StarKist Pleads Guilty to Price Fixing and Faces $100 Million Fine

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StarKist agreed to plead guilty on Thursday to one felony charge of price fixing for its role in a broad conspiracy to rig the price of canned and ready-to-eat tuna, the Justice Department said.

The company faces a fine of up to $100 million for forcing shoppers to pay inflated prices from at least November 2011 through December 2013, the Justice Department said.

The amount is to be determined in a hearing by the United States District Court in San Francisco, which must also approve the terms of StarKist’s plea agreement. StarKist, an American subsidiary of Dongwon Industries of South Korea, has also agreed to cooperate with the federal investigation, which began in 2015.

“The conspiracy to fix prices on these household staples had direct effects on the pocketbooks of American consumers,” said Makan Delrahim, an assistant attorney general in the Justice Department’s antitrust division. “We will continue to hold companies and individuals who cheat consumers accountable.”

Andrew Choe, StarKist’s chief executive, said in a statement that the company had “cooperated with the D.O.J. during the course of its investigation” and would “accept responsibility.”

“We will continue to conduct our business with the utmost transparency and integrity,” Mr. Choe said, adding that the company had already begun to carry out parts of the plea agreement.

The conspiracy came to light in 2015, when Thai Union Frozen Products in Bangkok made an unsuccessful bid to buy Bumble Bee Foods, a San Diego company that was then struggling financially. Thai Union had already swallowed up Chicken of the Sea, and expected that the merger with Bumble Bee would propel it past StarKist to become the market leader in the United States.

But before the merger could happen, a food wholesaler in New York, Olean Wholesale Grocery Cooperative, filed a lawsuit in California. Raw tuna prices had fallen, Olean said in its complaint, and canned tuna prices ought to have followed them down, but did not. Olean said a wave of acquisitions in the canned seafood industry had already created an “oligopolistic structure,” which would be turned into “a virtual duopoly” if the planned merger went ahead.

It also cited occasions when the tuna companies would have had opportunities to collude on prices, such as a joint advertising campaign through the National Fisheries Institute’s Tuna Council from 2011 to 2012.

Other lawsuits followed, by grocers, restaurants, suppliers and retailers including Walmart, Target and Kroger.

In July 2015, Thai Union Frozen Products disclosed it had been subpoenaed by the Justice Department. The planned merger was called off.

Last year, Bumble Bee Foods pleaded guilty to the same felony price-fixing charge as StarKist did on Thursday, and paid a $25 million fine. That was less than the Justice Department had asked for, but prosecutors said they did not want to demand a fine so high as to put Bumble Bee out of business.

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