An American wholesalers group is suing the three biggest providers of canned tuna in the United States, alleging the companies conspired to fix prices.
Olean Wholesale Grocery Cooperative, based in Olean, N.Y., USA, is suing StarKist, Bumble Bee and Tri-Union Seafoods, a subsidiary of Thai Union Frozen Products (TUF), according to Courthouse News Service. Tri-Union sells tuna in the United States under the brand name Chicken of the Sea.
The lawsuit, filed in U.S. Federal Court, alleges that all three companies made a deal to "fix, raise, maintain, and/or stabilize prices for PSPs [packaged seafood products] within the United States, its territories and the District of Columbia in violation (of) Sections 1 and 3 of the Sherman Antitrust Act.”
The U.S. Federal Trade Commission defines price fixing as any agreement by competing companies to set prices for their products independently of what supply and demand would normally dictate. Such agreements would give the colluding companies the ability to control the market and, according to the commission’s website, “the result is often higher prices.” Such behavior, if proven, raises red flags with antitrust regulators, and, according to the commission, “is almost always illegal.”
The lawsuit, according to the article, alleges the three companies together comprise 73 percent of the market in the United States, and notes consumption of canned seafood products has fallen nationally in recent years. Despite this, Olean claims it purchased from one or more of the companies and “suffered pecuniary injury,” or financial hardship of some kind.
“One would expect rational businesses to reduce the prices for PSPs, but that did not happen,” the article quoted from the lawsuit.
TUF has already had hints of antitrust trouble to deal with. After announcing in December 2014 it was planning to purchase Bumble Bee for USD 1.5 billion (EUR 1.4 billion), it later suspended a plan to finance the purchase with share offerings in light of an investigation into the proposed merger by the U.S. Department of Justice.
The new lawsuit describes this process as proof of collusion, and cites the department’s subpoenas issued to all three tuna companies as “significant.”
According to the Courthouse News Service article, Olean claims TUF’s proposed merger "would have created a virtual duopoly, with the combined entity exceeding the market share of StarKist."
Responses from Bumble Bee, StarKist and Chicken of the Sea were not immediately available.
