StarKist, Bumble Bee and Chicken of the Sea, the top three canned-tuna brands in the U.S., are foreign-owned, but only StarKist’s tuna qualifies for the school-lunch program. Its rivals are fighting to change that.

Tuna Firms Jostle for Uncle Sam’s Recognition

Bumble Bee, Chicken of the Sea Press for Easing of School-Lunch Program Rules


Feb. 17, 2014 7:58 p.m. ET

The top three canned-tuna brands in the U.S. are foreign-owned, but that doesn’t stop them from bickering about which is the most American.


At stake is their eligibility to sell tuna to the U.S. Agriculture Department for school lunches and other food programs. For now, only StarKist Co. qualifies because of a rule that any seafood the department buys must be 100% U.S.-produced. Bumble Bee Foods LLC and Chicken of the Sea International want the rules relaxed so they can sell to Uncle Sam too.

Their campaign has set off an ugly round of industry infighting over allegations of child labor in Thailand and the plight of a California tuna-canning worker who died in a Bumble Bee oven 16 months ago.

StarKist cleans and cans tuna in the U.S. territory of American Samoa. Last year it drove home that point by introducing a label depicting Charlie the Tuna backed by an American flag. Chicken of the Sea and Bumble Bee rely on plants in Thailand and elsewhere for labor-intensive cleaning, then ship their tuna to the U.S. for canning.

Bumble Bee and Chicken of the Sea want Washington to credit them for the canning jobs at their U.S. plants, where wages are higher than those StarKist pays in American Samoa.

“We’re as American as any other major seafood company,” says David Roszmann, chief operating officer of Chicken of the Sea International, which is owned by Thai Union Frozen Products TUF.TH -0.38% PCL of Thailand.

At the urging of Chicken of the Sea and Bumble Bee, Congress last month directed the Agriculture Department to re-examine its tuna-procurement rules.

U.S. retail sales of canned tuna totaled about $1.7 billion in 2013, up 1% from the previous year, according to IRI, a Chicago-based market-research firm. StarKist had about 36% of the market, followed by Bumble Bee, with 25%, and Chicken of the Sea, with 13%.

In recent years the Agriculture Department has spent as much as $15 million to $20 million on tuna, but it hasn’t purchased any in the past two years. That is because StarKist received a warning letter from the U.S. Food and Drug Administration in March 2011 that cited “unsanitary” conditions at the company’s American Samoa plant and ordered corrective actions.

Since then, school-lunch programs have had to do without tuna.

StarKist, owned by Dongwon Enterprise Co. of South Korea, says it has resolved those problems, and the department is reviewing StarKist’s status as a school-lunch supplier. StarKist spokeswoman Michelle Faist says the company opposes any relaxation of the rule requiring 100% U.S. content.

StarKist’s rivals say the rule is unfair. They note that most workers at StarKist’s American Samoa plant are citizens of Samoa, the territory’s neighbor, which isn’t part of the U.S. StarKist says those workers have valid work permits.

StarKist’s rivals also argue that minimum wages in American Samoa are far lower than those that Bumble Bee and Chicken of the Sea pay workers at their U.S. canning plants, which pack tuna that has been deboned and processed abroad. StarKist says it has nearly 2,000 workers in American Samoa, who earn $4.76 to $10 an hour.

Chicken of the Sea says wages at its Lyons, Ga., canning plant average about $12 an hour. Bumble Bee Foods, which has been owned by London-based private-equity firm Lion Capital LLP since 2010, says the 230 workers at its Santa Fe Springs, Calif., packing plant earn an average of $18 an hour.

Chris Lischewski, chief executive of Bumble Bee, says his company could qualify for the U.S. government purchases if the percentage of U.S. content by value was lowered to 85%. For now, he says, “you only have one company that can meet the criterion. That’s a monopoly.”

Eni Faleomavaega, a nonvoting delegate who represents American Samoa in Congress, opposes any easing of the 100% rule. He said in a recent letter to the American Samoa government that the tuna industry accounts for four out of five private-sector jobs in the territory.

Mr. Faleomavaega criticized Bumble Bee and Chicken of the Sea for cleaning their tuna in “low-wage countries like Thailand,” where child-labor abuses have been found. Finnwatch, a nonprofit research organization in Helsinki that seeks to improve worker protections, reported last year that some Thai tuna plants employed teenagers from Myanmar.

Finnwatch researcher Sonja Vartiala says the problem stemmed partly from the availability of forged passports.

Bumble Bee says it insists that its tuna-processing partners follow international standards for working conditions. The company added that it was “sickened by the politically charged accusations” against it.

Chicken of the Sea says it complies “with every aspect of Thai labor law.”

In his letter, Mr. Faleomavaega also pointed to an accident in which a worker was “cooked to death” at Bumble Bee’s canning plant in California. The worker died in October 2012 after becoming trapped inside an industrial pressure cooker.

A Bumble Bee spokeswoman acknowledged the death, but said safety is “a top priority for our company.”

Even if the made-in-the-U.S.A. rule stands, StarKist likely will face competition soon. Tri Marine Group, a closely held company based in Bellevue, Wash., says it will begin canning tuna at a refurbished plant in American Samoa by the end of this year.



About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (, the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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