Is salmon price-fixing cartel the food sector’s next scandal?

The CMA found scant evidence of profiteering in the food industry in its probes last year. But in the salmon sector, the waters are looking far murkier.

Campaigners launched a major legal action in the UK last week over an alleged price-fixing cartel involving six major salmon producers.

It is claimed the businesses colluded to push up wholesale prices by up to 20% from October 2015 to June 2019.

The group action is led by Waterside Class, a company that was specifically formed to fight the case.

It is seeking redress to the tune of £382m via the UK judiciary’s Competition Appeal Tribunal. That compensation will go to consumers who bought certain farmed Atlantic salmon products from UK grocery retailers during the four-year period.

The producers targeted by the claims are Mowi and its subsidiary Mowi Holdings, along with SalMar, Lerøy, Scottish Sea Farms and Grieg.

Alleged manipulation

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

It is also claimed that they unlawfully exchanged commercially sensitive information about the price and volumes of salmon sales.

Senior executives at rival companies “planned to rig prices via email, and at various meetings and ‘working dinners’”, Waterside alleges.

“It is claimed that this was cartel behaviour and a breach of competition laws,” the company says.

These are by no means the only price-fixing accusations to have hit salmon producers in recent years. 

The European Commission launched a probe into another group of suppliers in 2019. In January this year, the EC published a ‘preliminary view’ that they had illegally colluded to distort competition in the spot market for Norwegian farmed Atlantic salmon in the EU. Further updates are pending.

Yet another claim, similarly alleging price-fixing by 13 of the sector’s biggest players, was lodged on behalf of Asda, Iceland, M&S, Ocado, Morrisons, Aldi and Co-op in March. It sought redress of £675m via the same UK Competition Appeal Tribunal petitioned by Waterside.

Finally, some of the six firms pursued by Waterside – Mowi, SalMar, Lerøy and Grieg – came to an $85m out of court settlement last year in a US class action over similar allegations.

In the latest claim, Waterside alleges the six producers “charged higher prices to supermarkets and other retailers in the first instance; then the retailers passed on the majority of the price increases to consumers”.

It was therefore consumers who “bore the majority of the expense of artificial price rises – based on evidence of retail price changes, and the pricing power held by retailers to pass higher prices on”, it argues.

“This action claims some of the industry’s biggest companies conspired to raid the wallets of hard-working shoppers,” says Anne Heal, director of Waterside.

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The case has been brought on an opt-out and no-win no-fee basis. It means all UK consumers who bought Atlantic salmon from a grocery retailer between October 2015 and May 2019 are included as class members unless they opt out, and are potentially entitled to compensation that will be divided equally between them.

Of the suppliers who responded to The Grocer’s request for comment, Mowi said it “had not been involved in any anti-competitive conduct and believe the allegations are unfounded”.

Grieg Seafood CEO Andreas Kvame said the company had not yet received the lawsuit. “However, as we have communicated in the past, Grieg Seafood denies any anti-trust infringements or anti-competitive behaviour,” he added.

A spokesman for Waterside says the next step will be a registration at the court and early preliminary hearings over the scope of the action. Once the case is fully certified by the tribunal, a long and exhaustive legal process could take years to conclude, he adds, unless the producers settle.

Whatever the outcome, it’s a clear signal the net is tightening on the salmon sector.