Overview of the Allegations

Two Canadian frozen potato giants, McCain Foods Ltd. and Cavendish Farms, have been accused of price-fixing in class-action lawsuits filed in a federal court in Illinois. The lawsuits allege the existence of a 'potato cartel' that aimed to manipulate frozen potato prices in the U.S.

Details of the Lawsuits

The class-action complaint was filed on November 15, followed closely by a consumer-focused claim. Other defendants include U.S. firms Lamb Weston Inc. and J.R. Simplot Co., along with the National Potato Promotion Board.

Claims Made

The complaint by Alexander Govea, a buyer of frozen potato products, suggests that these companies maintained open communication for sharing pricing data. Redner's Markets Inc. reported synchronized price hikes leading to record profit margins since 2021.

Company Responses

McCain Foods has denied the allegations and stated their intent to vigorously defend against the lawsuits. Cavendish Farms has not yet commented.

Market Impact

According to court documents, the four processors involved dominate the U.S. frozen potato market, controlling 97% of the share, raising concerns about consumer choice and pricing.

Background of McCain Foods and Cavendish Farms

McCain Foods, based in New Brunswick, operates 51 frozen food processing plants worldwide, contributing significantly to the global supply of French fries. Cavendish Farms sources potatoes from Canadian farmers and operates facilities in Prince Edward Island and Alberta.

Looking Ahead

As the lawsuits progress, the food industry is on high alert, with consumers and retailers watching closely how this may impact potato product pricing and availability.