A battle between grocers and potato growers has been silently hitting shoppers' pocketbooks, according to a wholesaler accusing America's spud farmers of driving up prices while spying on farmers with satellites and aircraft flyovers to enforce strict limits on how many tubers they can grow.
Associated Wholesale Grocers' lawsuit against United Potato Growers of America and two dozen other defendants was shifted this week to U.S. District Court in Idaho, America's top potato-producing state with 30 percent of the nation's supply.
It's unclear how much the alleged price-fixing has bumped up the cost of frozen french fries or a steaming spud served with a steak, but the case isn't small potatoes: They're America's most popular vegetable, worth billions in sales each year, and their journey from the field to the table is complex. Farmers trying to make a profit dependent on weather, water and fuel costs are pitted against grocers who worry they're getting gouged.
And while the U.S. Department of Justice hasn't joined this case, its lawyers have been examining how large, modern agricultural cooperatives like the United Potato Growers are employing nearly century-old antitrust exemptions to strengthen their hands.
In this lawsuit, the Kansas-based grocers association, a cooperative supplying more than 2,000 stores including IGA, Thriftway and Price Chopper in 24 states, contends potato growers have banded together for a decade to illegally inflate prices in a scheme akin to the petroleum-producing OPEC cartel, reducing planting acreages and destroying potatoes to restrict what is available for sale.
"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."
The grocers are asking for triple damages, likely in the millions, and are focusing on growers of fresh potato varieties found in big bags, as well as potatoes processed into crinkle-cut fries, Tater Tots and other products and sold in freezer sections of the group's stores.
United Potato Growers of America has organized growers in 15 states—it has members in Alaska, California, Colorado, Florida, Idaho, Kansas, Minnesota, Montana, Nebraska, North Dakota, Oklahoma, Oregon, Texas, Washington and Wisconsin, representing three-quarters of the nation's fresh potato production.