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Justice in the tuna industry

Chicken of the Sea and Bumble Bee merger would stifle competition

Two San Diego–based tuna companies, Bumble Bee Foods and Chicken of the Sea (which is owned by a Thailand firm, Thai Union Group), abandoned plans to merge after the Department of Justice said the merger could be anti-competitive.

The deal would have combined the second and third largest sellers of shelf-stable tuna in the United States, according to a Department of Justice news release from December 3.

The tuna market has long been dominated by three major brands. Starkist is the industry leader, with a 36 percent share of the market. Bumble Bee and Chicken of the Sea together account for 38 percent of the canned-tuna market, according to figures published last December, when the merger proposal was announced.

The Department of Justice, after a long study, concluded that the market is not functioning competitively now, and further consolidation would only make things worse.

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Two San Diego–based tuna companies, Bumble Bee Foods and Chicken of the Sea (which is owned by a Thailand firm, Thai Union Group), abandoned plans to merge after the Department of Justice said the merger could be anti-competitive.

The deal would have combined the second and third largest sellers of shelf-stable tuna in the United States, according to a Department of Justice news release from December 3.

The tuna market has long been dominated by three major brands. Starkist is the industry leader, with a 36 percent share of the market. Bumble Bee and Chicken of the Sea together account for 38 percent of the canned-tuna market, according to figures published last December, when the merger proposal was announced.

The Department of Justice, after a long study, concluded that the market is not functioning competitively now, and further consolidation would only make things worse.

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Comments
12

I worked in the tuna industry when it was a substantial industry in San Diego. I worked on the Top Wave, Constitution, United States, Pan Pacific and Santa Maria. I have fond memories of working on the tuna seiners docked at G Street in the 1970's. I was not a crew member, but ship support. I repaired and installed long-band, VHF, CB Radio and radar units. Climbing on top of the crows nest to install antennas, crawling in the bilge to run lines for sonar. I was an electronics technician but I became acquainted with many of the Italian and Portuguese fisherman who worked the three to four month voyages capturing and freezing the tuna.

The industry was destroyed by the dolphin and porpoise bycatch uproar. Even though the fisherman routinely save turtles, octopus, dolphin and other bycatch by riding around over the purse (nets) freeing the sea life and using "seal bombs" (waterproof firecrackers) to scare the dolphins out of the purse. Many fisherman were dismembered or lost their lives trying to save the dolphins and porpoise.

The industry moved to Ensenada, then to Samoa. It is now mostly run by Korean and other Asian countries. Under their stewardship, thousands of non-tuna bycatch are killed and discarded. We chased away a problem we tried to manage into the hands of foreign firms that have no care for the untargeted sea life. Super ships, or rather motherships, are floating canneries that have the tuna ships dock and unload their catch. The catch is then processed, cooked, canned and packaged before transfer ships take the finished product to shore warehouses.

The legacy of the tuna industry is the remaining offices of Starkist, Chicken of the Sea and Bumble Bee. All based in Southern California. The good fishing jobs that built the wealth of many local family dynasties are gone for good. The industry a ghost of its heyday.

I don't understand the Justice Department sometimes. Look at the mess they created with the Haggen debacle. They told Albertsons that they had to divest of stores. That invited "competition" that actually destroyed many neighborhood shopping destinations.

Now the Justice Department thinks that denying this merger will "save" the consumer money? No, it just means that the efficiencies from consolidation cannot be realized. Seriously, if tuna prices were to soar, people would simply not buy it. This is canned food, the byproduct of tuna canning is used in cat food. Is Spam a monopoly? Yes. If they raise their prices too much, most people will choose to eat something else. The same thing would happen with canned tuna.

The Justice Department is not doing the consumer any favors.

Dec. 6, 2015

They say that nine-tenths of the hell raised in the world is well-intentioned.

Dec. 7, 2015

Flapper: Whoever says that nine-tenths of the hell raised is well-intentioned is not from San Diego. Best, Don Bauder

Dec. 10, 2015

Check with the Kumeyaay.

Dec. 10, 2015

Flapper: Touche. Best, Don Bauder

Dec. 11, 2015

NPonzi. So much of San Diego business history is tied up in tuna. C. At holt Smith, one of the biggest crooks in local history, owned one of the top three tuna companies. The dolphin controversy named the local industry but I wonder if it would have moved to faraway waters in any case. Best, Don Bauder

Dec. 6, 2015

The name in the second sentence is C. Arnholt Smith. This was written a few days ago when I was forced to type with my fingers. You can see the results in several of my posts. Best, Don Bauder

Dec. 11, 2015

We used to call him C. A$$hole Smith.

Dec. 13, 2015

Flapper: But he (along with John Alessio) was named a Mr. San Diego and "Mr. San Diego of the Century" by a SD Union writer. Best, Don Bauder

Dec. 14, 2015

Those who hold high orfice bend low. And we called heim "Mr." A(llassio).

Especially a waitress who worked there who, when, back in the sixties or seventies, served (but, I take it, not serviced) a couple of his pals from Chicago. The check came to $900 (say, 1970 money); $300 for the meals and $600 for the wine. They tipped her with a $100 bill. She looked at the tip, wadded it up and threw it back onto the table, saying "Here, you cheap sonsabitches--you must need it more than I do!" I don't know what happened to her.

Dec. 14, 2015

As I remember it, the US only recognized a 3 or 10 mile limit, while other countries to the south of us recognize a more extensive border, was it 100 miles? The specifics I cannot remember. But I recall several ship wereboarded seized, or their cargo taken by the authorities.

Dec. 7, 2015

Wan it's. That I do not remember, but you may be right. Best, Don Bauder

Dec. 7, 2015

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