‘Potato cartel’ mashed competition to raise french fry prices, lawsuits say

Have your french fries become more expensive? A “potato cartel” of leading food producers is to blame, five new federal lawsuits contend.

Cavendish Farms, Lamb Weston, McCain Foods and the J.R. Simplot Company, the four leading producers and sellers in the United States of frozen potato products like french fries, hash browns and Tater Tots, conspired to artificially fix the prices of their spuds by sharing trade information and coordinating price raises beginning in 2021, according to the antitrust lawsuits filed in the U.S. District Court for the Northern District of Illinois within the past week.

The alleged tater plot by the four producers, which control over 95 percent of the market for frozen potato products, led prices for those products to increase by 47 percent between July 2022 and 2024, the lawsuits say.

McCain Foods denied that it had engaged in anticompetitive activity.

“McCain Foods strongly disputes any allegation that the company violated antitrust laws, or any other laws, with respect to the sale of frozen potato products,” Charlie Angelakos, McCain Foods vice president of global external affairs and sustainability, said in a statement to The Washington Post. “McCain Foods intends to vigorously defend the recently filed lawsuits so that it can focus on what we do best: delivering high quality, affordable food to customers nationwide.”

Cavendish Farms, Lamb Weston, and Simplot did not immediately respond to requests for comment Wednesday evening.

The allegations come after an election season dominated by concerns about the cost of living and as researchers and federal agencies have scrutinized the consolidation of top food producers, which experts say has driven up prices across American grocery aisles.

“When there are only a handful of players in the market, collusion is too appetizing for these companies to pass up,” Lindsay Owens, executive director of D.C.-based economic think tank Groundwork Collaborative, said in a statement to The Post. “Price fixers must be held accountable but we must also work to make food markets more competitive.”

The lawsuits allege that illegal price-fixing from Canada-based firms McCain Foods and Cavendish Farms, along with Lamb Weston and Simplot, both headquartered in Idaho, took place in a frozen potato market ripe for manipulation.

Demand for potatoes, the country’s largest vegetable crop, has only grown in the past decade, according to the lawsuits. The demand for them is inelastic; there are few substitutes for grocers and restaurants looking to sate the country’s appetite for fries and tots. The market is dominated by just four producers. Frozen potatoes are largely interchangeable products, which should lead competitors to differentiate themselves through pricing, the lawsuits state.

Despite this, McCain, Cavendish, Lamb Weston and Simplot moved in lockstep in announcing near-concurrent and near-identical price raises several times in 2021 and 2022, according to the lawsuits. At times, the competitors announced price raises within days of each other, with the same effective date, the lawsuits state.

Consumers noticed. One lawsuit cites an April 2022 social media post by a Washington D.C. bar that accused its suppliers of colluding and compiled a list of near-identical pricing increases from McCain, Cavendish, Lamb Weston and Simplot that began that month.

Several lawsuits also cite comments from executives at the four companies appearing to acknowledge efforts to collaborate and fix prices. The lawsuits do not specify whether the comments were public and how they were obtained, but some of the same comments appear in multiple lawsuits.

A former McCain Foods director allegedly said in 2023 that they wanted to compete with Lamb Weston on pricing but were told not to by “higher ups in the room.” That year, a former Lamb Weston executive allegedly said of the company’s competitors: “they are behaving themselves.”

That executive added that they had “never seen margins this high in the history of the potato industry,” the lawsuits allege. Lamb Weston said in October 2023 that its net income had increased 111 percent over the previous year, which its CEO attributed in part to “pricing actions.”

Two of the lawsuits also name the National Potato Promotion Board, a trade association, and market research firm Circana as defendants. The lawsuits claim the two entities facilitated the alleged price-fixing by allowing the competitors to exchange data on spud pricing strategies. The National Potato Promotion Board did not immediately respond to a request for comment Wednesday evening. Shelley Hughes, a Circana spokesperson, said Circana “strongly disputes any allegation that the company violated antitrust laws.”

Studies carried out after the disruption of the covid-19 pandemic have drawn attention to increasing consolidation among both grocery retailers and producers, which often drive up food prices. Consumers of other foods have also cried foul. McDonalds in October sued the country’s top meat packers, alleging a price-fixing scheme for beef. Sugar makers faced similar accusations in a series of antitrust lawsuits brought by bakeries and restaurants in March.