Hot potato: Redner’s lawsuit accuses companies of creating frozen french fry cartel

Employee-owned regional grocery chain Redner’s Markets is suing the nation’s largest potato companies, alleging that the four dominant processors of frozen potato products colluded to fix prices and gouge consumers. 

The lawsuit, filed Nov. 15 in the Northern District Court of Illinois, claims that the companies Lamb Weston, McCain Foods, J.R. Simplot Co., and Cavendish Farms, which collectively control 97% of the more than $68 billion U.S. frozen potato products market, colluded to fix prices on their products in violation of antitrust law. 

“In 2021 and again in the spring of 2022, while facing increased input costs, defendants changed their pricing methods to collectively impose ‘strong arm’ price hikes with no worry their customers could defect to competitors. Frozen potato product prices climbed 47% from

July 2022 to July 2024,” the lawsuit claimed. 

None of the companies named in the lawsuit could be immediately reached for comment. 

“In contrast to their own sales prices, defendants’ input costs peaked in 2022 and fell steadily after that. Amid that cost input decline, two stock analysts predicted that defendant Lamb Weston’s ‘stepped-up margin expansion’ would not ‘be durable longer term.’ Contrary to that prediction, defendants’ prices continued to climb and remained uncompetitively high,” the lawsuit continued. 

The matching price increases resulted in “unprecedented margins” for the companies, according to the lawsuit. 

The lawsuit adds that a former VP of International at Lamb Weston said in 2023 Lamb Weston, J.R. Simplot, and McCain “have never seen margins this high in the history of the potato industry,” and that the success was driven by the companies having “no incentive to fight that hard for each other’s share” because the competitors were “behaving themselves” to keep margins high.

“And to conceal their conspiracy, upon information and belief, at least Lamb Weston told its managers to communicate about competitor pricing and business intelligence using texting instead of emails to avoid creating emails that could be discovered in the event of an antitrust investigation,” the lawsuit stated. “Although Lamb Weston managers obtained their competitors’ price announcements, they were forbidden to email such announcements to c-suite executives so the latter could more plausibly deny receiving information about the announcements.”

Redner’s Markets, headquartered in Reading, Penn., operates 44 grocery stores and 24 Quick Stop convenience stores throughout Eastern Pennsylvania, Maryland, and Delaware.
The lawsuit comes at a time when political rhetoric has reached a fevered pitch on the topic of gouging, particularly with Vice President Kamala Harris, whose failed presidential bid claimed that supermarket companies were gouging consumers.

Redner's released a statement to Supermarket News on Wednesday afternoon.

“As part of our mission to exceed customer expectations by offering the freshest products and lowest prices, Redner’s Markets is committed to challenging this behavior,” said Eric B. White, director of marketing and communications. “Artificially inflated food prices affect families and communities everywhere, making it harder for consumers to access affordable groceries. This lawsuit is about accountability and ensuring a fair marketplace. By taking action against anticompetitive practices, Redner’s reinforces its mission to uphold fair pricing and stand up as a champion for its customers by working tirelessly to ensure the affordability and quality they deserve.”