The former CEO of Bumble Bee Foods, jailed last week in America for more than three years over canned tuna price fixing, has released a statement in response to sentencing.
Christopher Lischewski’s statement, which can be downloaded in full here, says that unforeseen circumstances led to tremendous cost inflation in the sector.
It says albacore was impacted by the tsunami that hit Japan in March 2011, resulting in the Fukushima nuclear disaster. This caused a loss of electricity throughout large areas of Japan destroyed much of the frozen tuna in Japan’s cold store facilities. Long line fishing vessels that traditionally fished for albacore tuna switched to other species of tuna (bigeye and yellowfin) to rebuild Japanese inventories.
Skipjack faced different supply challenges in 2011 and 2012 including a strong La Nina weather event in the Pacific Ocean, and increasing conservation measures that incorporated temporary fishery closures.
The statement continues, these events led to unanticipated tuna supply shortages resulting in record fish cost inflation. Albacore reached $3,200/ton, up almost 50% from the end of 2010, and skipjack reached $2,270/ton, up more than 130%. Albacore tuna makes up about 80% of the cost of a can of solid white tuna and skipjack tuna represents about 65% of the cost of a can of chunk light tuna.
Analysis by Dr. Joseph Levinsohn, an expert witness called by the defense and an economist at Yale University, said that based on a 15 year analysis of actual monthly price and cost data from 2002 – 2016, customers were under-charged during the purported conspiracy period, according to Mr Lischewski’s statement.
“The sentence will serve as a deterrent in the C-suite and the boardroom.”
One June 16th, the Department of Justice announced that Christopher Lischewski, was sentenced to serve 40 months in jail and pay a $100,000 criminal fine for his leadership role in a three-year antitrust conspiracy to fix canned tuna prices.
Mr Lischewski was charged on May 16, 2018 and in a four-week trial in late 2019, he was convicted on the single count of participating in a conspiracy to fix prices of canned tuna. In sentencing on June 16th, the court found that Lischewski was a leader or organiser of the conspiracy and that it affected over $600 million dollars of canned tuna sales.
Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division, said, “The sentence imposed will serve as a significant deterrent in the C-suite and the boardroom.”
“Executives who cheat American consumers out of the benefits of competition will be brought to justice, particularly when their antitrust crimes affect the most basic necessity, food. Today’s sentence reflects the serious harm that resulted from the multi-year conspiracy to fix prices of canned tuna.”
FBI San Francisco Division Special Agent in Charge, John F. Bennett, said, “This sentence is the result of our commitment to holding corporations and senior leadership accountable for their actions, whether they operate in the food supply industry or elsewhere.
“This brings us closer to our goal; allowing our citizens to be able to purchase food in an unbiased market within an efficient and fair economy, free of corporate greed.”
Bumble Bee pleaded guilty and was sentenced to pay a $25 million criminal fine. In September, StarKist Co. was sentenced to pay a statutory maximum $100 million criminal fine. In addition to Bumble Bee and StarKist, four executives, including Lischewski, were charged in the investigation. The other three executives pleaded guilty and testified in Lischewski’s trial.
