A Portland restaurant is suing a consortium of Atlantic salmon producers, alleging that the companies, most of them based overseas, engaged in price-fixing.
The lawsuit by Portland Hunt + Alpine Club alleges that salmon prices have risen over the last four years when they should have been falling. According to the filing in federal court in Maine, the costs associated with raising Atlantic salmon have been mostly stable since 2015, production has increased and the market has shrunk because Russia banned salmon imports in retaliation for the U.S. and some European countries imposing economic sanctions following Russia’s 2014 annexation of the Crimea.
The lawsuit says the lawyers will pursue class action status, which would allow the suit to include hundreds or even thousands of other plaintiffs and can increase the amount of damages that could be recovered if the suit prevails. If that’s the case, Portland Hunt + Alpine Club may become the lead plaintiff, which puts it on the inside track to recover a larger amount of any damages that might be awarded, and also in position to make some decisions in the case, such as whether to approve a settlement.
Because the lawsuit alleges violations of anti-trust laws, some damages could be tripled by the court. It doesn’t specify the amount of damages being sought.
The Portland restaurant became the plaintiff in the lawsuit because of a “pre-existing relationship” with the Blaine Finley law firm in Washington, D.C., said Daniel Cohen, a lawyer with the firm. Andrew Volk, the owner of the Portland Hunt + Alpine Club, also said there was a previous relationship with the firm, but declined to comment further.
The defendants are primarily Norwegian firms, although Mowi Ducktrap, a Belfast, Maine, company, is also named. The company, known for its smoked salmon, is owned by a Norwegian company.
The court filing doesn’t yet list lawyers for the defendants. A message left with the head of Ducktrap was not returned Wednesday.
Ducktrap, which has been smoking fish for more than 40 years, went through a major expansion last year. The company has been capitalizing on Americans’ increasing appetite for smoked fish.
A similar lawsuit filed in May on behalf of a Falconer, New York, restaurant, Prime Steakhouse, is working its way through federal court in Maine. The suit, which names many of the same defendants and alleges the same price-fixing, was filed in May. Blaine Finley also filed that action, which likewise seeks to be made a class action suit.
Both suits say that the Norwegian seafood firms and a Scottish company are under investigation by the European Commission for similar allegations. The suit said the EC is investigating complaints that the companies have agreements to limit competition and that the offices of some of the companies were raided in February by investigators looking for documentation.
The U.S. is the second-largest market for salmon, according to the suit, behind only the European Union.
The suit said that the salmon market is easily manipulated because of the concentration of producers. The allegations are that the Norwegian producers drive up prices on the spot market in Oslo, Norway, by using subsidiaries to buy up supplies when prices start to fall.
Although only a tiny percentage of salmon is sold in the Norway market, the suit said, prices there are used as the basis for longer-term contracts.
“There is no good non-collusive reason for why the “big players” – the Norwegian Defendants here – would need to make limited salmon spot market purchases except to drive up the prices on that market,” the suit said. “Each of them is an integrated farmed salmon producer. They simply do not need to buy more fish.”
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