the same industry to know each other and to meet at industry gatherings.

But a lot of retailers are arguing that the evidence shows the exchanges were not so innocent.

The latest court documents — which are heavily redacted — include details such as Walmart and Ohio-based grocer Kroger charging that executives “used misleading subject lines on emails to affirmatively conceal the conspiratorial nature of their communications from those not involved in the conspiracy.”

Read the full story at the Pittsburgh Post-Gazette