Lawsuit in Idaho federal court alleges potato growers are colluding to drive up prices

A lawsuit filed in a federal court in June alleges that potato grower cooperatives have engaged in "classic cartel behavior" to drive up prices across the country, Kathleen Kreller of the Idaho Statesman reports. Defendants include the United Potato Growers of America, the United Potato Growers of Idaho and other growers in the state. "Each defendant knew that it could not fix prices by itself and the supply could only be restrained by collective action," the complaint said. United Potato Growers spokeswoman Barb Shelley told Kreller the cooperatives aren't breaking the law and are just humble farmers.

The complaint alleges that in September 2004, Albert Wada, of Wada Farms, and Keith Cornelison, another defendant, called a meeting of 23 growers to discuss how to 'curb production' and 'boost prices,'" Kreller writes. The growers at that meeting went on to found the United Potato Growers, which controls 60 percent of the fresh potatoes produced in Idaho and 25 percent of the national market. Lead attorney Joseph Pizzirusso contends the growers violated the Capper-Volstead Act of 1922, which exempts agricultural cooperatives from antitrust regulations under limited circumstances, "by conspiring with non-growers, such as packing warehouses and a dehydrating plant, to reduce the supply and increase the price," Kreller writes.

Shelley countered, "We view [the complaint] as an attack on our potato farmers who work every day to grow potatoes and to provide the country with an adequate supply of potatoes at a fair price." Pizzirusso said his law firm Hausfeld LLP, which announced a preliminary $25 million settlement of antitrust, price-fixing allegations involving the processed egg industry earlier in June, can show more than a dozen ways the growers are violating the Capper-Volstead Act. (Read more)