Idaho frozen french fry makers sued each other over price fixing, forming a potato ‘cartel’

Two leading Idaho-based frozen potato producers are facing a lawsuit over alleged price-fixing.

Boise agricultural company JR Simplot and Eagle potato producer Lamb Weston were among four companies sued Friday in U.S. District Court in Illinois for conspiring to artificially inflate the prices of frozen potato products, including french fries, hash browns and tater tots were, the lawsuit says.

McCain Foods and Cavendish Farms, both headquartered in Canada, are also named in the lawsuit. Together, the four companies control more than 97% of the U.S. frozen potato products market — a $68 billion annual industry, the lawsuit says.

The lawsuit, filed by Speaker’s Markets, an employee-owned supermarket chain based in Pennsylvania, on behalf of itself and others, accuses the companies of unlawfully coordinating efforts to enforce incremental price increases in violation of the Sherman Act since at least 2021, a Federal law that prohibits anticompetitive agreements and conduct that monopolize or attempt to monopolize a particular market.

Lamb Weston denies the lawsuit’s allegations and Simplot says it competes fairly with competitors.

Speaker’s Markets filed a motion to certify the lawsuit as a class action, with the class action being any person or entity that purchased direct frozen potato products in the United States from one or more of the companies since January 1, 2021.

The lawsuit says the companies collectively changed their pricing methods in 2021 and again in 2022 in the face of rising input costs. These costs peaked in mid-2022 and steadily declined thereafter. Nevertheless, prices continued to rise and remained uncompetitively high, the lawsuit states. Prices for frozen potato products increased 47% between July 2022 and July 2024, the lawsuit says.

“When products are interchangeable, competition occurs primarily on price,” the lawsuit says. “Avoiding price competition is the primary motivation for forming a cartel.”

The lawsuit says the conspiracy resulted in unprecedented margins. Lamb Weston’s former vice president of international affairs reportedly admitted in 2023 that Lamb Weston, JR Simplot and McCain Foods “have never seen such high margins in the history of the potato industry.”

But the corresponding price increases did not go unnoticed.

A restaurant owner remarked in 2022 that it was “amazing how all the major french fries etc. providers increase their prices at the same time and by the same amount,” the lawsuit says.

To conceal the conspiracy, Lamb Weston allegedly asked his managers to communicate about competitive pricing and business intelligence via text message rather than email to avoid creating a trail that could be uncovered in an antitrust investigation. The lawsuit said that managers were prohibited from emailing their competitors’ pricing announcements to senior executives so that the executives could credibly refuse to receive the announcements.

“We believe the claims are without merit and intend to defend our position vigorously,” a spokesman for Lamb Weston said in an email Thursday.

Josh Jordan, a spokesman for JR Simplot, declined to comment on details, citing pending litigation.

“We compete fairly and with integrity in all markets in which we operate,” Jordan said via email Thursday. “Our focus remains on providing high quality and reliable products and services to our valued customers.”

Attempts to reach McCain Foods and Cavendish Farms for comment were not immediately successful.

The lawsuit seeks a jury trial, an injunction, attorneys’ fees and treble damages, a type of punitive damages for violations of federal antitrust law that allows the court to award a plaintiff three times the actual damages.

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