Grocery Group Accusing Potato Farmers Of Pumping Up Spud Prices

The next time you’re biting into a perfectly crispy on the outside, steaming hot on the inside french fry, you should know there’s currently a battle raging between potato farmers and the grocers who sell those spuds in all their various forms. There are even claims of espionage, carried out with satellites and aircraft flyovers. Exciting stuff!

Why should you care if grocers are sending out fleets of tiny robots to spy on potato farmers? Because as the Associated Press reports, this war could be hitting consumers where we hurt the hardest — right in the money holders/wallets.

The Associated Wholesale Grocers group is suing the United Potato Growers of America, along with two dozen other defendants, and as is only fitting, it’s all going down in a U.S. District Court in Idaho. In case you’ve grown up with your potato blinder son, that state produces 30% of the nation’s supply of spuds.

The wholesalers say farmers are driving up prices, while the farmers claim they’re being spied on to enforce strict limits on how many of the spuds they can grow.

So how much more are you paying for fries, tater tots or mashed potatoes, if this price-fixing is actually happening? No one’s really sure, but if it’s true, it’d likely be a big deal. After all, we Americans love our potatoes any way we can get them, and buy billions of dollars worth of the tasty tubers every year.

The plaintiffs claim that potato farmers have been in collusion for a decade to illegally inflate prices, an alleged scheme that’s being compared to the OPEC cartel petroleum scandal. The wholesalers group says the farmers have been reducing how many acres they’ve planted and even destroying potatoes to keep supply down while demand stays up.

“UPGA utilized predatory conduct and coercive conduct in ensuring compliance with the price-fixing scheme,” according to the lawsuit, which alleges tactics including use of “satellite imagery, fly-overs, GPS systems, and other methods to enforce its agreement to reduce potato supply.”

Grocers want triple damages, worth millions and are so far focused on fresh potato varieties, the kinds you buy in bags, as well as processed potatoes used in frozen products

An attorney for the UPGA says his group is protected by a 1922 federal law  — the Capper-Volstead Act — that was supposed to provide limited exemption from antitrust rules for agricultural cooperatives, while still aiming to protect consumers from unduly high prices that could accompany a monopoly.

“Right from the beginning, we did everything right, to qualify for Capper-Volstead,” the attorney says. “We know what you have to do to qualify for that limited exemption and we followed all those rules.”

That being said, the plaintiffs paint a picture of secret meetings between big Idaho growers, where members of the agricultural royalty hatched plans to fix prices.

 

“None of the defendants … is entitled to the limited protections found in the Capper-Volstead Act for their efforts to restrict potato supply and fix prices,” wrote the grocers’ lawyer in Kansas City.

Grocers allege potato group pumped up spud prices [Associated Press]