Potato Price-Fixing Lawsuits: Processors Accused of Inflating Prices

Case Overview: Several major potato processors are facing class action lawsuits alleging they conspired to fix prices for frozen potato products, harming both grocery stores and consumers.

Consumers Affected: Grocery stores and consumers who purchased frozen potato products.

Court: U.S. District Court for the Northern District of Illinois, Eastern Division

Four of the largest potato processors in the United States – Lamb Weston, McCain Foods, J.R. Simplot, and Cavendish Farms – are facing class action lawsuits accusing them of conspiring to fix prices for frozen potato products. 

The lawsuits, filed in federal court in Chicago, allege that the companies illegally coordinated to inflate prices for products such as French fries, hash browns, and tater tots, harming both grocery stores and consumers.

One of the lawsuits was filed by Redner's Markets, a Pennsylvania grocery chain, and the other is a proposed consumer class action led by Alexander Gevoa, a Virginia resident. Both lawsuits claim that the four companies, which collectively dominate the $68 billion annual market for frozen potato products, engaged in anti-competitive practices that violated U.S. antitrust law.

Potato Processors Accused of Price-Fixing

The lawsuits allege that the companies conspired to fix prices for frozen potato products. This alleged conspiracy involved sharing competitively sensitive commercial data with a third-party industry group. 

This data sharing, the lawsuits contend, allowed the companies to monitor each other's pricing strategies and coordinate price increases, thereby reducing competition and artificially inflating prices.

It is also alleged that the companies used trade industry conferences to unlawfully coordinate pricing strategies and maintain artificially high prices for their products. 

Redner's Markets, for example, alleges that the price of frozen potato products increased by 47% from July 2022 to July 2024, even though input costs declined during that period. This price increase, the grocery chain argues, is evidence of the companies' coordinated efforts to manipulate prices.

McCain Foods Denies Price-Fixing Allegations

McCain Foods, one of the companies named in the lawsuits, has denied the allegations, stating that it "strongly disputes any allegation that the company violated antitrust laws, or any other laws, with respect to the sale of frozen potato products." The company intends to "vigorously defend" against the lawsuits, Reuters reports.

This case against the potato processors is not the only recent example of alleged price-fixing in the food industry. In July 2024, StarKist Co. reached a $1 billion settlement with tuna buyers who accused the company of manipulating prices in a class action lawsuit.

This antitrust lawsuit stemmed from a 2015 Department of Justice (DOJ) investigation that uncovered a price-fixing conspiracy within the U.S. canned tuna industry. Investigators found that StarKist, along with its competitor Bumble Bee Foods, had colluded to fix prices for canned tuna from late 2011 to late 2013. Both companies subsequently admitted guilt in 2018.

The potato price-fixing lawsuits seek unspecified monetary damages and a court order prohibiting the companies from engaging in further price-fixing activities.

Do you buy frozen potato products? What are your thoughts on this lawsuit? Share your opinion in the comments below.