Tuna executive accuses boss of directing price-fixing scheme

SAN FRANCISCO -- Christopher Lischewski, the one-time Bumble Bee Foods CEO on trial for directing a price-fixing conspiracy across three major packaged seafood companies, pressed company leadership to collude with competitors, a former Bumble Bee marketing executive testified Friday.

Kenneth Worsham said his former boss not only knew of illicit discussions he and others were having with the competition but also pressured them to continue doing so as the company was embroiled in a price war and under new ownership.

Lischewski, who resigned as CEO of Bumble Bee Foods LLC 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 pled guilty to price-fixing in May 2017 and paid a $25 million fine. Two of the company's executives, Worsham and Walter Scott Cameron, agreed to cooperate with federal prosecutors and testify for leniency.

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

Worsham corroborated he illicitly spoke with Starkist executives Charles Handford and Stephen Hodge about when and by how much they would increase and lower prices. The agreement was reached amidst a price war and soaring costs of fish in the industry, which resulted in declining profits for both companies.

Worsham said Liscewhski had "final sign off" on every price change coordinated with competitors. The two, in addition to Cameron, met often to discuss "alignment and agreements in terms of pricing activity moving forward," he continued.

"Chris knew exactly what I was doing," Worsham said. "He never objected to anything. He knew who my contacts were, and he had contacts of his own at his level of the trade."

Federal prosecutors presented an email summarizing a meeting between top industry executives, including Chicken of the Sea CEO Shue Wing Chan, in which Lischewski communicated he was willing to lower prices, but he had "good and understanding shareholders if the time comes to fight" and raise prices.

Asked by Department of Justice attorney Leslie Wulff about his reaction to the email, Worsham said he was "surprised that [Lischewski] had conversations going on at this level behind the scenes."

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

Lischewski was a "very aggressive manager," according to Worsham. The one-time senior vice president of trade marketing said his former boss was "never satisfied with the status quo" and was "always challenging us to do more."

After Lion Capital LLP, a private equity firm, acquired Bumble Bee in 2010 amidst the price war and rising costs of fish, Lischewski's expectations "were higher than what they normally were" Worsham testified. He estimated benchmarks for 2011 were "three times higher" than the year prior because of a "number of influences coming together."

"Fish prices were moving at historic levels -- levels we just couldn't keep up with," he said.

Keker Van Nest & Peters attorneys representing Lischewski will cross-examine Worsham on Monday.