Starkist executive provides details of tuna price-fixing network

SAN FRANCISCO — A former Starkist Co. sales executive on Wednesday detailed a vast network of co-conspirators across three major packaged seafood companies that colluded to fix the prices of canned tuna.

Stephen Hodge recounted several conversations with executives at Bumble Bee Foods LLC — all allegedly working under the direction of one-time CEO Christopher Lischewski — discussing where they “were going in regard to pricing.”

Lischewski, who resigned as CEO of Bumble Bee in 2018, is on trial over accusations he masterminded the scheme that included StarKist Co. and Chicken of the Sea. He faces up to ten years in prison if convicted.

Bumble Bee pleaded guilty to price-fixing in May 2017 and paid a $25 million fine.

U.S. District Judge Edward Chen is overseeing the trial.

Hodge admitted he plotted with former Bumble Bee executive Kenneth Worsham to coordinate when and by how much they would increase and lower prices.

Federal prosecutors presented an email sent to Hodge relaying Bumble Bee would be “waiving the white flag” on one of its signature products, meaning it would lower prices amidst a “price war” between the two companies, according to the former Starkist senior vice president of sales

Asked by Department of Justice attorney Leslie Wulff if Bumble Bee “expected anything in return,” Hodge responded the company “was expecting us to do the same and not be so aggressive.”

In another email from a Starkist executive complaining about “prices lower than anticipated” from Bumble Bee, Hodge testified he called his source at the company to ask what happened. He said Worsham told him “they had to sometimes price aggressively to keep volume where it needed to be.”

“[Worsham] told me he’s trying to stay alive and keep his distribution,” Hodge said. “He was trying to push back.”

While Hodge was colluding with Worsham, fellow Starkist executive Charles Handford was allegedly scheming with former Bumble Bee senior vice president of sales Walter Scott Cameron.

Cameron, the government’s key witness to allegations Lischewski led the conspiracy, testified last week his former boss was intimately aware of communications between him and Handford to discuss price-fixing.

Hodge, Worsham and Cameron agreed to cooperate in the antitrust division of the Department of Justice’s investigation and testify for leniency.

The three companies colluded to fix canned tuna prices from 2010 to 2013. Lischewski led the conspiracy, according to the government’s indictment. U.S. v. Lischewski, 18-CR0203 (N.D. Cal., filed May 16, 2018).

Christopher Kearney, representing Lischewski, offered a competing narrative over why Starkist was raising prices, during his examination of hodge. Kearney attributed the increases to a well-noted “price war” between the packaged seafood companies.

Hodge agreed when asked by the Keker, Van Nest & Peters LLP partner if he and his colleagues “talked repeatedly about having to raise prices because of a dramatic increase in fish costs.”

In an email to Hodge, Handford wrote “we all know we have to [raise prices] with fish costs where they are.”

Dongwon Enterprise-owned StarKist Co. was ordered to pay $100 million in Oct. 2018 after pleading guilty to felony price-fixing charges.

Tri-Union Seafoods, owner of Chicken of the Sea, which alerted federal prosecutors to the scheme, traded cooperation for immunity.

Worsham will take the stand on Friday after Hodge completes his testimony.