Antitrust Litigation & Investigations

Salmon Industry Faces Price-Fixing Lawsuits in the U.S. Following Raids in Europe

National Security vs. Investment: Are we striking the right balance?

Commercial U.S. buyers of Farmed Atlantic Salmon have sued many of the leaders of what they maintain is a global cartel that has colluded to fix and drive up prices. The European Commission is investigating them as well, kicking off its probe with simultaneous raids of plants operated by Norwegian companies.

In Re Farm-Raised Salmon and Salmon Products Litigation is the combination of several lawsuits brought by salmon purchasers. According to one of those complaints, filed by Beacon Fisheries on May 15, 2019, the salmon producers “must collude” to keep prices stable in the face of fluctuating supply and demand during what is a long production cycle.

U.S. Judge Cecilia M. Altonaga in Miami is presiding over the case, which brings together the claims of plaintiffs Beacon Fisheries, Euclid Fish Company, Cape Florida Seafood, Schneider Fish and Sea Food Corp., Hesh’s Seafood, and The Fishing Line LLC. Another case brought by Wood Mountain Fish has not yet been combined. Judge Altonaga has ordered plaintiffs file a new consolidated complaint by Aug. 19, 2019.

A similar case was filed on May 9 in U.S. District Court in Maine by Prime Steakhouse.

The defendants in these actions include Norway’s Mowi ASA, formerly Marine Harvest, by far the market leader, Grieg Seafood ASA, Lerøy Seafood Group ASA, SalMar ASA, Scottish Sea Farms Ltd., Bremnes Seashore AS, Ocean Quality AS, and several of their respective subsidiaries.

U.S. buyers purchase salmon under long-term contracts and must pay whatever prices are set.

The prices fluctuate month to month and are not negotiable. U.S. buyers are a captive market since they are reluctant to change suppliers. The prices from different suppliers have continued to rise and the prices among them are virtually the same. Suppliers simply do not compete with each other on price in the U.S.

According to the United Nations Food & Agriculture Organization, salmon prices continue to exceed their three-year average. Production is slowing but steady and export revenues are climbing. Demand is up across the world. The pace of growth of global demand for salmon is such that the market can absorb an increase in supply of 6–7 percent per year and while maintaining current price levels, according to a recent analysis from Norwegian bank Nordea.

Allegations of price fixing in the U.S. followed European Commission raids of a number of fisheries operated by Norwegian companies, including offices in Scotland and the Netherlands, acting on information that they were participating in “anti-competitive agreements and/or concerted practices related to different ways of price coordination in order to sustain and possibly increase the prices for Norwegian salmon.” Norway is not a member of the EU and that country’s anticompetition authority was reportedly not involved in the raids.

Since at least November 2017, the EC says, the Norwegian producers have been allegedly:

  • Coordinating sale prices and exchanging commercially sensitive information.
  • Agreeing to purchase production from other competitors when these other competitors sell at lower prices.
  • Applying a coordinated strategy to increase spot prices of farmed Norwegian salmon in order to secure higher price levels for long-term contracts.
  • Pro-industry commentators say the EC investigation was the result of non-Norwegian and non-British companies who are struggling to compete. They cited instances such as in 2014 when producers in Poland made similar price-fixing allegations.

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