Alleged 'potato cartel' accused of conspiring to raise price of frozen fries, tater tots across U.S.
Canadian companies named in lawsuits claiming shoppers have been overcharged
Major Potato Companies in Legal Battle Over Price-Fixing Allegations
Four leading companies in the U.S. frozen potato products market are facing accusations of conspiring to inflate prices by sharing sensitive information. This alleged scheme involves McCain Foods, Cavendish Farms, Lamb Weston, and J.R. Simplot, who are said to have collaborated to manipulate the cost of frozen goods like fries, hash browns, and tater tots.
Two lawsuits, filed as proposed class actions in U.S. District Court, claim these companies exchanged pricing data to raise costs for consumers. One of the lawsuits described this as a "potato cartel" using shared information and direct communication to synchronize price hikes.
Allegations of Price-Fixing
According to the lawsuits, the companies have allegedly engaged in price-fixing since early 2021, violating antitrust laws. A Pennsylvania-based supermarket chain claims the four companies coordinated "matching, simultaneous or near-simultaneous price increases" in 2021 and 2022. A social media post by a Washington, D.C., restaurant owner also highlighted this pattern, noting the near-identical price increases among suppliers.
The lawsuits allege that the companies leveraged a trade association, Potatoes USA, and a data aggregation service to exchange sensitive information, enabling them to align pricing strategies. Managers at Lamb Weston were reportedly advised to use text messages instead of emails to discuss competitor pricing to avoid creating a discoverable email trail.
Broader Implications
Together, the four companies control 98% of the U.S. frozen potato products market, giving them significant influence over prices. If certified, one lawsuit could include consumers who purchased these products after January 2021, while the other may represent entities affected during the same period.
This case draws parallels to other notable price-fixing scandals, including a $50 million fine levied against Canada Bread for manipulating bread prices over 14 years. The frozen potato industry in the U.S. contributed over $100 billion to the economy in 2021, underscoring the potential impact of these allegations.
Next Steps
The lawsuits are in preliminary stages, and the claims have not been proven in court. None of the companies have responded to the allegations or filed formal defenses. If the lawsuits proceed, they could reshape how pricing strategies are managed in the frozen foods industry.
