Salmon industry caught up in tidal wave of legal issues

The salmon industry is in murky water as it awaits a decision from the European Commission (“EC”) on whether producers of farmed Atlantic salmon have engaged in unlawful cartel activity in breach of the prohibition on anti-competitive agreements under Article 101 of the Treaty on the Functioning of the European Union (“TFEU”).  Expectant of an infringement decision from the EC later this year, two actions for damages have already been filed in the UK against certain salmon producers by major UK supermarkets and on behalf of retail consumers.  Unrelated, but at the same time, false green (“greenwashing”) claims related to the marketing of Scottish and Norwegian salmon by UK supermarkets keep on coming.

In this briefing, we summarise the salmon producers cartel litigation in the UK and the greenwashing claims, and highlight how they serve as an important and timely reminder for businesses in the food and agribusiness sectors and beyond, to ensure compliance with competition law and the CMA’s Green Claims Code, as the CMA’s enforcement powers will be strengthened from October this year with the coming into force of the Digital Markets, Competition and Consumers (“DMCC”) Act 2024.

The salmon producers’ cartel litigation

In the UK, several producers of farmed Atlantic salmon are currently facing two separate damages claims, from supermarkets and from retail consumers, in respect of alleged cartel activity in breach of UK and EU competition law.  

First, on 5 March 2024, the Competition Appeal Tribunal (“CAT”) published notice of a claim for damages brought by 10 major UK supermarkets against 13 producers of farmed Atlantic salmon.  It is alleged that, at least from 2011 until 20 February 2019, the salmon producers exchanged commercially sensitive information and manipulated prices on the Norwegian spot market (which provided the international benchmark reference price for the pricing of farmed Atlantic salmon globally).  The supermarkets estimate total losses of £675m across the farmed salmon market and secondary processed product markets (e.g., smoked, frozen and ready-to-eat salmon products).    

Then, on 19 July 2024, the CAT published notice of an application by Waterside Class Limited to commence collective proceedings on behalf of retail consumers against 6 producers of farmed Atlantic salmon.  It is alleged that, between at least April 2013 and February 2019, the salmon producers unlawfully colluded to increase Atlantic Salmon prices, in particular by manipulating the reference prices for Norwegian Atlantic Salmon on the NASDAQ Salmon Index, and through the unlawful exchange of commercially sensitive information regarding the prices and volumes of sales of Atlantic Salmon.  This is alleged to have increased the price paid for salmon products by the proposed class members, which include consumers who bought certain salmon products in retail settings in the UK between 1 October 2015 and 31 May 2019 (approximately 35,665,000 to 44,241,000 persons).  The average recovery by each member is anticipated to be low, at approximately £1.97 to £10.71. 

Both of these claims rely on the EC finding that there has been a breach of competition law.  Following a series of dawn raids, in January 2024, the EC issued a Statement of Objections which outlines its preliminary view that Cermaq, Grieg Seafood, Bremnes, Lerøy, Mowi and lMar may have breached Article 101 of the TFEU, by colluding to distort competition in the market for spot sales of Norwegian farmed Atlantic salmon in the EU between 2011 and 2019.  The EC’s final decision is expected later this year. 

“Greenwashing” claims

In April 2024, $camon $cotland filed a complaint with the CMA about “greenwashing” claims (i.e., unsubstantiated or misleading environmental claims about products or business practices) with respect to the allegedly deceptive marketing of “responsibly farmed” Scottish and Norwegian salmon by supermarkets.  This is one of a number of complaints which have been filed with the CMA about the use of the words “responsibly farmed / sourced” and “sustainable” by the Scottish salmon farming industry since the CMA’s Green Claims Code (which contains key points for businesses to check that their environmental claims are genuinely green) was published in 2021.  “Greenwashing” claims are also being targeted by the Advertising Standards Authority and the Financial Conduct Authority, which can refer potential breaches of the Code to the CMA for further investigation and enforcement.

Under the DMCC Act, which is due to come into force in October 2024, the CMA will have stronger consumer law enforcement tools, including the power to impose directions and / or fines itself, without the current requirement to apply to the courts to impose sanctions for a breach of the Green Claims Code and other consumer protection laws.

Key takeaways

The cartel litigation claims demonstrate the ongoing potential for the consequences for a breach of competition law to be felt across multiple jurisdictions – the EC is expected to impose fines on the producers once it reaches its final decision, and the damages claims in the UK may be just the tip of the iceberg.

The various claims against the salmon industry also serve as an important reminder for businesses in all sectors, including the food and agribusiness sectors, to ensure that they have the appropriate policies and procedures in place to comply (and demonstrate compliance) across the board, with all aspects of CMA enforcement, including both competition law and the Green Claims Code. 

This reminder is also timely given that, from October 2024, when the DMCC Act is expected to come into force, the CMA will have stronger enforcement powers and it is widely anticipated that the CMA will be ready to exercise them.