Frozen potato producers are the target of multiple new federal lawsuits that allege the companies are fixing prices through third-party data providers to form a “potato cartel.”
Companies such as Cavendish Farms, McCain Foods, JRS, and Lamb Weston, along with the National Potato Promotion Board, conspired to “cultivate, stabilize, and restore” the potato. [or] To do otherwise would amount to price manipulation in the U.S. frozen potato market,” according to one of the lawsuits filed in the U.S. District Court for the Northern District of Illinois.
The four largest potato processing companies effectively formed a cartel and violated U.S. antitrust laws by having “similar access to each other's data regarding prices and other sensitive information, and the ability to communicate directly with each other.” The lawsuit filed Sunday alleges:
This allows them to[move] “Prices have been rising in tandem,” the complaint states.
Price coordination between ostensible competitors was made possible through mutual and exclusive participation in market data aggregator PotatoTrac/NPD, a product of market research company Circana, which is also named in one of the lawsuits.
A separate lawsuit filed Friday by the supermarket chain Redner's states: “Each Defendant uses its own commercial data knowing that the only other commercial industry participants are major competitors in its frozen potato products. “We are happy to share this information with PotatoTrac/NPD.”
A spokesperson for McCain Foods strongly denied any wrongdoing on the part of the company.
In a statement provided to The Hill, McCain Foods Vice President Charlie Angelakos said, “McCain Foods is responding to allegations that the company violated antitrust and other laws with respect to the sale of frozen potato products. strongly disagrees.”
The company “intends to vigorously defend the recently filed lawsuit,” Angelakos said.
A spokesperson for Sarkana said: “The company strongly disputes allegations that it violated antitrust laws.”
The National Potato Promotion Committee did not respond to requests for comment.
In recent months, third-party commercial pricing algorithms have been cited in other areas of the economy as facilitating anti-competitive practices.
In August, the Department of Justice filed an antitrust complaint against RealPage, a real estate price data aggregator, for sharing proprietary information similar to that practiced by Circana.
The company “contracts with competing landlords who agree to share with RealPage non-public, competitively sensitive information about apartment rents and other rental terms in order to train and run RealPage's algorithmic pricing software.” ”, the complaint says.
“The software generates recommendations to participating landlords, including apartment rental prices and other terms, based on competitively sensitive information about them and their rivals.”
While the Biden administration has been relatively proactive on antitrust issues as the economy experiences post-pandemic inflation, many companies expect a more relaxed regulatory environment under the second Trump administration. .
