Potato price-fixing lawsuit alleging N.B. giants are part of 'good ol' boys network' goes ahead
Lawsuit alleges McCain, Cavendish and 2 U.S. companies conspired to raise prices
A lawsuit against major producers of frozen potato products, including two industry giants from New Brunswick, can go ahead, a U.S. judge ruled.
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judge → allege → Brunswick
The class action lawsuit, launched two years ago, alleges antitrust violations by several manufacturers of frozen french fries, hash browns, tater tots and other potato products.
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lawsuit → launch → fries
The four companies named in the suit — McCain Foods, Cavendish Farms, Lamb Weston and J.R. Simplot — make up a “good ol’ boys network," controlling the market in the U.S. and sharing information about pricing with each other, the suit alleges.
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suit → name → other
In a decision last month, Judge Jeffrey I. Cummings of the United States District Court for the Northern District of Illinois allowed most of the claims to continue.
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most → allow → claims
Cavendish, which is owned by J.D Irving Ltd., has its head office in Dieppe and McCain has a head office in Florenceville-Bristol.
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McCain → own → Bristol
Both Lamb Weston and J.R. Simplot are based in Idaho.
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Weston → base → Idaho
The lawsuit was filed in 2024 by Redner’s Markets, a Pennsylvania-based grocery chain.
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lawsuit → file → Markets
It alleges that starting in January 2021, the four companies raised prices at “nearly identical rates around similar times” by sharing prices with each other on a program called PotatoTrack.
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companies → allege → program
“Because the clients of PotatoTrack were limited to the four Producer Defendants and the United States Potato Board, the PotatoTrack reports allowed each Producer Defendant to assess critical data from the three other competitors,” the lawsuit said.
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lawsuit → limit → competitors
The defendants put forward a joint motion to dismiss the complaint, but Cummings mostly denied the motion.
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Cummings → put → motion
The lawsuit said the four companies dominate the U.S. market for frozen potato products, controlling 98 per cent of it.
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companies → say → it
The two Canadian companies, McCain and Cavendish, control 30 per cent and seven to eight per cent, respectively.
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companies → control → cent
Any new competitors trying to enter the market would have a hard time even finding suppliers since the four major companies have long-established and exclusive relationships with potato growers, the lawsuit said.
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lawsuit → try → growers
The suit alleges that executives in the four companies develop close relationships through their membership in several potato organizations and their attendance at industry conferences.
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executives → allege → conferences
The companies are also alleged to have knowledge about each other's business practices through co-packing arrangements in which on one manufacturer outsources part of its production to another company.
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part → allege → company
Cummings wrote that the companies didn’t make a good enough argument to have the lawsuit dismissed.
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lawsuit → write → argument
“It is well-settled that the exchange of price information among competitors is indicative of anticompetitive agreement,” Cummings wrote.
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Cummings → settle → agreement
The four companies' control of most of the U.S. market is insufficient to prove a price-fixing agreement, but it makes it “more plausible” that it could happen, he said.
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he → prove → agreement
CBC News reached out to the four companies but did not receive a response from three of them on Thursday.
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News → reach → Thursday
A spokesperson for J.R. Simplot said in an email that the company "is committed to competing fairly and with integrity in all markets where we operate and in compliance with applicable laws."
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we → say → laws
When the lawsuit was first brought in 2024, McCain said in a statement that it strongly disputed the allegations and would vigorously defend itself.
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it → bring → itself
The other three companies did not respond to requests for comment at that time.
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companies → respond → time
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