What are the “cartel’s” allegations against salmon producers?

The CMA found scant evidence of speculation in the food industry in its investigations last year. But in the salmon sector, the waters are much murkier.

Activists launched a major legal action in the UK last week over an alleged price-fixing cartel involving six of the world’s largest salmon producers.

It is alleged that the companies colluded to raise wholesale prices by up to 20% above standards between October 2015 and June 2019.

The class action is being led by Waterside Class, a firm appointed specifically to handle the case.

The company is seeking £382m in damages through the UK Competition Appeal Tribunal. The compensation will go to consumers who bought certain farmed Atlantic salmon products from UK grocery retailers over a four-year period.

The producers concerned by these claims are Mowi and its subsidiary Mowi Holdings, as well as SalMar, Lerøy, Scottish Sea Farms and Grieg.

Alleged manipulation

The companies are accused of manipulating reference prices for Norwegian Atlantic salmon by using related entities to purchase fish at inflated prices.

It is also alleged that they unlawfully exchanged confidential commercial information relating to salmon sales prices and quantities.

Waterside alleges that senior executives from rival companies “planned to manipulate prices via emails and at various meetings and ‘working dinners’”.

“It is alleged that this was a cartel act and a breach of competition laws aimed at protecting consumers,” the company said.

These are by no means the only accusations of price fixing that have been leveled at salmon producers in recent years.

The European Commission opened an investigation into a similar group of major suppliers in 2019. In January this year, the EC published a preliminary “statement of objections” that they had illegally conspired to distort competition in the spot market for Norwegian Atlantic salmon in the EU. Further updates are expected.

A further claim, similarly alleging price-fixing by 13 of the sector’s biggest players, was filed on behalf of Asda, Iceland, M&S, Ocado, Morrisons, Aldi and Co-op in March. It sought £675m in damages through the same UK Competition Appeal Tribunal that Waterside brought, and is ongoing.

Finally, some of the six companies pursued by Waterside – Mowi, SalMar, Lerøy and Grieg – settled out of court for $85 million last year in a U.S. class action lawsuit involving similar allegations, without admitting guilt. Another settlement of $5 million Canadian by four companies and others not named in the Waterside case was also paid out in Canada last December.

In its latest claim, Waterside alleges that the six manufacturers “first charged higher prices to supermarkets and other retailers and then the retailers passed on most of the price increases to consumers”.

As a result, it was consumers who ultimately “bore most of the costs of the artificial price increases – based on evidence of actual retail price changes and the proven pricing power of retailers who were able to pass on the higher prices for farmed Atlantic salmon to their customers,” the report said.

“This action shows that some of the biggest companies in the industry have conspired to steal the wallets of hard-working customers,” says Anne Heal, a director at Waterside and former chief regulatory officer at BT.

“We aim to obtain fair redress for millions of British consumers who we claim have overpaid for years for one of the UK’s favourite and incredibly nutritious foods.”

Read more:

The case was brought on an opt-out, no-win, no-fee basis, meaning all UK consumers who bought Atlantic salmon from the food retailer between October 2015 and May 2019 are included as members of the group, unless they opt out, and potentially have a right to compensation, which will be shared equally between them.

If the legal action is successful, most class members will not have to submit any documents to receive compensation, Waterside says.

The case is being funded by Erso Capital, an “experienced litigation funder,” Waterside said, and the lawsuit is also insured.

Of the suppliers that responded to The Grocer’s request for comment, Mowi said it “has not engaged in any anti-competitive conduct and believes the allegations are without merit.”

Grieg Seafood CEO Andreas Kvame said the company had not yet received the lawsuit.

“We will investigate the alleged violation upon receipt. However, as previously reported, Grieg Seafood denies any antitrust violations or anti-competitive conduct and will exercise all of its rights of defense,” he added.

A Waterside spokesman says the next step will be court registration and early preliminary hearings on the scope of the action. Once the case is fully approved by the tribunal, the long and drawn-out legal process could take years, he adds, unless the producers decide to settle early.

Whatever the outcome, it is a clear signal that the salmon sector is becoming increasingly restrictive.