Grocers sue alleged potato cartel

Suit seeks damages for price fixing, satellite spying

6/14/2013

BOISE — A U.S. wholesale grocer says America’s potato farmers have run an illegal price-fixing cartel for a decade, driving up prices while spying on farmers with satellites and aircraft fly-overs to enforce strict limits on how many tubers they can grow.

The lawsuit by the Kansas-based Associated Wholesale Grocers’ against the United Potato Growers of America and two dozen others was shifted this week to U.S. District Court in Idaho, which is America’s top potato-producing state with 30 percent of the crop.

The grocery group is a cooperative that supplies more than 2,000 stores, in 24 states, that include IGA, Thriftway, and Price Chopper. The association contends the potato growers banded together in 2004 to illegally inflate prices in a scheme akin to the petroleum-producing OPEC cartel, reducing acreage planted and destroying potatoes, all to restrict what was available for sale.

“UPGA utilized predatory conduct and coercive conduct in ensuring compliance with the price-fixing scheme,” the legal complaint says. It charges 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. They are focusing on growers of fresh potato varieties found in big bags in supermarket produce aisles as well as potatoes processed into golden fries, tater-tots, and other products and sold in freezer sections of stores.

United Potato Growers of America has members in Alaska, California, Colorado, Florida, Idaho, Kansas, Minnesota, Montana, Nebraska, North Dakota, Oklahoma, Oregon, Texas, Washington, and Wisconsin. They represent three-quarters of U.S. fresh potato production.

Dell Raybould, an owner of Raybould Farms and a Republican state representative, is a member of the co-op and has been named in the lawsuit. He insisted Thursday that those who set up the group in 2004 followed anti-trust laws.

The United Potato Growers of America’s Salt Lake City-based attorney, Randon Wilson, contends his group is shielded by the Capper-Volstead Act, a 1922 federal law that under some circumstances exempts agricultural cooperatives from antitrust regulations.