Bumble Bee VP agrees to guilty plea in seafood price-fixing probe

10 January 2017 12:10pm
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7 December 2016. By Leah Nylen and Joshua Sisco.

Bumble Bee Foods' senior vice president of sales agreed to plead guilty to charges he conspired to fix prices on packaged seafood sold in the US, the Department of Justice said Wednesday.

The charges filed against W. Scott Cameron mark the first in the DOJ's probe, which has targeted other major tuna brands including StarKist, owned by Thailand-based Thai Union Frozen Foods, and Chicken of the Sea, part of South Korea's Dongwon Industries.

Cameron allegedly conspired with other packaged seafood companies from 2011 until 2013 to fix prices on products including shelf-stable canned tuna, according to an information filed in federal court in San Francisco.

The court documents don't identify Bumble Bee, which is owned by private equity firm Lion Capital, referring to Cameron as a senior executive of Company A.

In a press release, DOJ officials said that Cameron will plead guilty to the charge, pay a criminal fine and cooperate with the investigation.

Cameron, who is still listed in the company's phone directory, didn't respond to a voicemail. A spokeswoman for Bumble Bee said Cameron remains an employee and is on paid leave.

In a statement, Bumble Bee said it hopes to reach its own resolution with federal prosecutors early next year.

"Bumble Bee continues to fully cooperate with the Department of Justice in regards to its ongoing investigation into the packaged seafood industry. Scott has also cooperated with the Company and with the Department of Justice in the investigation," said Jill Irvin, senior vice president and general counsel. "The Company is hopeful that it can reach a resolution with DOJ on this matter, as it relates to the Company, in early 2017."

She declined further comment, citing the ongoing investigation.

Thai Union announced in December 2014 that it had agreed to buy Bumble Bee Seafoods from Lion Capital for $1.5 billion. The following July, the company disclosed that it had received a subpoena and it announced that it was canceling a stock offering to finance the deal. The tie-up was later abandoned.

It is understood that during the course of the DOJ's merger review, evidence of the cartel was uncovered. It is understood that Chicken of the Sea then sought leniency from the DOJ, which grants full immunity to the first company to come forward and admit to cartel violations.

The San Francisco office of the Justice Department's antitrust division is conducting the investigation. Subpoenas are understood to have been sent out in mid-July 2015 to Chicken of the Sea and its two major competitors, Bumble Bee and Starkist.

Plaintiffs groups have sued the companies seeking damages for the alleged price-fixing, and prosecutors recently requested an extended discovery stay in related civil litigation through Sept. 30, 2017 to protect the secrecy of the grand jury. A stay had been set to expire at the end of the year.

In the meantime, the companies have asked a federal judge to dismiss the cases, and a hearing on those motions is set for next week.

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