UPDATED: AWG files antitrust case against potato groups - The Packer

UPDATED: AWG files antitrust case against potato groups

04/23/2013 05:03:00 PM
Coral Beach

“As a direct and proximate result of defendants’ conduct, plaintiff directly purchased potatoes at prices higher than it would have paid and on terms that are less favorable than would have been available in a competitive market,” according to the lawsuit.

AWG supplies more than 2,000 retailers according to the complaint, and contends the defendants violated the federal Sherman Act (antitrust) and the Kansas Restraint of Trade Act.

In the complaint, AWG states that beginning in 2004, defendants conspired to reduce plantings and supplies of potatoes to increase prices.

“Defendants analogized their potato cartel to the Organization of Petroleum Exporting Countries (OPEC) — the notorious petroleum supply-reduction and price-fixing cartel composed of various foreign nations. Defendants suggested that they should ‘study’ the OPEC model and their organization was referred to as the ‘OPEC of Potatoes,’ ” the AWG complaint states.

The wholesaler contends the defendants also destroyed surplus inventory and disposed of additional potatoes by giving them to food pantries.

After organizing the original United Potato group in Idaho in 2004, the defendants decreased fresh potato plantings by 70,000 acres in 2005, according to the lawsuit. The complaint states that the defendants’ actions by 2005-06 had increased the price of fresh potatoes by 48%.

The complaint quotes the 2011 annual report from United Potato Growers of America as stating the “total shipments of fresh potatoes had fallen from 107.37 million cwt. in 2004-05 to 95.36 million cwt. in 2010-11. Correspondingly, the growers’ average return had more than tripled, rising from $3.11 per cwt. in 2004-05 to $11.42 per cwt. in 2010-11.”

The wholesaler contends the defendants are not protected by the Capper-Volstead Act because it does not apply to processors or others that do not actually produce agricultural products.

“As an initial matter, Capper-Volstead does not protect pre-planting acreage reductions — one of the central agreements at issue in this case,” the complaint also states.

The defendants named in the case are:

  •  United Potato Growers of America Inc.
  •  United Potato Growers of Idaho Inc.
  •  United II Potato Growers of Idaho Inc.
  •  Wada Farms Inc.
  •  Cedar Farms Inc.
  •  Wada Family Farming LLC
  •  Wada Farms Potatoes Inc.
  •  Wada Farms Marketing Group LLC
  •  Pro Fresh LLC
  •  Albert Wada
  •  Blaine Larsen Farms Inc.
  •  Potandon Produce LLC
  •  Michael Cranney
  •  Cornelison Farms Inc.
  •  Snake River Plains Potatoes Inc.
  •  Driscoll Potatoes Inc.
  •  Lance Funk
  •  Rigby Produce Inc.
  •  Pleasant Valley Potato Inc.
  •  KCW FAarms Inc.
  •  Kim Wahlen Farms
  •  Raybould Brothers Farms LLC
  •  R.D. Offutt Co.
  •  Ronald D. Offutt Jr.
  •  Idahoan Foods LLC

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Dave Corbett    
Kansas City  |  April, 24, 2013 at 11:17 AM

AWG management should focus on their consumers and their merchandising strategies rather than trying to bully independent potato farmers.

April, 24, 2013 at 05:58 PM

What a sham! AWG is trying to squeeze the growers who take all the risk in a frivolous lawsuit. Shame on you AWG! Your margin is already much greater than the growers and passed on to the consumer! NO FARMS,NO FOOD!

April, 25, 2013 at 09:12 AM

AWG. Why don't you go get a farm and grow them yourself

April, 25, 2013 at 10:06 AM

AWG is headed in the wrong direction. Their priorities are way out of control.

George Spada    
Portland, OR  |  April, 25, 2013 at 04:18 PM

Why doesn't AWG bare THEIR books to see what percentage of profit they are making as opposed to the potato growers who run the high risk of loss by diseases as well as the vagaries of the market itself? AWG is only talking about one area, not the entire USA production. If Wada and his fellow growers cut acreage to impact the market by 300%, WA and OR alone could pick up the slack with additional acreage and production. There is no OPEC situation here. Give it a rest and send your lawyers someplace else. If potato growers don't make decent money, their children won't become farmers. THEN what would happen to your precious pricing model? AWG, you should stick to marketing and delivering, not production. If you want to lower your costs on anything, go rail against Obamacare!

Burlington, IA  |  April, 25, 2013 at 07:01 PM

Thank you AWG for standing up and making these folks play by the correct set of rules! If you want to grow and sell, then do it correctly.

bama  |  October, 01, 2013 at 01:02 PM

What Obamacare has to do with this,he is the Prez wether u like it or not he helps ppl of all races unlike u necks who only care about ur self.Get a life and grow up.Times have changed.We as a ppl must learn to live together

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