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Munchies

No Collusion!... Except in Tuna Industry, Where StarKist Just Pleaded Guilty to Price-Fixing

Who knew the underbelly of the canned tuna industry was so fishy?

by Jelisa Castrodale
Oct 22 2018, 2:00pm

Photo: Getty Images/sdominick

As of this writing, President Donald Trump has tweeted some variation of the phrase “no collusion” almost 70 times since May 2017. Sometimes he builds a complete sentence around it, sometimes those two words serve as their own standalone statement. He has punctuated it with periods and with exclamation points, and he has experimented with capitalization options that range from “No collusion” to “No Collusion” to mashing his caps lock and screaming “NO COLLUSION” when Twitter innocuously asks him to report “What’s happening?”

In July, he took a different approach, writing “Collusion is not a crime, but that doesn’t matter because there was No Collusion (except by Crooked Hillary and the Democrats)!”

That’s wrong, of course, because ‘collusion’ can include many, many different crimes—just ask the StarKist tuna company.

On Thursday, federal prosecutors announced that StarKist Co. had agreed to plead guilty to felony price fixing as part of an investigation into alleged collusion within the canned tuna industry. According to the Associated Press, StarKist could face a fine of up to $100 million for its role in the conspiracy.

“StarKist is committed to being a socially responsible company and doing the right thing. We have cooperated with the [Department of Justice] during the course of its investigation and accept responsibility," Andrew Choe, the President & CEO, of StarKist Co., said in a statement. "We will continue to conduct our business with the utmost transparency and integrity. While this process is long-term in nature, we have addressed the necessary actions required in this plea agreement, including continuing to strengthen related compliance best practices." (MUNCHIES reached out to StarKist for further clarification, but a company spokesperson said that the company had no additional comments beyond this media statement.)

In addition, one former StarKist executive and two former Bumble Bee Foods executives also pleaded guilty to price fixing. In May, Christopher Lischewski, the former CEO of Bumble Bee, was indicted by a grand jury on one count of price fixing. He is facing up to ten years in prison and a fine of up to $1 million. (Through his attorney, Lischewski has denied any involvement in the conspiracy.)

StarKist, along with Bumble Bee and Chicken of the Sea, have been accused of colluding to set artificial prices for their tuna, “without any legitimate justification” or in response to market conditions or customer demand. That kind of price manipulation is in violation of federal antitrust laws. “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,” the Federal Trade Commission explains. “When competitors agree to restrict competition, the result is often higher prices. Accordingly, price fixing is a major concern of government antitrust enforcement.”

The AP reports that this shady-ass agreement was discovered when Thai Union Group, the parent company of Chicken of the Sea, tried to buy Bumble Bee in 2015. Thai Union pulled out of the deal after learning that federal investigators had begun an antitrust investigation into the canned tuna industry. Chicken of the Sea’s executives “then alerted federal investigators.” The company agreed to go full snitch, cooperating with the investigation in exchange for protection against prosecution. Last year, Bumble Bee pleaded guilty to conspiring to fix prices from 2011 and 2013, and the company was ordered to pay a $25 million fine.

In addition to the federal criminal case, the three companies have also been sued by Walmart for allegedly fixing tuna prices between 2010 and July 2015. “We believe there is strong evidence that suppliers of canned tuna to Walmart conspired to artificially inflate and wrongfully fix prices in order to increase their own profits at the expense of consumers,” a Walmart spokesperson told the Washington Post .

Walmart also alleges that the price of tuna should’ve fallen due to decreased consumer demand—but it didn’t, which meant that both the retail giant and its customers were paying too much for canned tuna. According to research conducted by Cornell University and the New York Sea Grant Extension Program, canned tuna makes up about 60 percent of all of the canned seafood consumed in the United States, but the amount of tuna eaten per-person each year has fallen from a high of 3.9 pounds in 1989 to 2.1 pounds in 2016.

That means prices should’ve fallen too, but… they didn’t. So sorry, Donald, but we’re gonna have to say it: Yes, collusion.