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Major U.S. frozen potato producers decided to join together to collectively conspire with the industry based on a coordination of price increases in 2021. That case went to trial this week with several class action lawsuits against Cavendish Farms, Lamb Weston, McCain Foods and J.R. Simplot Company.
In the lawsuit, Pennsylvania-based supermarket chain Redner’s Markets alleges that the four companies illegally fixed the prices of potato chips, French fries and potato crisps, gouging customers. They all engaged in a series of antitrust practices by using data aggregation services and sharing access to sensitive information with which to artificially fix prices. Between 2022 and 2024, prices for frozen potato products increased by 47%, according to one of the lawsuits.
The potato cartel raised prices in a synchronized manner, while consumer concerns continued to grow. Indeed, world potato prices have reached their highest level in 18 months, with the UN Food and Agriculture Organization’s food price index rising to 127.4 in October, up 5.5% from a year ago.
In this regard, the defendant companies managed to dominate the market, accounting for about 97% of a U.S. frozen potato industry valued at $68 billion annually, according to a plaintiff.
How Big Potato took over the market
According to the lawsuit, French fry producers maintained close relationships with farmers and insisted that suppliers not accept new customers. However, the consequences of the alleged price fixing could have serious repercussions for the French fry giants, as was recently the case with the McDonald’s complaint. Last month, the chain sued beef producers, alleging that four large meatpackers inflated prices by decreasing supply and arguing that the beef industry had become a monopoly.