McCain, Cavendish Farms named in U.S. class-actions alleging ‘potato cartel’

The heat has been turned up on two Canadian frozen-potato giants who have been named in separate price-fixing lawsuits south of the border.

McCain Foods Ltd. and Cavendish Farms are among those accused of being part of a “potato cartel,” conspiring with other large processors by sharing pricing data in an effort to raise the price of frozen potatoes in the U.S.

The other companies named in the class-action lawsuits are U.S. companies Lamb Weston Inc. and J.R. Simplot Co., as well as an industry association called the National Potato Promotion Board.

A class-action complaint on behalf of retailers was filed on Nov. 15, while the case on behalf of consumers was filed on Nov. 17. The class actions launched in a U.S. federal court in Illinois have yet to be certified.

The consumer case — brought by plaintiff Alexander Govea who is identified as a buyer of retail frozen potato products — alleges the major processing companies have a “direct line of communication to each other” and regularly share pricing data and other sensitive information.

“The potato cartel moves prices skyward in lockstep — harming all purchasers of potatoes in the process,” the court filing states.

Meanwhile in the retailer case, U.S. supermarket chain Redner’s Markets Inc. alleges that, from 2021 to the present, the potato companies implemented a “series of lockstep price increases that allowed them to realize unprecedented margins.”

The allegations have not been tested in court, but in an emailed statement Wednesday, McCain Foods vehemently denied any wrongdoing.

“McCain Foods strongly disputes any allegation that the company violated antitrust laws, or any other laws, with respect to the sale of frozen potato products,” said Charlie Angelakos, vice-president for global external affairs and sustainability with McCain Foods.

“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.”

Cavendish Farms has not responded to a request for comment.

According to the court filings, the four potato processors named in the lawsuits together control 97 per cent of the frozen potato market in the U.S.

Based in New Brunswick, McCain Foods has 51 frozen food processing plants around the globe, and according to its website, makes one in every four French fries consumed worldwide.

McCain Foods Canada sources its potatoes from farms in Manitoba, Alberta and New Brunswick.

Cavendish Farms is a subsidiary of the New Brunswick-based J.D. Irving Group of Companies. The company says it is the fourth largest processor of frozen potato products in North America.

In Canada, Cavendish Farms sources potatoes from farmers in Prince Edward Island and Alberta and operates potato processing plants in both provinces.

This report by The Canadian Press was first published Nov. 20, 2024.

Amanda Stephenson, The Canadian Press