Tuna executive says he feared retaliation if he didn’t collude

SAN FRANCISCO -- Christopher Lischewski, the one-time Bumble Bee Foods CEO being tried on charges of directing a price-fixing conspiracy, regularly discouraged Chicken of the Sea from "promoting aggressively" in accordance with pricing agreements, the company's former top executive testified on Wednesday.

Shue Wing Chan said he routinely had to assure Lischewski he was still adhering to the arrangement between three major packaged seafood companies "so he didn't retaliate."

Lischewski resigned as CEO of Bumble Bee in 2018 and is accused of masterminding a price-fixing plot that allegedly included StarKist Co. and Chicken of the Sea. He faces up to 10 years in prison if convicted in a trial before U.S. District Judge Edward Chen.

Bumble Bee pleaded guilty to price-fixing in May 2017 and paid a $25 million fine. Two of the company's executives, Kenneth Worsham and Walter Scott Cameron, agreed to cooperate with federal prosecutors and testify for potential leniency.

Thai Union Group, which owns Chicken of the Sea and alerted federal prosecutors to the alleged scheme, traded cooperation for immunity.

Chan is now an executive at Thai Union.

Asked by Department of Justice attorney Manish Kumar why Lischewski arranged a meeting with him in 2012, Chan said it was initially to discuss a co-packing agreement in which the two companies would use each other's plants to package their products. Chan testified the conversation then strayed to Chicken of the Sea's promotional activity.

Chan said it was important for him to explain to Lischewski it wasn't his "intention or strategy to promote aggressively," and he "needed him to know so he didn't retaliate."

The two left the meeting with an agreement that they would both minimize promotions, according to Chan.

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

On cross-examination, defense attorney Elliot Peters disputed Chan's claim that Bumble Bee and Chicken of the Sea came to explicit agreements about the conspiracy. He asked Chan whether Lischewski ever told him anything about his company's pricing or promotional strategy, to which Chan responded he didn't remember.

"In discussions you had with Lischewski, did he ever make spoken, explicit commitments to you on Bumble Bee's pricing?" Peters said.

"No," Chan responded.

The discussions between Lischewski and Chan were not about coordinating prices but the co-packing agreement between the two companies, the Keker Van Nest & Peters partner argued. He presented a number of emails setting up meetings that Chan agreed were about the lawful arrangement.

"Your meetings about the co-pack had nothing to do with tuna pricing, correct?" Peters asked.

Chan said, "It was just the one meeting we had one-on-one on pricing." He agreed other in-person conversations had nothing to do with an alleged scheme.

Dongwon Enterprise-owned StarKist Co. was ordered to pay $100 million in October 2018 after pleading guilty to felony price-fixing charges. Its former senior vice president of sales, Stephen Hodge, testified last week after entering into a plea agreement with the Department of Justice.

A host of canned tuna sellers have sued the three companies. Starkist faces millions of dollars in damages from a civil trial in the Southern District of California.

An FBI special agent will testify on Friday about Lischewski's emails.