Do you have a sneaking suspicion that food manufacturers are price gouging? Sure, inflation and labor shortages contributed to higher prices at the grocery store, but — surprise! — prices don’t seem to have come down from their peak.
A new pair of lawsuits filed last week take aim at price gouging in one section of the freezer aisle: potatoes. They claim that manufacturers of frozen potato products are price fixing, and have been for years now. Here’s what we know about the lawsuits.
What Are These Lawsuits All About?
There are two very similar lawsuits against the four main manufacturers of frozen french fries, tater tots, and hash browns in the U.S. claiming that they colluded with each other to fix prices and rip off customers. You’ll probably recognize some of the companies: Lamb Weston, McCain Foods, J.R. Simplot, and Cavendish Farms. In one of the suits, Potatoes USA, the national potato marketing board, is also being sued.
Together, those companies control 97% of the frozen potato market, and if they did collude to fix prices, that would be an antitrust violation. One lawsuit states that the companies “have never seen margins this high in the history of the potato industry,” and that’s because they’re price fixing.
Who Filed the Lawsuits?
One lawsuit was filed by Redner’s Markets, a chain of employee-owned regional grocery stores in Pennsylvania, Maryland, and Delaware. The other was filed by an individual on behalf of himself and everyone else who might have been wronged by the supposed price fixing.
What Do the Lawsuits Allege?
According to the lawsuits, the potato manufacturers used industry tradeshows and a marketing group that provided industry data to coordinate on pricing illegally. The information the potato manufacturers got dissuaded them from competing with each other, bringing up the price of frozen potato products across the industry.
One lawsuit even went so far as to claim that Lamb Weston instructed its managers to communicate about competitors’ pricing via text and not email so it wouldn’t be discovered in an antitrust lawsuit.
How Much Have Frozen Potato Prices Risen?
Frozen potato products have increased in price 47% from July 2022 to July 2024, claimed one lawsuit. “In 2021 and again in the spring of 2022, while facing increased input costs, defendants changed their pricing methods to collectively impose ‘strong arm’ price hikes with no worry their customers could defect to competitors,” it says.
Will There Be a Class-Action Lawsuit?
One of the suits is a class-action lawsuit. So if a judge decides that the claims are valid and antitrust violations occurred, anyone who purchased frozen potatoes from those companies could potentially get some money back in a settlement.
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