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Antitrust Suits Target Top Frozen Potato Companies for Alleged Collusion

By  |  November 24, 2024

A series of antitrust lawsuits have been filed against four of the largest producers of frozen potato products in the United States, accusing them of colluding to fix prices. The cases, recently submitted to an Illinois federal court, target Lamb Weston, J.R. Simplot, McCain Foods, and Cavendish Farms, which collectively dominate over 95% of the market for products such as french fries and hash browns.

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    According to The Washington Post, the lawsuits also name Circana, a market research firm, and the National Potato Promotion Board in some of the filings.

    The complaints allege that the companies coordinated price hikes over several years despite the competitive nature of the potato market. Frozen potato products are largely interchangeable, meaning market dynamics should encourage price competition. However, prices for these products surged by 47% between the summer of 2022 and 2024, according to the filings.

    The lawsuits claim that starting in 2021, the companies engaged in improper exchanges of trade information and orchestrated price increases. Evidence cited includes alleged statements from executives, with one reportedly noting that competitors were “behaving themselves,” suggesting implicit coordination. Additionally, anecdotal consumer reports pointed to a noticeable uptick in prices.

    Potatoes, the largest vegetable crop in the U.S., are an essential component of the American diet, with frozen potato products enjoying sustained demand as a popular side dish. This robust demand, coupled with the industry’s consolidation, has made the sector particularly susceptible to potential price manipulation, analysts noted.

    In response to the lawsuits, McCain Foods, headquartered in Canada, rejected the allegations. A company spokesperson told The Washington Post that McCain “strongly disputes” claims of wrongdoing and intends to defend itself vigorously.

    These legal challenges highlight growing concerns over corporate consolidation in the food industry and its impact on consumers.

    Source: The Washington Post