- Former StarKist Senior Vice President of Sales Stephen Hodge was charged with price fixing in a California federal court last week, according to a Reuters article.
- According to the criminal information filed in the case, prosecutors believe from 2010 until 2013, Hodge had meetings and discussions with representatives from other packaged seafood companies to "fix, raise and maintain prices" of products sold in the United States.
- StarKist is one of three large producers of canned seafood in the United States. Executives from one of the others, Bumble Bee Foods, pleaded guilty to similar charges of price fixing in December. The company itself also pleaded guilty to a similar charge and agreed to pay a $25 million criminal fine.
Last year, as former Bumble Bee executives pleaded guilty to price fixing charges, the big question hanging in the air was how far the scandal would stretch. After all, if executives from one company had worked to fix prices, they had to be conspiring with someone.
Now the extent of the potential conspiracy is becoming more known. But this isn't the only recent litigation about tuna price fixing. Last October, Walmart filed a case in an Arkansas federal court claiming that executives from all three major tuna companies — Bumble Bee, StarKist and Tri-Union Foods, which does business as Chicken of the Sea — colluded for more than a decade to fix tuna prices. This case, recently updated and transferred to a California federal court, claims more than 50 executives were involved in a plan to reduce can sizes and keep prices high despite waning demand.
Accusations of price fixing are not unique to tuna, but those accused of doing it have recently been thrust into the spotlight and exposed. After a class-action lawsuit was filed against major poultry providers — including Tyson, Pilgrim's Pride and Sanderson Farms — the Georgia Department of Agriculture indefinitely suspended the Georgia Dock poultry pricing index. Critics said prices on the Georgia Dock, which were reported by producers themselves, were 30% to 60% higher than others. While there have been no criminal charges filed about the Georgia Dock, the abandonment of the index shows increased regulatory attention to potential price fixing.
Earlier this year, dairy group Cooperatives Working Together, which produces about 70% of all U.S. milk, settled a class action lawsuit brought by animal rights group Compassion Over Killing for $52 million. The lawsuit claimed CWT artificially inflated the price of milk and other dairy products by killing hundreds of thousands of cows.This also did not result in criminal charges, and a statement at the time from National Milk Producers Federation President and CEO Jim Mulhern stressed "the court has found no antitrust violation and CWT makes no admission of wrongdoing in this settlement."
As more attention is being paid to consumers' rights, it is a sure bet that price-fixing conspiracies — or even situations that could be characterized that way but don't rise to the level of criminal charges — will continue to be exposed. It also will be surprising if this new charge is the end of the criminal dragnet of charges against tuna company executives for price fixing. But even more shocking would be if the industry doesn't pay attention to this trend and continues engaging in activities that could be seen as deceptive toward consumers.