Wholesale grocers except $25 million settlement in price-fixing potato cartel case

Back in 2010, the Associated Wholesale Grocers filed a class-action lawsuit, accusing Idaho potato farmers of conspiring to raise the price of potatoes by purposefully limiting their supply. According to the suit, the actions of these farmers raised the price of a 10 pound bags of potatoes from $9 in 2007, to $15 the following year.

The defendants included the United Potato Growers of America, an organization responsible for nearly 75 percent of the U.S. potato market. They denied the grocers' claims, saying that they were properly running a farming cooperative that focused on helping farmers navigate a changing market. They went on to say that their actions were defended by the 1922 Capper-Volstead Act, which provides exemptions fro federal antitrust rules in the case of agricultural cooperatives.

The average American eats approximately 35 pounds of potatoes every year, and the annual potato market in the United States is close to $3.7 billion. This made the case absolutely massive; the legal documents provided by the defendants, for instance, accounted for over 3.6 million pages when all was said and done.

The case is finally coming to a close however, as U.S. District Judge B. Lynn Winmill gave a preliminary settlement approval.

The settlement allows anyone who in the past 10 years purchased fresh potatoes from grocers in Arizona, California, Florida, Iowa, Kansas, Massachusetts, Michigan, Minnesota, Nevada, New York, North Carolina, Tennessee, Vermont and Wisconsin to take part in a $5.5 million pot. Anyone in the U.S. who bought potatoes directly from members of the United Potato Growers of America are eligible for a share of a $19.5 million pot.

Regardless of where you are as a company it's always good idea to get in touch with a qualified business attorney early on. A good lawyer can make sure your rights as a business owner are always protected.

Categorised in: Business Law, Litigation

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