October 23, 2018
Charlie the Tuna is “on the hook” for a felony. StarKist—which has long been represented by the cartoon mascot (or spokes-tuna) in its brand advertising—has agreed to plead guilty for its role in a conspiracy to fix prices of packaged seafood sold in the United States, the Department of Justice announced on October 18.
The DOJ said StarKist—which is owned by Dongwon Industries of South Korea— faces up to a $100 million fine when it is sentenced, the Chicago Tribune reported. In addition to pleading guilty, StarKist has agreed to cooperate in the investigation.
Prosecutors allege that the industry’s top three companies conspired between 2010 and 2013 to keep prices artificially high.
“The conspiracy to fix prices on these household staples had direct effects on the pocketbooks of American consumers,” said Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division. “All Americans have the right to the benefits of free and open competition—the best goods and services at a price free from collusion. We will continue to hold companies and individuals who cheat consumers accountable.”
“Our citizens’ confidence in the ability to buy goods within an unbiased market is key to sustaining an efficient and fair economy,” said Special Agent in Charge John F. Bennett, FBI-San Francisco. “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.”
“We have cooperated with the DOJ during the course of its investigation and accept responsibility,” said StarKist CEO Andrew Choe in a formal company statement, adding, “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.”
The scheme came to light when Thai Union Group‘s Chicken of the Sea tuna brand attempted 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, the Tribune reported. 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.
Two former executives of Bumble Bee and one from StarKist have also each pleaded guilty to price-fixing charges. None of them have been sentenced, the Tribune said..
In addition, the three companies face mounting lawsuits from wholesalers, food service companies, and retailers—among them, Walmart, Target, and Kroger.
Research contact: @TheJusticeDept