US’ 4 largest frozen spud producers accused of forming ‘potato cartel’

[JACK AYLMER]

JUST AHEAD OF THE THANKSGIVING HOLIDAY, THE NATION’S FOUR LEADING PRODUCERS OF FROZEN SPUDS ARE IN HOT WATER. 

A HANDFUL OF FEDERAL LAWSUITS FILED THIS WEEK ACCUSE THEM OF FORMING A SO-CALLED ‘POTATO CARTEL’.

COURT DOCUMENTS ALLEGE THE POTATO PRODUCERS COORDINATED PRICES THROUGH A THIRD-PARTY DATA COMPANY.

THE LAWSUITS CLAIM CAVENDISH FARMS, MCCAIN FOODS, J-R SIMPLOT, LAMB WESTON AND THE NATIONAL POTATO PROMOTION BOARD CONSPIRED TO FIX AND MANIPULATE PRICES FOR FROZEN POTATOES IN THE U-S.

PROSECUTORS SAY THE COMPANIES FORMED A CARTEL BY HAVING EQUAL “ACCESS TO EACH OTHER’S DATA ON PRICING AND OTHER SENSITIVE INFORMATION, AS WELL AS A DIRECT LINE OF COMMUNICATION TO EACH OTHER.”

ADDING, THIS ALLOWED THE COMPANIES TO RAISE PRICES IN A CONCERTED ARRANGEMENT… VIOLATING U-S ANTITRUST LAWS.

THE LAWSUITS ASSERT THE PRICE COORDINATION WAS MADE POSSIBLE THROUGH A MARKET DATA AGGREGATOR.
THE RESEARCH FIRM CIRCANA IS NAMED IN ONE OF THE LAWSUITS.

THESE COMPANIES CONTROL MORE THAN 95 PERCENT OF THE FROZEN POTATO MARKET AND ATTORNEYS SAY THEY USED THEIR MARKET DOMINANCE TO INCREASE PRICES BY NEARLY 50 PERCENT IN A TWO-YEAR SPAN. 

THE LAWSUITS SEEK UNDISCLOSED MONETARY DAMAGES AND A COURT ORDER ENDING THE ALLEGED PRICE FIXING.

A MCCAIN SPOKESPERSON DENIED ALLEGATIONS THE COMPANY BROKE ANTITRUST LAWS.

VOWING TO FIGHT ALL LAWSUITS LEVELED AGAINST THE COMPANY.

THE OTHER COMPANIES HAVE YET TO RESPOND THE LAWSUITS AS OF THE PUBLISHING OF THIS REPORT.

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FOR STRAIGHT ARROW NEWS– I’M JACK AYLMER.