Australis salmon feed lawsuit: “We consider that it is our duty to intervene actively “

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Attorney Jose Miguel Gana, part of the law firm Gana y Galvez representing Australis, explains the outcomes of the case.

It was reported on Thursday that Australis Seafoods announced that it is pressing charges against Chilean salmon feed manufacturers after the government announced alleged price collusion in 2019.

In December last year, Chile’s competition regulator, the National Economic Prosecutor’s Office (FNE) accused four salmon feed producers of colluding with each other for 12 years to set the price of feed.

Setting prices
The companies accused of setting prices between 2003 and 2015 – were the Chilean divisions of Biomar Chile, Comercializadora Nutreco Chile, Ewos Chile Alimentos and Vitapro Chile (Salmofood). Though the agency requested an exemption for EWOS Group, a part of Cargill since 2015 because it acted as a whistleblower in the case.

Taking them to court is the Chilean salmon farm Australis Seafood (which was formally controlled by businessman Isidoro Quiroga). Australis was acquired by Chinese conglomerate Joyvio Group and its co-investor Silk Road Fund for USD 921 million in 2019, making it one the largest acquisitions in Chile’s aquaculture industry.

PHOTO: Australis Seafood

Talking to SalmonBusiness, lawyer Jose Miguel Gana unpacked the legal landscape that lay ahead.

Greatest severity
What does the company hope to achieve? How much was lost due to the alleged actions of those involved?

“The decision of Australis Mar (a subsidiary of Australis Seafood) was taken in so far as we understand that the facts affecting the industry in general and Australis, in particular, are of the greatest severity. Our representative is a company that for years has contractually linked with salmon food companies based on the confidence and understanding that the trading conditions that were applied were due and were the result of competition, without knowing the existence of a collusion that has been maintained for years,” he said.

“From this, and once the serious facts of the FNE Requirement were known, we consider that it is our duty to intervene actively and decisively for the sanctioning of these facts, which have even been recognised by one of the undertakings subject to the action of the FNE,” explained Gana.

Indemnities
How long is a case like this expected to last?

“This case should last a couple of years in the TDLC (Chile’s Tribunal for the Defense of Free Competition .ed), plus a year in the E. Supreme Court in the context of a possible appeal. After that, the indemnities would come,” he said.

BioMar told SalmonBusiness on Thursday that it did not have any comments at the moment as the case is following the legal process. A spokesperson for the Nutreco-owned Skretting Chile said it also could not comment on the Australis case but that it “plans to fight the charges brought forward by the FNE; Skretting will make every effort to demonstrate the allegations are incorrect.”

Chilean fish feed factory APSA. Photo: BioMar

“The FNE Requirement has already been answered by the required companies, which denied the facts and the existence of the alleged wrongdoing, except EWOS, which was the company that was reported, recognising collusion,” said Gana. “We are waiting for TDLC to receive the cause for proof.”

Compensation
Will there be any kind of compensation involved (if successful)?

Gana said that the amounts are still being defined, based on studies of an economic nature “with respect to the information that the company has as well as that that that could be generated in the course of the process.”

“The outcome of this infraction action may determine the application of a fine for tax benefit. However, once the existence of the collusion has been established by an enforceable judgment, those who had been harmed by the sanctioned acts could bring legal proceedings before the same Court of Defence for Free Competition (TDLC), in order to ensure that the damage which the collusion could have caused them, inter alia, for having paid for the products a price higher than that which had been paid in a competitive environment to be paid in the competitiveness of free competition, is reserved,” concluded Gana.