Potato Price Fixing Class Action Filed

A class action lawsuit targeting the largest potato growers in Idaho and the United States claims the spud producers conspired with other entities to restrict the supply of potatoes and fix prices in order to increase their profits. The lawsuit names Idahoan Foods, United Potato Growers of Idaho, United Potato Growers of America, Dole Food Company, and dozens of other “co-conspirators” in the antitrust class action.

According to the class action lawsuit, when the price of potatoes began to decline in the early 2000s, Idaho potato growers grew concerned about their profits. In response, the growers formalized a joint agreement to reduce the potato supply and fix, raise, maintain and/or stabilize prices.  

The defendants in the antitrust class action include individual growers, national produce companies, marketing and shipping agencies, and several potato cooperatives. The lawsuit alleges the cooperatives came together in 2004 under the guise of marketing and selling their potato products collectively, but their sole purpose was really to conspire together to reduce potato output and fix prices.

“Each defendant knew that it could not fix prices by itself and that the supply could only be restrained by collective action. Thus, defendants entered into an admitted and overarching agreement to manage the supply of potatoes in the United States for the purpose of elevating the sales prices of fresh and process potatoes,” the lawsuit said. This was accomplished, the lawsuit says, by taking several coordinated actions, including: agreeing to limit potato planting acreages, agreeing to pay farmers to destroy existing stocks or not to grow additional potatoes, and agreeing to reduce the overall number of potatoes available for sale.

The lawsuit claims the main cooperative, United Fresh Potato Growers of Idaho, “openly discussed how [they] wanted to ‘unite’ potato growers, ‘decrease competition,’ and ‘rationalize the industry’ by collectively curtailing production.” The lawsuit also quotes the cooperative’s website: “In 2004, after evaluating the economic realities of the current business climate, a group of potato growers decided that long-term production and supply management are critically needed to provide stability and a reasonable return for growers.”

The lawsuit alleges that after the 2004 cooperative was created, the producer price index for fresh potatoes increased 94% from the previous year.

The class action lawsuit is brought on behalf of all U.S. consumers who, at any time from June 18, 2006 through the present, indirectly purchased fresh or processed potatoes from the defendants or their co-conspirators. It is seeking class certification and a judgment against the defendants for three times the amount of damages sustained by class members.

A copy of the Idaho Potato Antitrust Class Action Lawsuit can be read here.