The federal government has intervened in the ongoing antitrust litigation against the makers of Starkist, Bumble Bee, and Chicken of the Sea canned tuna.

The Department of Justice filed a motion seeking a pause on discovery proceedings in order to concentrate on a pending federal grand jury investigation in Northern California involving allegations of price fixing.

The court granted the government’s unopposed motion to intervene in the proceedings at a status conference with attorneys representing several consumer and competitor plaintiffs in the consolidated action.

The Justice Department claimed that because the original civil lawsuit shares “common questions of fact and law” with the federal government’s own ongoing criminal investigation, a stay should be granted.

Judge Janis Sammartino agreed and approved the Department of Justice’s motion to intervene Jan. 20, which also means a delay to the original canned tuna price fixing lawsuit while the federal grand jury investigation continues. The motion was unopposed.

“I’ve given so much thought as to how to structure this and streamline this,” Judge Sammartino said, “I’d love to see less than four tracks, but that might not happen because all the interests need to be represented. What is it going to take to move this large case forward in a way that’s efficient?”

Canned Tuna Price Fixing Allegations

The original canned tuna price fixing lawsuit filed by New York-based Olean Wholesale Grocery Cooperative in August names Pittsburgh’s StarKist Co., as well as Bumble Bee Foods and Tri-Union Seafoods, which trades under Chicken of the Sea. The latter are both based in San Diego.

In the original lawsuit, Olean Wholesale Grocery claimed the three largest domestic manufacturers of canned tuna have been conspiring to fix prices of their seafood in tins, pouches and ready-to-eat serving packages starting “no later than July 24, 2011.”

Similar canned tuna price fixing lawsuits have been filed by other distributors, restaurants and grocery stores across the country, including grocers Giant Eagle, Albertsons, and Kroger.

According to a May 2012 presentation by Bumble Bee, total U.S. retail sales of shelf-stable seafood products were $2.3 billion in 2011 and about $2.4 billion the following year, as cited in the lawsuit. Of that total, canned tuna represents about 73 percent.

Bumble Bee, StarKist and Chicken of the Sea are the three largest domestic manufacturers of canned seafood products and “the industry is highly concentrated,” according to the Olean lawsuit.

Bumble Bee had a 29 percent slice of the shelf-stable seafood market in 2011, followed by StarKist at 25.3 percent and Chicken of the Sea at 18.4 percent. Culled down to just tuna products, StarKist’s chunk of the market swells to 34.6 percent, followed by Bumble Bee at 27.8 percent and Chicken of the Sea at 19.4 percent, according to court documents.

“This oligopolistic structure within the industry is the result of recent mergers and acquisitions,” the Olean lawsuit states, which consolidated the industry’s players.  Olean also claims the companies had several opportunities to collude on prices.

Among those opportunities, the canned tuna lawsuit cites the 2008 acquisition of StarKist by South Korean firm Dongwon Enterprise from Del Monte Foods for $363 million.

The documents also note a recent deal that collapsed last year after the parent company of Chicken of the Sea, Thailand-based Thai Union Frozen, announced it would buy Bumble Bee for $1.51 billion.

The merger would have “created a virtual duopoly, with the combined entity substantially exceeding the market share of StarKist,” the lawsuit states. But the deal was nixed in light of a grand jury investigation launched by the antitrust division of the Department of Justice.

Additionally, StarKist, Bumble Bee and Chicken of the Sea worked on a “Tuna the Wonderfish” advertising campaign through the National Fisheries Institute’s Tuna Council from 2011-2012, the canned tuna lawsuit states.

Another opportunity was also provided through co-packing agreements between Bumble Bee and Chicken of the Sea.

“Thus, even before the proposed merger, these two companies were cooperating closely,” the lawsuit states.

Furthermore, during the status conference, the plaintiffs requested the canned tuna defendants turn over all documents relating to the DOJs grand jury investigation before entering a consolidated amended complaint.

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