Idaho frozen french fry manufacturers sued for price fixing, forming potato 'cartel'

BOISE, Idaho — Two leading frozen potato manufacturers based in Idaho face a lawsuit over allegations of price fixing.

Boise agribusiness giant J.R. Simplot and Eagle potato producer Lamb Weston were among four companies sued Friday in U.S. District Court in Illinois for conspiring to artificially raise prices of frozen potato products, including french fries, hash browns and tater tots, according to the lawsuit.

McCain Foods and Cavendish Farms, both headquartered in Canada, are also named in the lawsuit. Together, the four companies control over 97% of the frozen potato product market in the U.S. — a $68-billion-per-year industry, the lawsuit said.

The lawsuit, brought by Redner’s Markets, an employee-owned supermarket chain based in Pennsylvania, on behalf of itself and others, accuses the companies of illegally coordinating an effort to implement lockstep price increases since at least 2021 in violation of the Sherman Act, a federal law that prohibits anticompetitive agreements and conduct that monopolizes or attempts to monopolize a certain market.

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

Redner’s Markets asked that the lawsuit be certified as a class action, with the class being any person or entity that directly purchased frozen potato products in the U.S. from one or more of the companies since Jan. 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. Those costs peaked in mid-2022 and fell steadily after. Still, prices continued to climb and remain uncompetitively high, according to the lawsuit. Frozen potato product prices climbed 47% between July 2022 and July 2024, the lawsuit said.

“When products are interchangeable, the primary way to compete is on the basis of price,” the lawsuit said. “The avoidance of price-based competition is the primary motivation for forming a cartel.”

The lawsuit says the conspiracy resulted in unprecedented margins. The former vice president of international at Lamb Weston allegedly acknowledged in 2023 that Lamb Weston, J.R. Simplot and McCain Foods “have never ever seen margins this high in the history of the potato industry.”

But the matching price increases didn’t go unnoticed.

One restaurant owner remarked in 2022 that it was “amazing how all of the major suppliers for french fries and the like are all raising their prices at the same time and by the same amount,” the lawsuit said.

To conceal the conspiracy, Lamb Weston allegedly told its managers to communicate about competitor pricing and business intelligence by text instead of email to avoid creating a trail that could be discovered in an antitrust investigation. The lawsuit said managers were forbidden to email their competitors’ price announcements to C-suite executives so that the executives could plausibly deny receiving the announcements.

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

Josh Jordan, a spokesperson for J.R. Simplot, declined to comment on specifics, citing the pending litigation.

“We compete fairly and with integrity in all markets where we operate,” Jordan said by email Thursday. “Our focus remains on delivering high-quality and dependable products and services to our valued customers.”

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

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

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