Justice Dept. Asked to Block Tuna Merger

The proposed acquisition of San Diego tuna canner Bumble Bee Seafoods by Star-Kist has drawn letters of protest to the Justice Department from two San Diego-based trade associations representing 347 tuna fishermen.

In letters to the department’s antitrust division, which is now reviewing the acquisition, the American Tunaboat Assn. and the Western Fish Boat Owners Assn. said the action would concentrate too much of the tuna business under one corporate umbrella.

The action would give H. J. Heinz Co., which owns Star-Kist, 60% of the “white meat” or albacore tuna market and more than 50% of the light meat tuna market, a category that includes all other tuna varieties, ATA President August Felando said Wednesday. Annual U.S. sales of all kinds of tuna have been estimated by analysts to be $1.4 billion

“When one label has that much control, they are in a tremendous position to manipulate prices,” WFBOA General Manager William Perkins said.

Executives at Heinz headquarters in Pittsburgh were not available for comment late Wednesday. When it announced its plans to acquire Bumble Bee in February, Heinz said the merger would not result in “anti-competitive barriers” because tuna is “a worldwide commodity with low barriers to entry.”

Heinz, the Pittsburgh food products company whose Star-Kist and other labels currently control an estimated 40% of the U.S. market, did not disclose terms of the Bumble Bee Seafoods acquisition. Bumble Bee closed its San Diego cannery in 1982 and has since moved canning operations to Puerto Rico.

Requires Approval

The seller is a group of Bumble Bee executives and financial partner First Boston Corp., who acquired the company from Castle & Cook for $73-million in 1985.

Because of the size of the companies and their market, the merger requires government approval under provisions of the Hart Scott Rodino Act.

John Poole, an attorney in the antitrust division, declined to comment on the letters from the fishermen’s organizations or on his division’s investigation but said a decision on the acquisition will be rendered “very soon.”

Combined with the effects of the decline in the number of U.S. tuna canners, the merger would give Heinz significant control of the tuna market because of wide market identification of Bumble Bee and Star-Kist labels, Felando said. His group represents 35 tuna seiners.

The number of canners accepting fish in the continental United States has dwindled to one, the Pan Pacific cannery in San Pedro, Perkins said. All other U.S. canning has been moved to Puerto Rico and American Samoa where oceanfront land and labor are cheaper and where the anti-pollution laws are less stringent.

Perkins, whose WFBOA includes 312 “hook-and-line” fishermen who catch mostly albacore, said Heinz’s proposed control of 60% of the white meat tuna market would “give them a tremendous position of power.”