Revenge may be a dish best served cold, but others would argue it can also be served mashed, battered, and fried.Multiple proposed class action lawsuits filed this week allege that four frozen potato producers—Cavendish Farms, Lamb Weston, McCain Foods, and the J.R. Simplot Company—conspired and shared trade information to coordinate price increases in 2021. In a complaint filed Friday, Pennsylvania grocery chain Redner’s Markets alleges that the four companies illegally fixed prices for tater tots, french fries, and hash browns, gouging consumers and commercial customers. And in a lawsuit filed Sunday, plaintiffs claimed the companies engaged in antitrust practices by using data aggregation services and shared access to sensitive information to artificially fix prices. From 2022 to 2024, prices of frozen potato products increased 47%, one lawsuit said.“Armed with 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 potato cartel moves prices skyward in lockstep—harming all purchasers of potatoes in the process,” plaintiff Alexander Govea said in one complaint.The lawsuits emerge as consumers continue to wring their hands over how to afford weekly groceries, as global prices reach their highest in 18 months, with the UN Food and Agriculture Organization’s food price index rising to 127.4 in October, a 5.5% increase from a year ago. About 75% of all Americans are worried about the price of food and consumer goods, according to September Pew Research Center data.The four companies make up about 97% of a U.S. frozen potato industry worth $68 billion annually, one plaintiff stated. Trade association Potatoes USA said last month that demand for frozen products remains steady, with retail dollar sales for frozen potatoes increasing 14.6% from July 2023 to July 2024. Because the four companies dominate the market, the lawsuits argue, there’s little room for smaller competitors to break in and grow.A McCain Foods spokesperson told Fortune it “strongly disputes” the allegations outlined in the lawsuit. “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,” the statement said. A Lamb Weston spokesperson told Fortune, “We believe the claims are without merit and intend to vigorously defend our position.”The two other defendants did not respond to Fortune’s requests for comment.How Big Potato allegedly mashed competitionThe lawsuits allege the potato industry is set up to enable conspiracy through high barriers to enter the market and possessiveness over suppliers. Companies like Lamb Weston, which can crank out 250 million pounds of frozen potato products annually at just one facility, require immense infrastructure that make it difficult for up-and-comers to produce on a meaningful scale, argues Redner’s Markets. Cavendish Farms spent $430 million to open one processing plant. According to the lawsuit, the producers of frozen fries and tots claim close relationships with farmers and insist that suppliers not take on new clients, particularly as these large companies vie for long-term contracts. Potatoes are one of the most vulnerable crops to the impacts of climate change, according to the National Institutes of Health, and Lamb Weston argued there are few untapped resources available to farm the crop.But the consequences of the alleged price-fixing could be steep for the spud giants. Last month, McDonald’s sued beef producers, claiming four major meat packers inflated prices by decreasing supply and arguing the beef industry had become a monopoly. Several poultry heavyweights, including Tyson Foods and Sanderson Farms, have faced antitrust litigations and lawsuits dating back as early as 2016 for similar claims.Tyson previously coughed up $221.5 million to settle with plaintiffs.How many degrees of separation are you from the globe's most powerful business leaders? Explore who made our brand-new list of the 100 Most Powerful People in Business. Plus, learn about the metrics we used to make it.
