If you had to guess which popular food brand found itself in the PR hot seat last week, you probably wouldn’t have guessed StarKist Tuna, and yet, that’s exactly what happened. The brand was obliged to plead guilty to a price fixing allegation that could wind up costing the company $100 million, as well as a loss of face in the consumer market.
While most shoppers don’t worry too much when a brand changes a logo or tries to get an edge in the marketplace, when that company is accused of price fixing, people stop and pay attention. According to prosecutors, StarKist “colluded” with two other major brands to keep their prices “artificially inflated.”
Now, the company has been caught, publicly outed, and forced to admit culpability. What remained to be seen is if they would accept responsibility. To date, StarKist has taken a step in that direction. CEO Andrew Choe said, “We have cooperated with the DOJ during the course of its investigation and accept responsibility… We will continue to conduct our business with the utmost transparency and integrity.”
Those who have been following the case say it was just StarKist’s turn. After all, its co-conspirators have already been pushed out into the harsh spotlight of negative media attention.
Back in 2015, Chicken of the Sea attempted to buy Bumble Bee, but that attempt failed to be realized. At that point, Chicken of the Sea executives went to federal authorities and admitted to a conspiracy to inflate prices that involved them, Bumble Bee and StarKist. Subsequently, Bumble Bee paid a $25 million fine, which was more than $100 million lower than prosecutors had asked for. Given that information, it was only a matter of time before StarKist faced the music.
So, what does this mean for all three companies? Well, each has a black eye from all the proceedings. StarKist has yet to hear its penalty, and Bumble Bee, which is still struggling financially, now has to be a fine over the next five years.
But what does that mean for their brand bottom line? Hard to say, but it’s not helping when the Assistant Attorney General is pointing out that “the conspiracy to fix prices on these household staples had direct effects on the pocketbooks of American consumers…”
If that narrative takes hold, the fines may be the least of these tuna companies’ worries. No grocery brand wants to be on the bad side of cost-conscious American shoppers, especially when there are easy alternatives to choose.