StarKist Pleads Guilty to a Price-Fixing Scheme That Forced Customers to Overpay for Canned Tuna

October 19, 2018, 11:49 AM UTC

StarKist Co. will plead guilty to a felony charge of price-fixing and pay a fine, the U.S. Department of Justice said yesterday in a statement. The fine, which will be subject to court approval of the plea deal, could be as high as $100 million. It is part of a multi-year criminal investigation involving all the big canned tuna sellers in the U.S.

A former StarKist executive and two former Bumble Bee execs also pleaded guilty but former StarKist CEO Chris Lischewski pleaded not guilty.

The canned seafood company is one of three giants that dominate some 80% of the $1.7 billion market in the U.S.: the other two are Bumble Bee Foods LLC, which pleaded guilty to similar charges last year, paying $25 million, and Chicken of the Sea, owned by Thai Union Group.

The price-fixing took place at least between November 2011 and December 2013, the Justice Department alleges.

It emerged because a New York food wholesaler brought a suit against Thai Union, which was attempting to buy Bumble Bee, alleging that the market’s oligopoly was artificially propping up canned tuna prices and that the proposed merger would make things worse. The merger never happened.

Chicken of the Sea cooperated to avoid federal charges and settled with Walmart (WMT), which along with other retailers, had by that time brought its own suit.

StarKist has issued a statement in which it says it cooperated with the investigation and will amend its ways.

In 2015, the company settled a class-action lawsuit for under-filling its cans from 2009 to 2014, offering affected consumers $25 in cash or $50 worth of presumably full tuna cans.

“Our citizens’ confidence in the ability to buy goods within an unbiased market is key to sustaining an efficient and fair economy,” Special Agent in Charge John F. Bennett, FBI San Francisco, said in the DoJ statement. “This investigation stands as a symbol of our commitment to holding corporations and senior leadership accountable and ensuring that activities such as price fixing will not be tolerated.”