McCain Foods and Lamb Weston Holdings are among a group of frozen-potato product suppliers facing US lawsuits linked to claims of price-fixing.
One of the lawsuits was filed by the grocery chain Redner’s Markets in the US District Court in Illinois last Friday (15 November) implicating McCain, Lamb Weston, JR Simplot and Cavendish Farms.
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The four frozen-food companies, along with Potatoes USA, also face the same accusations in a separate and second lawsuit brought by plaintiff Alexander Govea and “others similarly situated” in the same court on Sunday.
“This is a price-fixing case against the four dominant processors of frozen French fries, hash browns, tater tots and other frozen potato products sold in the United States,” the court document read in relation to Redner’s Markets.
“Together, they control 97% or more of the $68 billion per year frozen potato products market.”
Redner’s Markets, the supermarket chain based in Reading, Pennsylvania, claims the alleged price-fixing dates back to “at least” the early part of 2021 and has “continued unabated to the present”.
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By GlobalDataIt suggested the four defendants “conspired” to fix prices “above competitive levels”, a process that inflated their margins.
As the plaintiff representing “others similarly situated” in the class action lawsuit, Redner’s Markets is seeking damages and costs against the four companies’ alleged antitrust practises.
“Defendants’ frozen-potato products prices tell a remarkable story because they would not have occurred in a competitive market that was free from defendants’ concerted action,” the court document continued.
“Defendants’ frozen-potato product prices increased in 2021 and then skyrocketed in 2022, and they continued to remain high through at least the end of July 2024, resulting in unparalleled margins for defendants.”
Just Food has asked McCain, Lamb Weston, JR Simplot and Cavendish for comment outside of US business hours today (19 November).
The court document pertaining to the plaintiff Govea also accused the said four companies of price-fixing, as well as the National Potato Promotion Board (NPPB), doing business as Potatoes USA.
It was described as “an indirect purchaser plaintiff antitrust class action” relating to the five businesses for “entering into an unlawful conspiracy to raise, stabilise, fix and/or otherwise manipulate the prices in the market for the frozen potatoes in the United States”.
According to the court filing: “The way that the defendants have been able to artificially raise prices in the relevant market is by using conduits to price-fixing, such as potato price data aggregation services (namely, Circana, LLC’s PotatoTrac) and collective action through trade associations like NPPB.
“Armed with the same access to each other’s data on pricing and other sensitive information, as well as with a direct line of communication to each other, the potato cartel moves prices skyward in lockstep - harming all purchasers of potatoes in the process.”
That case also relates to early 2021 through to the “present day”.
Just Food has also asked Potatoes USA for comment.
McCain Foods and JR Simplot are both privately owned and do not publicly reveal financial results to back up the inflated margin claims. Similarly, Cavendish Farms is a subsidiary of another private business, JD Irving Group.
Meanwhile, New York-listed Lamb Weston has come under the radar of activist investor Jana Partners following a series of poor financial results.
The French fries maker’s latest results, for the first quarter of its 2025 fiscal year, showed volumes in the US fell 4%, more than the group decline of 3%. No record was made for margins, however.
Fast-food giant McDonald’s is Lamb Weston’s largest customer, accounting for 14% of its $6.5bn fiscal 2024 sales revenues. But the business has been experiencing “softness” in both foodservice and retail, resulting in cuts to its sales and profit forecasts.
