How America’s canned tuna industry went belly up
New York City, NEW YORK — This story is about the canned tuna business and the three big companies that dominate it. It’s a story about price fixing, and it’s a saga so dark and disruptive those companies are still reeling from it, facing bankruptcy, legal action, even prison time. It’s a story that upended a century-old industry—but if you ask Cliff White, executive editor of the news website SeafoodSource, he’ll tell you there’s way more at stake than just business: “Price fixing is absolutely wrong, especially for a product that people depend on. That’s the difference between them eating dinner and not eating dinner. That’s canned tuna. We’re not talking about bluefin toro that’s served at Nobu.”
There were once dozens of independent tuna canners, but by the 1960s the industry had consolidated, with just three companies combining for 80 percent of market share. StarKist, the No. 1 brand in the category for many years running, was founded in 1917 by a Croatian immigrant in California. Chicken of the Sea, known as the discount brand with cheaper prices, was founded in 1914, also in California. Bumble Bee started as an association of canners in Oregon back in the 1890s.
Tuna’s big three brands thrived in the 1960s and into the early ’70s, but then the tide turned. The 1970s saw consumers increasingly worried about the tuna they were eating. They worried about how much mercury they were absorbing along with the tuna, and they worried about the other ocean life getting swept up in the tuna boats’ big nets, especially the dolphins. Perhaps the biggest problem for the industry in recent years, though, is the consumer’s changing palate. Canned tuna was a staple of the mid–20th century American pantry, but per capita, canned tuna consumption has dropped around 40 percent since the mid-1980s. “I think canned tuna is looked at as—no offense—an old person’s product,” says Cliff White. “I don’t see too many of my peers in the 35-and-under cohort eating too much canned tuna.”
Canning facilities for the big three companies have shifted away from the West Coast. They’ve moved, in some cases, to territories like Puerto Rico and American Samoa, where wages are lower but, because they’re still technically on U.S. soil, there aren’t any import tariffs. Those big three brands themselves have changed ownership again and again over the years, with companies like Pillsbury, Heinz, and Ralston Purina all dipping their toes in the tuna business. These days, the big American tuna companies aren’t American. White says: “When you talk to the old tuna hands, what they’ll tell you is it’s a shame, because tuna used to be such an American industry. It’s an iconic American industry.”
By 2015, StarKist was owned by a South Korean conglomerate, Chicken of the Sea was owned by a company from Thailand, and Bumble Bee belonged to a British private equity firm. That was the year one of the big three tried to buy another—and this is when the fish really hit the fan. In 2015, Chicken of the Sea struck a deal to buy Bumble Bee. That would have left only two big players in the industry, a sort of canned-tuna duopoly. So the Department of Justice launched an antitrust review, and in the course of that review, the DOJ discovered something fishy. It turned out that for a few years the big three brands had been in cahoots with one another. They were illegally fixing prices, rigging the game so that each can of tuna on the grocery store shelf cost shoppers a few pennies more than it should have.
When the feds cracked down, Chicken of the Sea immediately turned stool pigeon of the sea and cooperated with the government to avoid prosecution. StarKist pleaded guilty, as did Bumble Bee, and together they paid fines totaling $125 million. Some high-up seafood executives got caught in the net. Those men mostly pleaded guilty, but one maintained his innocence. He insisted on a trial to prove he’d done nothing wrong, so the full prosecutorial weight of the U.S. Department of Justice was brought to bear against one tuna kingpin: Chris Lischewski, the longtime CEO of Bumble Bee.
A lot of saucy details came out at the trial. There was a fancy dinner at a Southern California steakhouse where a StarKist executive handed over a thumb drive full of pricing information. Chicken of the Sea’s chief operating officer testified that at one point he faked a car accident to get out of a meeting with Lischewski because he was so uncomfortable about getting roped into Lischewski’s scheming.