Frozen potato producers are the target of multiple new federal lawsuits alleging that companies have been coordinating their prices through third-party data providers to form a “potato cartel.”
Companies including Cavendish Farms, McCain Foods, JRS, and Lamb Weston, as well as the National Potato Promotion Board, conspired “to raise, stabilize, fix [or] otherwise manipulate the prices in the market for the frozen potatoes in the United States,” according to one of the lawsuits filed in U.S. District Court in the Northern District of Illinois.
The four large potato processors had effectively formed a cartel, thereby breaking U.S. antitrust law, by having “the same access to each other’s data on pricing and other sensitive information, as well as with a direct line of communication to each other,” the class action lawsuit filed Sunday alleges.
This allowed them to “[move] prices skyward in lockstep,” the suit says.
Price coordination between the ostensible competitors was enabled by mutual and exclusive participation in the market data aggregator PotatoTrac/NPD, a product made by market research firm Circana, which is also named in one of the suits.
“Each of the defendants willingly share their commercial data and information with PotatoTrac/NPD, knowing that the only other commercial industry participants are their major Frozen Potato Products competitors,” a different suit filed by supermarket chain Redner’s on Friday states.
A McCain Foods spokesperson vigorously denied any wrongdoing on the part of the company.
“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,” McCain Foods vice president Charlie Angelakos said in a statement provided to The Hill.
The company “intends to vigorously defend the recently filed lawsuits,” Angelakos said.
“Circana strongly disputes any allegation that the company violated antitrust laws,” said a Circana spokesperson.
The National Potato Promotion Board did not immediately return requests for comment.
Third-party commercial pricing algorithms have been called out in other sectors of the economy as a facilitator of anticompetitive practices in recent months.
The Department of Justice filed an antitrust complaint in August against real estate pricing data aggregator RealPage, describing similar practices of proprietary information sharing as those Circana engages in.
The company “contracts with competing landlords who agree to share with RealPage nonpublic, competitively sensitive information about their apartment rental rates and other lease terms to train and run RealPage’s algorithmic pricing software,” the complaint alleged
“This software then generates recommendations, including on apartment rental pricing and other terms, for participating landlords based on their and their rivals’ competitively sensitive information,” it says.
While the Biden administration has been relatively assertive on antitrust issues as the economy went through the post-pandemic inflation, many businesses are anticipating a more relaxed regulatory environment under a second Trump administration.
