Additional reporting by Oriana Aguillon
Australis Seafoods has this week become the first Chilean salmon company to press charges against feed manufacturers after the government announced alleged price collusion in 2019.
The company, now owned by China’s Legend Holdings, has filed suits against all four feed manufacturers in Chile -- including Nutreco’s Skretting, Cargill’s EWOS Group, BioMar Group and SalmoFood, a company owned by Peru’s Vitapro. Cargill acted as a whistleblower in a government-led investigation into the alleged wrongdoing after it said it discovered price collusion upon buying feed company EWOS in 2015 from private equity funds.
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Australis became the first of several salmon producers in Chile to launch its own lawsuit against the feed companies following the announcement of an investigation by regulator Fiscalia Nacional Economica (FNE). The FNE’s investigation launched in late 2019 accused the feed manufacturers of fixing prices between 2013 and 2015, seeking $70 million in damages.
The Puerto Varas-based company hired law firm Gana y Galvez to press charges. "The evidence will be presented at an opportune moment, within the framework of this [lawsuit], or in the development of the legal process to establish the amount of losses incurred for the company," the firm's Jose Miguel Gana told Undercurrent News.
Skretting and BioMar have previously denied wrongdoing and said that they will fight the charges of the FNE, which acts as Chile’s attorney general. Skretting declined to comment "given that the case is still before the court", a company spokesperson said. BioMar and Cargill didn't respond to requests seeking comment. Salmofood has also denied wrongdoing and asked to be removed from the investigation as they were not part of the alleged collusion.
Cargill, as the only company that has admitted guilt in the price collusion case, has been reportedly reaching out-of-court settlements with customers in exchange for new contracts, an industry source told Undercurrent. It can do this as a whistleblower, unlike its competitors, and potentially win business with salmon farmers who are facing a lower price environment in 2020 due to COVID-19.
The price-fixing allegations have touched a nerve within the industry, as it also traversed some of the most painful years in the Chilean salmon farming industry. The industry suffered an almost total loss of salmon stocks in 2007 due to infectious salmon anemia, and suffered financial consequences for up to a decade after this.
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It is unclear at this stage when and how the other Chilean salmon farmers will follow in how to approach the price-fixing scandal. Legal processes such as the FNE’s investigation into price-fixing in the salmon industry can often take several years to be processed by Chilean courts and will often result in out-of-court settlements.
Chile uncovered a similar collusion case to fix the price of toilet paper back in 2015. The country’s supreme court took five years to determine charges against the accused companies.
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Australis files lawsuit against feed manufacturers for price collusion - Undercurrent News
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