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StarKist sentenced to pay maximum $100M fine for tuna price-fixing conspiracy

James Leggate

Tuna seller StarKist will have to pay a $100 million criminal fine for its role in a conspiracy to fix prices, U.S. Department of Justice officials announced Wednesday.

StarKist, which is owned by South Korean company Dongwon Industries, pleaded guilty last year to price-fixing as authorities probed the canned tuna industry.

Andrew Choe, president and CEO of StarKist, said the company has addressed the actions required by its agreement with the government and it will continue to strengthen its compliance best practices.

“StarKist is committed to being a socially responsible company and doing the right thing,” said Andrew Choe, StarKist’s president and CEO. “We have cooperated with the DOJ during the course of its investigation and accept responsibility. We will continue to conduct our business with the utmost transparency and integrity.”

The fine represents the maximum penalty for the company’s antitrust conviction. StarKist had sought a lower fine of just $50 million, with the company's attorney asking the court to consider its 2,600 U.S. employees, the Associated Press reported.

U.S. District Judge Edward M. Chen found on Wednesday that the company had sufficient resources to pay the full $100 million fine.

"The goal of this court is to err on the side of providing some relief at the front end to StarKist because ... the next two years will be the crucial period, it seems to me," Chen said, according to the AP's report.

As part of the plea, StarKist agreed to cooperate with the investigation into tuna price-fixing. The investigation has produced six charges so far, authorities said.

“The consequences for greedy companies who cheat the marketplace and American consumers are significant and clear,” said John F. Bennett, special agent in charge of the FBI San Francisco.

In a statement provided to FOX Business, StarKist said the sentence would end its involvement in the investigation and resolve all its outstanding criminal antitrust issues.

Scott Meece, StarKist's general counsel, said the company will likely have to make cuts, either as layoffs or moving its plant from American Samoa to Thailand, the AP reported.

"These employees have had this hanging over their heads for a long time," he said. "They're worried about what is going to happen to their jobs."

The price-fixing scheme was revealed by a failed attempt by Chicken of the Sea to buy rival tuna seller Bumble Bee Foods, officials previously said. Chicken of the Sea executives tipped off federal investigators in exchange for protection from prosecution in the probe.

Bumble Bee pleaded guilty in 2017. It paid a $25 million fine, well below the $111 million sought by prosecutors, in part because the company was reportedly struggling financially.

The Justice Department’s antitrust division and the FBI’s San Francisco field office have been conducting the investigation. Makan Delrahim, assistant attorney general with the antitrust division, said officials are committed to enforcing antitrust laws against companies that fix prices.

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“Hard-working Americans deserve the benefits of open competition when they spend their hard-earned money on items that stock kitchen shelves,” Delrahim said. “When a corporation cheats customers at the checkout line, the antitrust division will hold it accountable to the greatest extent."

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