Alleged ‘potato cartel’ accused of conspiring to raise price of frozen fries, tater tots across U.S.
Potato Price-Fixing Scandal Rocks the United States
In a shocking turn of events, four major potato companies in the United States are facing allegations of colluding to inflate the prices of frozen potato products. McCain Foods, Cavendish Farms, Lamb Weston, and J.R. Simplot have been accused of sharing confidential information with each other in a bid to drive up prices and maximize profits at the expense of consumers.
The lawsuits, filed in U.S. District Court, claim that these companies have been engaging in a coordinated effort to fix prices above competitive levels, in violation of antitrust laws. The plaintiffs allege that the so-called “potato cartel” has been making matching or simultaneous price increases since early 2021, effectively keeping prices high across the board.
One lawsuit, filed by a Pennsylvania-based supermarket chain, alleges that the companies made coordinated price increases in 2021 and 2022. The suit also claims that a restaurant owner in Washington, D.C., noticed the suspicious timing of these price hikes and raised concerns online.
The lawsuits further allege that Lamb Weston instructed managers to communicate about competitors’ pricing only through text messages to avoid leaving a paper trail that could be discovered in case of an antitrust investigation. Additionally, the companies are said to have used a data aggregation service and a trade association, Potatoes USA, to exchange information and manipulate prices.
If certified as class actions, the lawsuits would include consumers who purchased frozen potato products from these companies after January 1, 2021. With the potato sector contributing over $100 billion to the U.S. economy in 2021, the impact of these alleged price-fixing schemes could be significant.
These allegations come on the heels of a similar scandal in Canada, where Canada Bread was fined $50 million for its involvement in a price-fixing scheme for packaged bread. The parent company, Loblaw, agreed to a $500 million settlement to resolve a class action lawsuit related to the scandal.
As the legal battle unfolds, it remains to be seen how these allegations will impact the potato industry in the United States. With the future of these companies hanging in the balance, consumers are left wondering how the price of their favorite frozen potato products will be affected.
