Chicken of the Sea price fixing settlements totaling $39.5M approved


Dive Brief:

  • A California judge has granted preliminary approval to three settlements for which Chicken of the Sea International would pay a total of $39.5 million to resolve buyers’ claims that it colluded with other seafood brands to increase canned tuna prices, Law360 reported. The company had originally reached the deals earlier last year with the plaintiffs, but U.S. District Judge Dana M. Sabraw rejected them in November, requesting that it make changes.
  • The settlements include a $20 million deal between Chicken of the Sea’s parent company, Thai Union Group, and a class of end payors, Law360 reported. Another $13 million settlement was reached with a group of direct purchasers, and a $6.5 million deal with commercial food preparers. In 2019, Chicken of the Sea reached separate deals with Target and distributors Sysco Corp. and U.S. Foods.
  • The approved settlements cap nearly a decade of Chicken of the Sea’s involvement in a series of lawsuits focused on price fixing in the canned tuna industry. This included a U.S. Department of Justice investigation in which StarKist and Bumble Bee both pleaded guilty. Chicken of the Sea, which was the whistleblower in the investigation, wasn’t fined and its executives did not face charges, although it was still subject to civil lawsuits. 

Dive Insight:

Chicken of the Sea’s final round of settlements signals the end of its role in the price-fixing saga — and a chance to turn the page. 

Food Dive has reached out to parent company Thai Union for comment on the approved settlements with buyers. But in January 2021, after Thai Union first announced it had reached an agreement with the direct purchasers, it said in a statement that Chicken of the Sea had since made “dramatic changes to the way it does business and how it shapes the industry.” These include implementing a compliance and training program and revising its ethics code of conduct.

One area where Thai Union and Chicken of the Sea are trying to change the conversation is through transparency and sustainability. In 2015, Thai Union announced its SeaChange group of sustainability initiatives, which focus on positive change in its labor practices, sourcing, operations and communities.

Lat year, the tuna brand issued new transparency initiatives, including a commitment to the Ocean Disclosure Project. As a participant, Chicken of the Sea will publish its global supply chain data to inform consumers on the sourcing of its seafood.

Meanwhile, Thai Union has also showed interest in expanding beyond tuna, including an investment in cell-based seafood company BlueNalu through its venture fund last January.

For other the two major canned tuna companies, turning the corner won’t be quite as easy. Bumble Bee faced a $25 million criminal fine for its role in fixing prices. Its former CEO Chris Lischewski was found guilty for conspiring to fix prices and was sentenced to 40 months in prison in 2020. After filing for bankruptcy at the end of 2019, the company’s North American assets were purchased in early 2020 by Taiwan-based FCF Fishery for $928 million. Since then, the company has worked to rebrand its tuna as a healthy protein amid a renewed interest in packaged foods during the pandemic.

StarKist was hit with a $100 million fine from the federal investigation, and its former Vice President of Sales, Stephen Hodge, was charged for his role in the anticompetitive behavior in 2017. In 2019, the company settled a lawsuit from Walmart, the largest canned tuna retailer in the U.S., for $20.5 million. And this past November, a judge found the company civilly liable in a lawsuit by seafood purchasers, according to Law360.

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