2014 meeting with SalMar CEO Gustav Witzøe and Leroy CEO Henning Beltestad discussed in court.
On Wednesday this week, it was reported that salmon producers must now face the allegations that have been directed at them.
The allegation is that they exchanged competitively sensitive information among themselves.
Sensitive information
These include Mowi, SalMar, Lerøy, Bremnes and exporter Ocean Quality. Ocean Quality was the sales organisation of Grieg Seafood and Bremnes Seashore before it was closed.
The defendants denied these claims and moved to dismiss the lawsuit, but in a decision issued on Tuesday in Miami, Florida United States District Judge Cecilia M. Altonaga ruled that the case can move forward.
In one example, the report referred to Mowi, SalMar, Ocean Quality, Grieg and Lerøy participated in an emergency meeting to discuss the Russian ban and the potential fall-out on prices, agreeing “on the importance of not talking down prices.”
Trade ban
Russia introduced a trade ban on imports of main food commodities from the EU, USA, Canada, Australia and Norway.
The document wrote that “defendants’ prices ramped drastically upward in 2014 and 2015 despite Norwegian salmon producers losing their biggest traditional customer, Russia; the price increases resulted in huge profits for defendants”.
At this time, “one would have expected that each of the Norwegian Defendants would compete more vigorously with each other on prices in an effort to increase sales and thereby wrest market share from their rivals that did not happen. (…) Instead, defendants reacted by continuing their meetings and colluding together.”
Prices
“On April 4, 2014, SalMar’s Witzøe (SalMar’s largest shareholder) explained to its CEO Nordhammer that he had attended a dinner meeting with Lerøy’s [CEO] Beltestad, during which they discussed a pricing model for their salmon based on NASDAQ spot prices. Around the same time, Witzøe and Beltestad were communicating with Jim Gallagher of [Scottish Sea Farms] via email. In one of those emails, Gallagher referenced a recent conversation with Witzøe, and perhaps Beltestad as well, regarding NASDAQ prices. Gallagher confirmed that, as they had discussed, [Scottish Sea Farms] would make sure its prices were ahead of NASDAQ prices on a week-to-week basis”.
“He also directly asked Witzøe to contact Beltestad to confirm what prices Lerøy was offering. These conversations reflect these defendants’ understanding of the importance of pricing above NASDAQ prices and their open-book approach to dealing with one another to ensure pricing conformed to prices reported by the NASDAQ salmon index.”
Get dismissed
Peter Prieto of Podhurst Orseck, who serves as plaintiff’s co-counsel alongside Hausfeld LLP, told SalmonBusiness that he believes that Judge Altonaga’s order was “a solid victory because antitrust cases often get dismissed at this stage.”
The group of seafood companies includes Euclid Fish Company, Euro USA, Schneider’s Fish and Sea Food Corporation, Beacon Fisheries, Cape Florida Seafood, the Fishing Line and Hesh’s Seafood.
“Does not support an inference of conspiracy”
In response, the defendants said it was “entirely appropriate for trade associations to discuss such industry issues, and defendants’ participation in those discussions does not support an inference of conspiracy”.
The lawsuit also highlighted ongoing concurrent investigations of price-fixing in the salmon market by both the EC and DOJ.
On behalf of Gustav Witzøe, a SalMar spokesperson told SB that “as a result of the order, the class action claim will be argued before the US court”.
“Salmar is of the opinion that the class action claim is without merits, and will substantiate this in the court proceedings,” the salmon farmer added.
SB has contacted Lerøy’s Henning Beltestad for comment.
“Lerøy considers the class action lawsuit filed in the United States to be unfounded. We are confident that it will be clear when the case will be decided later,” said Krister Hoaas, head of communication at Lerøy.
“The decision that has now been made is only to allow the lawsuit to be filed. The decision is based on the plaintiffs’ allegations as made, without any evidence. We have no further comments on the case.”
