A “potato cartel” would have fixed the prices of frozen fries

Four giants and competitors in the food industry, including two Atlantic Canadian companies, are accused in the United States of conspiring to artificially increase the price of frozen potatoes.

Cavendish Farms, McCain Foods, Lamb Weston and J.R. Simplot are targeted by two class action requests filed in recent days.

These companies are accused of having privately exchanged their information, in order to artificially raise the price of frozen potatoes that they sell to consumers, such as frozen fries, diced hash browns, hash browns for breakfast. or potato bites commonly known as tater tots.

This supposed potato posteraccording to the complainants, would have thus proceeded to almost simultaneous and corresponding price increases in 2021 and 2022.

A price-fixing scheme from 2021

Two class action claims have been filed in federal court in Illinois, the first filed on November 15 by Redner’s Marketsa supermarket chain headquartered in Pennsylvania.

Redner’s accuse McCain, Cavendish, Lamb Weston et Simplot of conspiring to fix the prices of frozen potato products above competitive levels since at least the beginning of 2021, violating US antitrust law.

Court documents allege that Lamb Weston would have asked its managers to exchange information on its competitors’ prices by text message only, and never by email, so as not to leave traces which could be discovered if there was an antimonopoly investigation.

A second class action request followed on November 17, on behalf ofAlexander Gevoaa consumer who resides in Virginia.

It aims lThe four agri-food giants, the American market research company Circana and the National Potato Promotion Council (National Potato Promotion Boardcommonly called Potatoes USA).

The complainant accuses the agri-food companies of having used a data aggregation service to exchange information with the aim of manipulate and coordinate prices.

McCain Foods has one of its head offices in Florenceville-Bristol, New Brunswick, where the company was founded in 1957. Cavendish Foods belongs to Irvinghas its head office in Dieppe and is very present in Prince Edward Island.

Simplot et Lamb Weston are based in Idahothe leading potato-producing state in the United States.

These four companies control 98% of a frozen potato market valued at $68 billion a year in the United States, according to the suit.

The allegations have not yet been examined in court. Both class actions must be authorized to proceed further. None of the four targeted companies has submitted a defense so far. They all declined an interview request.

In Canada, the bread cartel

Companies that compete must decide separately the price at which they sell a product to consumers, for example at the grocery store.

When companies coordinate and collude with each other to establish the price, this is called illegal price fixing. According to the Canadian Competition Bureau, a poster (New window) is formed when at least two parties agree not to compete with each other.

In Canada, the competition bureau has determined that a bread cartel artificially inflated the price of bread and its derivatives by at least $1.50 between 2001 and 2017.

This bread cartel allegedly allowed the companies that participated in it to illegally pocket $5 billion.

Loblaw and its parent company, George Weston Limitedadmitted their participation in this scheme. They have offered to pay $500 million to settle the class action against them, which would be the largest antitrust settlement in Canadian history, according to the plaintiffs’ lawyers.

With information from ReutersThe Canadian Press and Rhianna Schmunk (CBC)