BIZ-BUMBLE-BEE-PRICEFIXING-SD

The former CEO of Bumble Bee Foods was sentenced last week to more than three years in jail for a conspiracy to fix tuna prices in the early 2010s.

The former chief executive of San Diego-based Bumble Bee Foods was sentenced last week to more than three years in jail and ordered to pay a $100,000 fine after a jury found him guilty of price fixing for canned tuna in a case brought by the U.S. Department of Justice.

Christopher Lischewski, who ran Bumble Bee for almost 20 years, was convicted in late 2019 in U.S. District Court in San Francisco on one count of conspiracy to fix tuna prices between November 2010 to December 2013.

In an interview with the San Diego Union-Tribune, Lischewski said he didn’t know about a conspiracy to fix prices and prosecutors presented no economic evidence of price fixing.

During the three years in question, gross profit margins for Bumble Bee, Starkist and Chicken of the Sea plunged amid rising costs, decreased consumer demand and the rise of private-label grocery brands, said Lischewski.

“I maintain my innocence,” he said. “We will file our appeal in the next couple weeks. Unfortunately, we expect that appeal to take 12 to 18 months, and I am going to choose to start my jail sentence within the next 60 days during the appeals process.”

Lischewski was the only tuna industry executive brought to trial by the Department of Justice. Four cooperating witnesses, including former sales executives at Bumble Bee and Skarkist who pleaded guilty, testified that Lischewski knew of the conspiracy, which prosecutors said affected over $600 million of canned tuna sales. Chicken of the Sea executives received amnesty for cooperating with prosecutors.

“The sentence imposed today will serve as a significant deterrent in the C-suite and the boardroom,” said Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division, in a statement. “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.”

Lischewski received a 40-month jail sentence. Initially, prosecutors sought a 10-year sentence and $1 million fine, but the penalties were reduced under federal sentencing guidelines.

In 2017, Bumble Bee, the market leader in North America’s canned tuna industry, was ordered to pay a $25 million criminal fine after pleading guilty in the case. In September, StarKist Co. was ordered to pay a statutory maximum $100 million criminal fine.

About 50 years ago, tuna was San Diego’s third-largest industry, employing about 40,000 workers in catching, canning and marketing the product. Today, a vast majority of the industry is located elsewhere.